These are the top funds owned by SIPP investors in their 50s and Neil Woodford doesn’t make the list

Ever wondered how investors in their 50s place their money? Here are five popular funds among SIPP investors getting closer to retirement age.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today, I’m taking a closer look at the top five funds owned by Hargreaves Lansdown self-invested personal pension (SIPP) investors in their 50s. Here are the most popular funds in alphabetical order, along with one, three and five-year performance figures.

Baillie Gifford American

As its name suggests, this fund invests in a range of companies that are listed in, or conduct a significant proportion of their business in, the US. Its main objective is to provide capital growth. Top holdings currently include Amazon, Netflix and Tesla while Facebook and Google are also top-10 holdings.

Returns:
1-year: 46%
3-year: 132%
5-year: 187%
Fees: 0.52% per year

Fundsmith Equity

Run by well-known portfolio manager Terry Smith, this is a popular fund that invests globally. It currently has a 60% country weighting to the US and an 18% weighting to UK stocks and top holdings include Paypal, Amadeus and Microsoft.

Returns:
1-year: 19%
3-year: 92%
5-year: 157%
Fees: 0.97% per year

Lindsell Train UK Equity

With a focus on UK stocks, this fund is run by highly-regarded portfolio manager Nick Train and his co-portfolio manager Michael Lindsell. The portfolio managers keep the portfolio concentrated and look for high-quality companies that are leaders in their industries. Top holdings currently include Diageo, Unilever and RELX.

Returns:
1-year: 15%
3-year: 52%
5-year: 84%
Fees: 0.7% per year

Lindsell Train Global Equity

Train and Lindsell’s popular global equity fund also makes the top five list. This fund is also highly concentrated, only holding around 30 stocks, yet invests all around the world. It currently has a 35% weighting to the US, with 28% and 21% of the fund allocated to the UK and Japan respectively. Top holdings are quite similar to the UK fund and include Unilever, Diageo and Heineken.

Returns:
1-year: 25%
3-year: 84%
5-year: 153%
Fees: 0.54% per year

Standard Life Global Smaller Companies

Lastly, we have Standard Life’s Global Smaller Companies fund, which aims to provide long-term growth by investing in a portfolio of smaller companies from around the world and is designed for investors who are comfortable with a higher level of risk. Top holdings here include GrubHub, Fevertree Drinks and Aspen Technology with nearly 50% of the fund currently allocated to US stocks.

Returns:
1-year: 24%
3-year: 96%
5-year: 127%
Fees: 0.79% per year

Takeaways

There are several interesting takeaways from this list of funds. First, UK investors appear to have a preference for international stocks at present, with only one UK-focused fund among the top five. Finance textbooks will tell you that the majority of investors have a ‘home bias’ yet this clearly isn’t the case right now for British investors, which is not surprising when you consider Brexit uncertainty. Could UK stocks be a good contrarian play though? 

Second, given that all five of the funds above are growth funds, it appears that investors in their 50s still have quite a high tolerance for risk. Again, this goes against conventional wisdom as we’re often told that investors should reduce their risk as they near retirement. 

Third, no Neil Woodford funds make the list. It looks like investors have lost patience with the portfolio manager after several years of poor performance.

Fourth, looking at the performance figures above, it appears that many investors in their 50s have done very well over the last few years. These funds are a good example of the rewards that are on offer from the stock market if you’re willing to accept a bit of risk. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon owns shares in Unilever and Diageo. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Abstract bull climbing indicators on stock chart
Investing Articles

Something’s changed in a good way for Reckitt in Q1, and the share price may be about to take off

With the Reckitt share price near 4,475p, is this a no-brainer stock? This long-time Fool takes a closer look at…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

This new boost in assets might just get the abrdn share price moving again

The abrdn share price has lost half its value in the past five years. But with investor confidence returning, are…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

As revenues rise 8%, is the Croda International share price set to bounce back?

The latest update from Croda International indicates that sales are starting to recover from the end of 2023, so is…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Q1 results boost the Bunzl share price: investors should consider the stock for stability

As the Bunzl share price edges higher, our writer considers whether this so-called boring FTSE 100 stock looks like a…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

The top 5 investment trusts to buy in a resurgent UK stock market?

These were the five most popular investment trusts at Hargreaves Lansdown in April. And they're not the ones I'd have…

Read more »

woman sitting in wheelchair at the table and looking at computer monitor while talking on mobile phone and drinking coffee at home
Investing Articles

The smartest dividend stocks to consider buying with £500 right now

In the past few years, the UK stock market’s been a great place to find dividend stocks paying top yields.…

Read more »

2024 year number handwritten on a sandy beach at sunrise
Investing Articles

Why this FTSE 100 company is the first I’m buying for my 24/25 Stocks and Shares ISA

As a new Stocks and Shares ISA year gets underway, it’s time to start searching for my next additions. Barclays…

Read more »

Investing Articles

How much passive income would I make from 945 National Grid shares?

National Grid shares pay a healthy dividend that, over time, can produce a sizeable passive income if the dividends are…

Read more »