I just put £3k in my SIPP. Here’s where I’m going to invest it

Edward Sheldon is investing his SIPP in both growth funds and individual stocks in an effort to build up wealth and retire early.

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Every month, I make a contribution to my SIPP (Self-Invested Personal Pension). With tax relief on contributions, and all investment gains and income free from tax, I see a SIPP as a great way to build wealth for retirement.

This month, I put £3k into my account. Here’s a look at where I’m going to invest the money.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Topping up a core holding

The first thing I’m going to do is top up my holding in Fundsmith Equity.

This is a global equity fund that invests in high-quality businesses (Microsoft, Novo Nordisk, and LVMH are some of its top holdings).

I’ve been an investor here for many years now, and the long-term returns have been excellent. Over one and five years, for example, it has returned about 10% and 55% respectively.

Of course, it doesn’t perform well all the time. No equity fund does. But I’ve been very impressed with the long-term performance and I see it as a good core holding.

Increasing my exposure to this sector

I’m also going to add to my holding in the Schroder Global Healthcare fund.

This is a relatively new holding in my SIPP. And right now, it’s a small one, but I’m keen to build up my position.

As a long-term investor, healthcare is a sector I’m really bullish on as it should benefit from the world’s ageing population.

But picking the right healthcare stocks can be a little challenging. Pharma companies, for example, can be a bit hit or miss depending on the success of their drugs.

I see this fund as a good way to get broad exposure to the industry and spread my capital over dozens of leading healthcare companies.

Top holdings in the fund at present include the likes of Eli Lilly (which has been on fire recently due to interest in its weight-loss drug), AstraZeneca, and pet health firm Zoetis.

Buying more stocks

Finally, I’m looking at topping up some of my individual stock holdings.

Now I haven’t made a final decision here, but some companies I’m thinking about investing more in include:

  • Diageo Johnnie Walker-owner Diageo has seen its share price tank over the last year and I reckon it’s a great time to be buying. Right now, the stock has a very reasonable valuation and offers a yield of 2.6%
  • Alphabet (Google) – Alphabet shares have had a good run in 2023 but they still offer value, in my view. Currently, the forward-looking P/E ratio is about 20, which I think is a steal
  • Uber – Uber has recently moved into digital advertising and this is boosting its revenues and profits. And the stock could be added to the S&P 500 index in the near future – this is likely to push its share price up
  • London Stock Exchange Group – This company is doing great things with data and technology (including artificial intelligence) right now. But this doesn’t seem to be reflected in its valuation. I see a lot of appeal at current prices

I think all of these companies could help me build wealth in my SIPP over the long run. I just need to work out which one to buy more of first.

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.

Ed Sheldon has positions in Alphabet, Diageo Plc, London Stock Exchange Group Plc, Microsoft, Uber Technologies, Fundsmith Equity, and Schroder Global Healthcare. The Motley Fool UK has recommended Alphabet, Diageo Plc, Microsoft, and Uber Technologies. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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.

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