When navigating the realm of retirement planning, it makes sense to look for the best-performing SIPP investments to increase your chances of enjoying a stable and prosperous future.

By 2023, an estimated £205 billion was held in SIPPs by 1,7 million UK investors¹—a number almost twice the size of the population of Liverpool² all channelling their retirement hopes into a vast, diverse investment landscape. 

But the million-pound question is, within this ocean of opportunity, which islands of performance truly shine? Which is the best SIPP?

Headlines touting ‘best-performing funds’ may beckon, but what works for one investor might leave another adrift, and finding your own strategy requires understanding the currents of risk, diversification, and personal goals.

In this article, the experts at EveryInvestor aim to demystify the SIPP investment process, offering insights into selecting investments, understanding associated risks, and recognising the impact of fees and market dynamics on your pension’s growth.

All our content undergoes strict content and compliance checks before publication so we can be sure to bring you only the most relevant and up-to-date information.

What Is a SIPP?

A Self-Invested Personal Pension (SIPP) is a UK-based personal pension scheme that grants individuals enhanced control and flexibility over their retirement savings.

It serves as a platform for selecting and managing a broad array of investment options, including stocks, bonds, and real estate, within their pension portfolio.

SIPPs are designed for a hands-on investment strategy, allowing individuals to customize their retirement savings to align with their financial goals and risk tolerance.

What Types of Investment Are Commonly Held in SIPPs?

The types of investment commonly held in SIPPs (Self-Invested Personal Pensions) are quite diverse, offering a range of choices to cater to different investment strategies and risk appetites. 

These typically include:

• Shares: Investors may choose to hold individual company shares, either listed on the UK stock exchanges such as the London Stock Exchange or on overseas markets.
• Funds: These can include unit trusts, investment trusts, and open-ended investment companies (OEICs), allowing investors to pool their money with others to invest in a diversified portfolio managed by professional fund managers.
• Bonds: This category covers government securities like Gilts (UK government bonds) and corporate bonds, providing a fixed income over a certain period.
• Commercial Property: SIPPs can invest in commercial properties, such as offices, shops, or industrial units. This does not typically include residential property, but there are certain exceptions.
• Cash: Holding cash within a SIPP can be a strategy for managing risk or preparing to invest in other assets. The interest rates for cash held in SIPPs may vary.
• Exchange-Traded Funds (ETFs): These investment funds are traded on stock exchanges much like shares and typically aim to track the performance of a specific index.
• Direct Investment in Commercial Property: Some SIPPs allow direct investment in commercial properties, which can include office buildings, retail space, or industrial properties.

Remember that the value of investments can go down as well as up, and you may get back less than you invested. 

In addition

Your choice of investments should align with your investment goals, time horizon, and risk tolerance. 

Tax rules and the availability of certain investments within a SIPP can change, and their effects on individuals will depend on personal circumstances.

What Are The Best-Performing SIPP Investments?

When it comes to the best-performing SIPP investments, there are several options to consider.

One of the top choices is investing in diversified portfolios, such as index funds or exchange-traded funds (ETFs), which offer a broad exposure to various asset classes and have a track record of delivering solid returns over the long term.

Another option is investing in individual stocks, particularly those of companies with strong financials and growth potential.

Additionally, alternative investments like real estate investment trusts (REITs) or peer-to-peer lending platforms can provide attractive returns, although they typically come with higher risk levels.

It’s important to note that the best-performing SIPP investments will vary depending on individual risk tolerance, investment goals, and time horizon.

However, a combination of diversified portfolios, solid individual stocks, and alternative investments can offer the potential for strong returns within a SIPP.

It’s crucial to conduct thorough research, consider professional advice, and regularly review and adjust your investments to ensure they align with your financial objectives.

By diversifying your SIPP investments and staying informed about market trends, you can optimize your chances of achieving satisfactory returns and securing a comfortable retirement.

What Are the Best-Performing SIPP Funds in the UK?

The best-performing SIPP funds in the UK often vary depending on the time frame considered and an investor’s specific investment goals. 

However, some funds consistently show strong performance based on their management, asset allocation strategies, and the sectors they invest in. 

Very important

Past performance is not indicative of future results, and individual investors should conduct thorough research or consult a financial advisor to align their choices with their personal circumstances and risk tolerance.

Typically, well-performing SIPP funds might include:

• Equity Funds: These funds invest in stocks and shares in the UK, US, Europe, or emerging markets. They might also target specific sectors like technology or healthcare.
• Fixed Income Funds: Funds investing in bonds and other fixed-income securities can provide regular income and are generally considered lower risk compared to equity funds.
• Property Funds: These funds invest in commercial real estate and can offer a balance between income and capital growth.
• Specialist Funds: Including funds focusing on specific themes or strategies, such as sustainable investing or funds that use complex strategies to hedge risk or maximise returns.

It is important to consider a SIPP fund’s return, risk, consistency, and comparison to its benchmarks and peer group when assessing its performance.

Another thing

Investors should also be aware of the fees associated with different funds, as high fees can significantly erode investment returns over time. 

Review a fund’s performance history, management team, investment strategy, and fee structure before investing, but remember that past performance does not guarantee future returns.

Remember

Because of the changing nature of markets and the economic environment, the list of top-performing funds can change frequently. 

Regularly reviewing and, if necessary, rebalancing your portfolio is an essential part of maintaining a healthy investment strategy within a SIPP.

A small selection of funds to keep an eye on:

• Fundsmith Equity Fund I USD Acc³
• WS Evenlode Global Income Fund F Income GBP⁴
• LUX IM Fidelity Global Technology Opportunities Fund HX⁵
• VT AJ Bell Adventurous Fund Class I Accumulation⁶
• HSBC FTSE All-World Index Fund Income S⁷
• Fidelity MSCI World Index Fund PLN P Acc⁸

Disclaimer

The funds included here are not intended to be taken as investment advice and simply represent an example of the types of fund SIPP investors may be interested in following.

What Are the Best-Performing SIPP Trusts in the UK?

The best-performing SIPP trusts in the UK often stand out owing to their robust management, strategic asset allocation, and the performance of the underlying investments they hold. 

Identifying the ‘best-performing’ can be subjective and heavily depends on individual investment goals, risk tolerance, and the time period over which performance is measured. 

However, some SIPP trusts have gained recognition for their consistent performance, diversification strategies, and effective management.

Very important

While some trusts may excel in certain market conditions or over specific time frames, their past performance is not a reliable indicator of future results. 

Investors should consider the following when evaluating SIPP trusts:

• Diversification: The best-performing SIPP trusts often have a diversified portfolio that can include equities, bonds, property, and possibly commodities or private equity. Diversification can help manage risk by spreading investments across different asset types and markets.
• Management Team: Trusts managed by teams with a strong track record in making insightful investment decisions and adapting to changing market conditions may perform better.
• Investment Strategy: The trust’s investment strategy should align with the investor’s financial goals and risk tolerance. Some trusts might focus on capital growth, while others might prioritise income or stability.
• Costs and Charges: The fees associated with managing the trust can affect the net return on investment. It is very important to understand all costs involved, including management fees, transaction fees, and any performance-related fees.
• Performance History: While past performance is not indicative of future results, the historical performance of a trust can provide insights into how it has navigated different market conditions.

Due to the fluctuating nature of the financial markets and the varying performance of different asset classes over time, you should regularly review and, if necessary, adjust your SIPP trust investments. 

A financial advisor can provide personalised advice and help you make informed decisions based on the latest market trends and your individual financial circumstances.

A small selection of trusts to keep an eye on:

• CATCo Reinsurance Opportunities Fund⁹
• 3i Group plc¹⁰
• Oakley Capital Investments Limited¹¹
• Doric Nimrod Air Two Ltd¹²
• DP Aircraft I Limited¹³

Disclaimer

The trusts included here are not intended to be taken as investment advice and simply represent an example of the types of trust SIPP investors may be interested in following.

What Are the Best-Performing SIPP ETFs in the UK?

The best-performing SIPP ETFs (Exchange-Traded Funds) in the UK tend to be those that have not only demonstrated strong returns but have also managed risk effectively over a certain period. 

However, it is crucial to remember that past performance is not indicative of future results, and the suitability of an ETF depends on an individual’s investment goals, risk tolerance, and investment horizon. 

When assessing the best-performing SIPP ETFs, investors often consider:

• Market Exposure: ETFs can expose investors to domestic and international stocks, sectors, bonds, and commodities. The performance of an ETF will depend on the underlying assets or index it tracks.
• Cost Efficiency: ETFs are known for their low expense ratios compared to actively managed funds, but you should consider other costs, such as bid-ask spreads and brokerage fees, when buying and selling ETF shares.
• Liquidity: Generally, ETFs are highly liquid, allowing investors to buy and sell shares easily. However, liquidity can vary between ETFs, especially those tracking niche markets or specific sectors.
• Dividend Yield: Some investors might prefer ETFs with higher dividend yields, especially if they are seeking income from their investments.
• Risk Management: Understanding the risk profile of an ETF is crucial. This includes assessing the volatility of the underlying assets and how the ETF is structured and managed.

Because of the dynamic nature of financial markets, the list of top-performing ETFs can change over time. 

Therefore, staying informed about market trends and seeking advice from financial professionals could be beneficial.

A small selection of ETFs to keep an eye on:

• WisdomTree Coffee 2x Daily Leveraged¹⁴
• VanEck Semiconductor ETF¹⁵
• iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc)¹⁶

Disclaimer

The trusts included here are not intended to be taken as investment advice and simply represent an example of the types of trust SIPP investors may be interested in following.

How Are the Best-Performing SIPP Investments Determined?

The best-performing SIPP investments are determined using a combination of quantitative metrics and qualitative assessments. 

Determining the best-performing investments involves evaluating past performance, although it is crucial to remember that past performance is not indicative of future results. 

Several key factors are generally considered when assessing the performance of SIPP investments:

• Return on Investment (ROI): This indicates the percentage gain or loss on an investment over a specific period and is compared against benchmarks or average market returns to gauge performance.
• Risk Management: Investments are often assessed based on their volatility and the investor’s risk tolerance. The best-performing investments are those that provide the highest returns relative to the level of risk taken.
• Consistency of Performance: Investments that deliver consistent returns over different market cycles are often considered favourable. This consistency can indicate robust investment strategies and effective management.
• Cost Efficiency: Investments with lower costs may be considered more favourable if they deliver similar or better returns compared to more expensive options.
• Diversification: The role of an investment within a diversified portfolio is important. Investments that contribute to a well-balanced portfolio, reducing overall risk while enhancing potential returns, are often highly valued.
• Fundamentals of Underlying Assets: For investments like stocks and bonds, the financial health, growth prospects, and stability of the issuing entities are closely analysed. For funds, the track record and expertise of the fund managers are also considered.
• Market Conditions and Economic Factors: The performance of investments is also assessed in the context of broader market and economic conditions. Investments that perform well during adverse market conditions may be rated highly.
• Alignment with Investment Goals: Investments are also evaluated based on how well they meet the investor’s specific goals, such as capital preservation, income generation, or long-term capital growth.

When assessing the best-performing SIPP investments, it is important to use a holistic approach, considering both the quantitative aspects, like ROI and volatility, and qualitative factors, such as the quality of management and investment strategy. 

Additionally, individual investors should consider their personal investment goals, time horizon, and risk tolerance when evaluating investment performance. 

Consulting with a financial advisor can provide personalised insights and help you make informed investment decisions.

How Do You Determine the Best-Performing SIPP Investment By Doing Your Own Research?

To determine the best-performing SIPP investment by doing your own research, undertake a comprehensive and systematic approach. 

This will involve analysing various aspects of potential SIPPs and their underlying investments. 

Here are some steps you can follow:

1. Review Historical Performance: While past performance is not a guarantee of future results, examining the historical performance of various SIPPs can provide insights. Look at long-term performance over different market cycles to gauge consistency.
2. Review Management Quality: If considering funds, research the track records of the fund managers.
3. Understand Risk: Match potential investments with your personal risk profile.
4. Stay Informed: Regularly review market news, investment analysis, and financial reports.
5. Seek Professional Advice: Consult a financial advisor for expert insights, especially for complex investment decisions.

Remember, the best-performing SIPP investment for one investor may not be the best for another. 

It is essential to align your choice with your personal circumstances, financial goals, and investment philosophy. 

Regularly reviewing and, if necessary, adjusting your SIPP investments is also key to ensuring that they continue to meet your evolving needs and market conditions.

Common Questions

In Conclusion

When navigating the intricate landscape of SIPPs, understanding investment types, assessing performance, and recognising the impact of fees, risks, and market conditions are paramount. 

Regular reviews and adjustments, guided by clear financial goals and informed risk assessment, play a crucial role in managing a robust portfolio. 

Ultimately, staying well-informed and considering personalised advice are key steps towards identifying and maintaining the best-performing SIPP investments.