The allure of the ‘best’ SIPP investments is strong, but remember, a one-size-fits-all solution rarely exists. 

SIPPs, with their flexibility and tax benefits, offer an excellent vehicle for wealth accumulation. 

But with all the many options available, pinpointing the most promising investments can be challenging.

The EveryInvestor team has compiled this guide with the aim of empowering you to ditch the hype and explore key factors for identifying investments that align with your unique financial goals and risk tolerance. 

All our content undergoes quality and compliance checks to ensure we are bringing you only the most relevant and up-to-date information on identifying the best SIPP investments.

Which Are the Best SIPP Investments?

The best SIPP investments often include a diverse mix of asset classes to balance risk and return, tailored to your retirement timeline and risk tolerance. 

Typically, these can range from stocks and shares to bonds and funds, including index funds and actively managed funds, and commercial property.

Briefly:

• Stocks and shares often offer the potential for higher returns but come with increased volatility, making them more suitable for those with a longer time horizon until retirement. 
• Bonds and fixed-income investments, on the other hand, provide a more stable income stream, making them a good choice for investors seeking lower risk. 
• Funds, particularly index funds, offer diversification and exposure to a broad market segment or industry, reducing the risk of individual investment underperformance. 
• Commercial property can provide a steady income through rental yields and potential capital appreciation but requires more significant initial capital and carries specific market risks. 

SIPP investments should be tailored to each person’s financial goals, investment knowledge, and risk tolerance.

Top 5 Funds

The top 5 funds for inclusion in a Self-Invested Personal Pension portfolio cannot be definitively identified because of the dynamic nature of the financial markets and the individual investment goals of each investor. 

Identifying the ‘best’ funds is challenging because:

• Market volatility affects fund performances annually, making consistency rare.
• Investor objectives vary, with different risk tolerances and financial goals.
• Diversification needs mean that what is ‘best’ depends on an investor’s current portfolio makeup.
• Management and fees can impact net returns, where higher fees may diminish gains.
• Evolving trends influence which sectors or themes might lead in performance over time.

Choosing the right funds involves a lot of research on performance, strategy, fees, and how these funds complement your investment goals. 

Regular portfolio reviews are essential to adapt to market shifts and personal financial changes.

With that in mind

We have compiled a list of funds to consider when you start researching potential investments. 

These insights were gleaned by perusing the Financial Times’s market data.

Vanguard LifeStrategy 100% Equity Fund

Vanguard LifeStrategy 100% Equity Fund is a passive global equity fund, investing in both developed and emerging markets, with at least 90% of the fund’s assets tracking a benchmark index instead of actively managed.

Vanguard LifeStrategy 80% Equity Fund

The Vanguard LifeStrategy 80% Equity Fund has a similar objective to the LifeStrategy 100% Equity Fund, but it invests 80% of its assets in equities and 20% in bonds. 

BlackRock World Technology Fund A2

The BlackRock World Technology Fund is an actively managed, high-risk fund targeting technology companies worldwide whilst remaining focused on environmental, social and governance (ESG) investing. 

The fund seeks long-term capital growth by investing in firms involved in technology development and application, like Microsoft, Apple, and NVIDIA.

Aviva Investors Climate Transition Global Equity Fund 8

The Aviva Investors Climate Transition Global Equity Fund aims to outperform the MSCI® All Country World Index by investing at least 90% of the fund in companies that have been optimised to adapt to the changing climate.

SEI Global Master Fund plc: The SEI Dynamic Asset Allocation Fund

The SEI Dynamic Asset Allocation Fund is an actively managed, high-risk fund.

Note that owing to the risk level, this fund should not form a significant part of the portfolio of an investor nearing retirement.

Top 5 Investment Trusts

The top 5 investment trusts for a SIPP portfolio cannot be precisely pinpointed owing to the ever-changing landscape of the financial markets and the unique investment profiles of individuals. 

Identifying the ‘best’ five investment trusts is challenging because:

• Market fluctuations can greatly affect investment trust performance.
• Investor goals and risk tolerance differ, making a trust ideal for one investor not suitable for another.
• Matching trusts to investors’ portfolio needs is necessary owing to their diverse sectors and geographies.

To find the best investment trusts, research performance, sector focus, geographic exposure, management quality, and how these factors fit into your investment strategy. 

Maintaining an optimal SIPP portfolio requires regularly reviewing and adjusting investments according to market conditions and personal financial goals.

However

By perusing markets data from a number of industry sources, our team has picked five investment trusts you may want to consider when doing your SIPP research.

Alliance Trust Ord

Alliance Trust is a diversified investment trust, which means it invests in a range of assets, including equities, fixed income, and cash.

According to Morningstar’s analysis, at least 74% of the portfolio is actively managed.³

Scottish Mortgage Investment Trust Plc

Scottish Mortgage is an actively managed investment trust, which means the portfolio is actively managed by a team of investment professionals.

The trust, managed by Baillie Gifford, invests in a wide variety of industries and geographies.⁴

F&C Investment Trust Plc 

F&C is a UK equity income investment trust, meaning it aims to provide investors with a combination of capital growth and income.

The trust is managed by Columbia Threadneedle Investment Business Limited and invests in a wide range of stocks and shares from around the world, including private companies. 

According to Hargreaves Lansdown’s summary, the trust also borrows money to invest, which can help increase returns, and the trust invests in areas such as technology, consumer goods, industrial companies, finance, healthcare, telecoms, energy, and utilities.⁵

City of London Investment Trust Plc

The City of London Investment Trust is a closed-end global equity income trust managed by Janus Henderson Group plc that invests in diverse companies worldwide to generate income for investors.

The trust aims to make long-term gains mainly by investing in UK stocks, especially focusing on big, international companies. 

The Financial Times reports that the trust invests in areas like fossil fuels, aerospace, banks, personal and healthcare stores, tobacco, media, pharmaceuticals and biotech, life insurance, financial services, metals, mining, and more.⁶ 

Bankers Investment Trust Ordinary 2.5p

This investment trust is managed by Janus Henderson Fund Management UK Limited.

Hargreaves Lansdown’s summary states that, by investing in companies globally, this trust aims to outperform the Financial Times Stock Exchange (FTSE) World Index in terms of growth and achieve inflation-beating dividends.⁷

Money is invested in stocks, bonds, cash, investment funds, group investments, and financial contracts. 

The fund invests in many areas, including technology, manufacturing, finance, consumer products, healthcare, basic goods, telecommunications, energy, materials, real estate, and utilities.

Top 5 Shares

The top 5 shares for inclusion in a SIPP cannot be universally determined because of the same reasons outlined above.

Finding the right SIPP shares requires analysis of the company’s fundamentals, the industry’s growth potential, and the investment’s fit with the portfolio strategy. 

Regular monitoring and rebalancing of the portfolio are essential to adapt to changing market conditions and personal financial goals.

To get you started, we have compiled a list of five shares to take a look at.

Centrica plc Ord 6,14/81p

Centrica is the parent company of British Gas, a leading energy provider to residential and small business customers in the United Kingdom, the Republic of Ireland, and beyond.

Microsoft Corp

Microsoft is a well-known technology company that develops and provides software, hardware devices, and other computing solutions.

NVIDIA Corp USD0.001

NVIDIA is a tech company based in the US that makes semiconductors and high-end graphics processing units (GPUs).

EQTEC plc EUR0.01 (CDI)

Eqtec is a clean technology company that works in the waste-to-energy space.

Many types of waste can be reliably and sustainably turned into something called ‘syngas’ by the company’s patented Advanced Gasification Technology, and this ‘syngas’ can then be used to manufacture many types of energy sources on a large scale.

Investec Plc

Investec is a bank and wealth manager with offices in the UK and other countries that provides a diverse array of banking and wealth management services. 

It offers wealth and investment and private banking services to individual clients and  corporate and investment banking to businesses. 

This involves collaborating with private companies, businesses owned by private equity, and publicly traded companies, with a particular emphasis on specific industries. 

Top 5 ETFs

The top 5 ETFs for a SIPP portfolio cannot be precisely identified owing to the varied nature of investment strategies and the personal financial goals of each investor.

Choosing the right ETFs involves researching their underlying assets, performance history, fees, and how they align with your investment strategy and retirement goals. 

To adapt to market and personal financial changes, update your ETF holdings regularly.

If you need a starting point, take a look at our list of ETFs to consider.

Vanguard S&P 500 UCITS ETF

This ETF represents a simple, low-cost way to track the S&P 500 index.

iShares Core MSCI World UCITS ETF GBP Hedged (Dist)

This ETF aims to offer investors a comprehensive return that encompasses both capital appreciation and earned income. 

This return is designed to track the performance of the MSCI World Index closely.

Vanguard FTSE All-World UCITS ETF GBP

This ETF aims to grow investors’ money over the long term. 

It does this by following the performance of the Index, which is made up of large and medium-sized companies from both developed and developing countries, based on how much they are worth in the market.

iShares Core FTSE 100 ETF GBP Dist

The iShares Core FTSE 100 ETF GBP Dist provides direct exposure to the FTSE 100 index, representing the top 100 companies on the London Stock Exchange.

iShares Core S&P 500 ETF USD Acc GBP

iShares Core S&P 500 ETF USD Acc GBP is a low-cost, liquid, and straightforward way to gain exposure to the S&P 500 index.

What Investments Can You Hold in a SIPP?

The investments you can hold in a SIPP are varied and flexible, allowing you to tailor your retirement savings to your specific financial goals and risk tolerance. 

Some of the popular investment options include:

• Stocks and shares.
• Corporate bonds (debt securities from companies) and gilts (UK government bonds).
• Investment trusts and funds.
• Commercial real estate; residential property, however, is typically not permissible.¹
• Cash deposits.
• Commodities like gold, though this is less common.²
• Alternative investments like forestry, farmland, or certain types of collectibles.
• Structured products, i.e. financial instruments designed to offer specific returns based on the performance of underlying assets, such as an index or single stock.
• Foreign currency or funds or accounts denominated in foreign currencies.
• Insurance bonds.
• Hedge funds.

What Are the Best Types of SIPP Investments?

The best types of SIPP investments are those that align with your financial goals, risk tolerance, and time frame for investment, offering a balanced approach to growth and income. 

Popular investment types include:

• Equities (Stocks & Shares): Growth-oriented SIPPs rely on equities for long-term returns. Risk can be reduced by investing in multiple sectors and regions.
• Bonds: Government and corporate bonds provide a fixed income, making them a stable investment for those who want regular returns or to balance out the fluctuation of equities.
• Funds: Mutual funds, index funds, and ETFs let investors create a diversified portfolio managed by professionals or tracking indexes to balance risk and return.
• Commercial Property: Real estate investments offer rental income and capital appreciation, appealing to investors seeking alternatives to stocks and bonds.
• Cash Savings: Keeping a portion of your SIPP in cash or cash equivalents can provide liquidity and a buffer against market volatility in the short term.
• Alternative Investments: Commodities, private equity, and venture capital can diversify portfolios for experienced investors, but they are riskier and less liquid.

Selecting the best types of SIPP investments depends on understanding your investment timeframe. 

How so?

A longer timeframe allows for more equity and alternative investment exposure for growth, while a shorter timeframe may require more bonds and cash for stability. 

Your SIPP portfolio must be reviewed and adjusted regularly to meet your retirement goals and accommodate market conditions.

How to Choose the Best SIPP Investments for You

To choose the best SIPP investments for you, consider your risk tolerance, how long you have left to invest for retirement, and do as much research as you can.

Here is a list of considerations:

• Know your risk tolerance: Do you like high-risk, high-reward investments or safer ones?
• Set investment goals: Do you want growth, income, or both? Choose SIPP investments based on your goals.
• Think about time: When will you retire? More time to recover from market downturns may allow you to take more risk.
• Diversify: You can lower your risk and increase your potential returns by spreading your investments across different asset classes and sectors, such as stocks, bonds, and real estate.
• Research potential investments: Before adding an investment to your SIPP, check its performance, management fees, and risk. 
• Monitor market trends: Stay informed about the financial markets and adjust your investments as necessary to respond to changing economic conditions.
• Consult a financial advisor: If you are unsure, consider seeking advice from a financial advisor who can provide personalised recommendations.

By following these steps, you can make informed decisions to select the best SIPP investments that align with your financial goals and risk tolerance.

Should I Adjust My SIPP Investments Over Time?

Yes, you should adjust your SIPP investments over time to reflect changes in your risk tolerance, financial goals, and the economic landscape.⁸ 

As you approach retirement, you might prefer more conservative investments to protect your capital. 

Your investment objectives can also evolve with life’s changes, necessitating adjustments to your portfolio. 

The dynamic nature of financial markets means that staying responsive to market fluctuations can present new opportunities and help manage risks. 

Additionally, rebalancing your portfolio ensures it remains diversified, aligning with your investment strategy. 

Tax laws and regulations can also change, impacting the tax efficiency of your investments. 

Regularly reviewing and adapting your SIPP investments, at least annually or after significant life events, is crucial to keeping your retirement savings aligned with your long-term financial goals.

This information is presented for informational purposes only and is not intended as investment advice; consider consulting a qualified financial advisor before making SIPP investment decisions.

Common Questions

In Conclusion

Choosing the best SIPP investments requires careful consideration of your individual financial goals, risk tolerance, and investment horizon. 

It is important to review and adjust your portfolio regularly to respond to changing market conditions, personal circumstances, and financial objectives. 

By staying informed, diversifying your investments, and possibly consulting with a financial advisor, you can make decisions that enhance the growth and security of your retirement savings. 

By taking these steps, you can confidently build and maintain a portfolio of the best SIPP investments that align with your long-term financial aspirations.