Have you got a lump sum to invest for retirement but don’t want to put it into a pension?
Our Long-term Growth Portfolio is designed to grow your capital into a heftier lump sum while you keep control of your investments.
The lump sum generated could be re-invested to provide more capital growth but is primarily meant to be used to buy an income on retirement to top-up existing pension entitlements.
Investing a lump sum? Arrange expert advice here
When we say long-term we mean 15 years or more
The Long-Term Growth Portfolio is designed on the basis that no capital will be drawn on for at least 15 years as 70% of its assets are in shares.
This portfolio is intended for someone with 15 years or more to retirement, who plans to use all the money to generate retirement income and is sure they will not need to draw on the capital for at least 15 years.
At retirement, some of the investments will need changing in order to generate a higher income. The portfolio’s aim is growth. I explain the reasoning behind the choice of investments and asset classes below the table.
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The £20,000 Long-Term Growth Portfolio
| Asset Class | Investment | Amount | % of total |
| Cash | | Nil | 0 |
| Fixed rate | | | |
| Aegon Global Bond | 2,000 | 10 |
| Property | | | |
| Standard Life Select Property | 2,000 | 10 |
| M&G Property Portfolio | 2,000 | 10 |
| Shares | | | |
| UK (36%) | Standard Life UK Equity High Income | 2,500 | 12.5 |
| Jupiter Income | 2,000 | 10 |
| AXA Framlington UK Smaller Companies | 2,000 | 10 |
| | | |
| Overseas (34%) | | | |
| Schroder Global Equity Income | 3,000 | 15 |
| Jupiter Financial Opportunities | 1,500 | 7.5 |
| AXA Framlington Japan | 1,500 | 7.5 |
| Artemis European Growth | 1,500 | 7.5 |
| Total | | 20,000 | 100 |
All these funds can be purchased via fund supermarkets. Most of these funds are included in our Best Buy tables.
Each fund sector is reviewed every six months and you can find comment on the sectors and funds in our Investing channel. The supermarkets give you access to the latest monthly fund factsheets. For a growth portfolio, we recommend buying accumulation units where any income is automatically reinvested in more units.
Aegon Global Bond - Aegon have assembled an impressive team of fixed-interest managers and their funds have produced above-average performance. Fund manager David Roberts will ‘go-anywhere, buy anything’, and aims for steady returns from bonds, not (as most other bond funds do) a stable income.
Standard Life Select Property - Launched in Autumn 2005, this fund invests in both physical property and in property shares in the UK and overseas. It currently holds about three-quarters of its assets overseas. As a large property investor Standard Life has a highly experienced management team.
M&G Property Portfolio - M&G is owned by the Prudential and the M&G Property fund managers look after several billions worth for their parent company. This is a ‘bricks and mortar’ fund investing in UK shops, offices and warehouses. The fund is conservatively managed by John Cartwright.
Interested in learning more about what SIPPs can do?
The UK-focused equity funds
Standard Life UK Equity High Income - Manager Karen Robertson aims for long-term growth in capital and income from investing in UK shares. It should be the steadiest performer of the share-investing funds in this portfolio.
Jupiter Income - run in a conservative style by long-term manager Tony Nutt, this has an excellent record of paying out stadily rising dividends.
AXA Framlington UK Smaller Companies - Roger Whiteoak has a good record of picking winners among dynamic UK smaller businesses.
The overseas-focused equity funds
Schroder Global Equity Income - a newcomer applying the highly successful ‘equity income’ discipline to world markets.
Jupiter Financial Opportunities - Philip Gibb’s one-minded focus on one of the biggest investment sectors has produced excellent results and the growth of emerging markets should present him with plenty more profit potential.
AXA Framlington Japan - Anja Balfour runs a balanced portfolio including both large and smaller companies.
Artemis European Growth - Philip Wolstencroft is one of the highest-rated fund managers in the European sector and his flexible approach should bring good results whatever the short-term market conditions.
Investing a lump sum? Arrange expert advice here
Don’t forget to review
As with all portfolios, we recommend regular reviews, preferably every six months but at least once a year. Any funds that have been removed from our Best Buy lists should be investigated and may need to be switched if performance has deteriorated or the manager has left.
Since many of its holdings are growth-focused, you should expect substantial swings in the prices of individual funds- in the past, some have seen falls of 20% within a few months. Fluctuations in the overall value of the portfolio should be less because of its more stable property and UK Equity Income holdings, but will still be greater than those of our 5-year Growth Portfolio.
