Fraction of financial wealth held in equities

[Bubblesofearth]

Following a post I replied to on another board I'm curious to know what fraction of Lemonfools' financial wealth is held in equities. As per the UK wealth surveys, financial wealth excludes pension and property wealth. Understanding this would IMO shed some light on some of the discussions and biases on these boards.

[swill453]

Sorry I misread it and voted the opposite of what I should have. My "10 - 20%" should be "80 - 90%".

Scott.

[mc2fool]

Following a post I replied to on another board I'm curious to know what fraction of Lemonfools' financial wealth is held in equities. As per the UK wealth surveys, financial wealth excludes pension and property wealth. Understanding this would IMO shed some light on some of the discussions and biases on these boards.

But what if your "pension wealth" is SIPPs invested in equities?

Also, I wonder, do you really mean just equities or more broadly securities in general? E.g. how about gilts, corporate bonds, options, etc? And if not should folks be counting on a "look through" basis for OEICs/ITs/ETFs? E.g. if one holds, say, the Vanguard LifeStrategy 60/40 fund does all of it count or only 60% of it?

[Urbandreamer]

Drat. Bubblesofearth and I tried for the same poll.

Here is my version.
viewtopic.php?f=8&t=41439

As I said there, I desire close to 100% equities (shares/funds/investment trusts NOT bonds).
However currently I'm 11% cash.

[Bubblesofearth]

Sorry I misread it and voted the opposite of what I should have. My "10 - 20%" should be "80 - 90%".

Scott.

I ticked the box that enables you to change your option, at leat I think that what it does!

BoE

[Bubblesofearth]

But what if your "pension wealth" is SIPPs invested in equities?

Also, I wonder, do you really mean just equities or more broadly securities in general? E.g. how about gilts, corporate bonds, options, etc? And if not should folks be counting on a "look through" basis for OEICs/ITs/ETFs? E.g. if one holds, say, the Vanguard LifeStrategy 60/40 fund does all of it count or only 60% of it?

I would class SIPP's as part of pension wealth (with all the regulations surrounding them) and therefore not part of financial wealth for the purposes of this survey. I believe this is how the UK wealth survey makes the distinction. But I appreciate one can argue the other way! These surveys will always be open to interpretation to some degree.

Regarding equities, yes I mean just equities. Cash, gilts, bonds, commodities (e.g. gold) and crypto would be examples of financial wealth distinct from equities. A Vanguard life strategy 60/40 fund would therefore be considered 60% equity wealth and 40% other. I would also consider collectables with investment value (antiques, coins, stamps etc) to be part of financial wealth but would not include physical items that depreciate (household furniture, cars, white goods etc). Again, I would refer to the UK wealth survey where such items would be considered under physical wealth.

Hope that helps to at least some degree.

BoE

[88V8]

I voted 30-40% but about a third is in Prefs, so that could make it 60-70% depending on your definition.

And ITs might be equities, albeit at second-hand. In which case it would be higher still.

V8

[SteadyAim]

I aim for ~80% equities in general, with 20% in cash / gilts to allow for income when needed and provide investment flexibility. (My ISAs pay income to my bank account but it's not enough to live off.) I consider my ISAs and SIPP all one big pot, so I've answered on that basis, assuming the ISAs and SIPP have a similar split.

In practice I expect this to be anywhere between 60% and 100% equities depending on the relative value of cash / gilts / equities. My longer-term strategy is to get progressively more in FTSE 250 trackers and not bother trading (except maybe smaller "fun" amounts). I was too slow getting into the 250 years ago (thought it was expensive) and have held good amounts in FTSE 100 trackers since the financial crash. Been switching more into the 250 this year, so now have roughly 2:1 (ftse250:ftse100). Will get a bit deeper into the 250 if relative value gets even better, but will probably always hold a little in the 100. Also hold bank prefs and Berkshire and a few odd shares.

This year I've been buying gilt ETFs (for the first time ever!) as yields seemed attractive.

[mc2fool]

But what if your "pension wealth" is SIPPs invested in equities?

Also, I wonder, do you really mean just equities or more broadly securities in general? E.g. how about gilts, corporate bonds, options, etc? And if not should folks be counting on a "look through" basis for OEICs/ITs/ETFs? E.g. if one holds, say, the Vanguard LifeStrategy 60/40 fund does all of it count or only 60% of it?

I would class SIPP's as part of pension wealth (with all the regulations surrounding them) and therefore not part of financial wealth for the purposes of this survey. I believe this is how the UK wealth survey makes the distinction. But I appreciate one can argue the other way! These surveys will always be open to interpretation to some degree.

Regarding equities, yes I mean just equities. Cash, gilts, bonds, commodities (e.g. gold) and crypto would be examples of financial wealth distinct from equities. A Vanguard life strategy 60/40 fund would therefore be considered 60% equity wealth and 40% other. I would also consider collectables with investment value (antiques, coins, stamps etc) to be part of financial wealth but would not include physical items that depreciate (household furniture, cars, white goods etc). Again, I would refer to the UK wealth survey where such items would be considered under physical wealth.

Hope that helps to at least some degree.

Yes and maybe. It helps in that it makes it clear what you're after, and for cases like a 60/40 fund it's simple, but less so for ITs like, say, Capital Gearing, Personal Assets, Ruffer, etc where one would have to investigate how much of their holdings are in equities vs bonds vs private equity, etc, today.

And ITs might be equities, albeit at second-hand. In which case it would be higher still.

ITs are, of course, equities themselves: you are a shareholder of them, holding (in most cases) common stock. And it does appear that from BoE's comment re the 60/40 fund that "at second-hand" holdings (via ITs, ETF, OEICs, etc) should be counted. Which, as I say, is easy in some cases and less so in others.

(Yes, I know there are "look through" tools on the likes of Trustnet and Morningstar....)

[qwaszx]

85% “on the market” - beit directly held shares, ITs, REITs, PIBs, bonds or whatever. 15% cash.
No watches.

[Lootman]

I voted 30-40% but about a third is in Prefs, so that could make it 60-70% depending on your definition.

And ITs might be equities, albeit at second-hand. In which case it would be higher still.

Preference shares are classed as equities, because they represent a class of ownership. That is why they are called "shares" and not bonds, which they otherwise look more like. If a poll wished to exclude preference shares then it would presumably ask about "ordinary shares" and not "equities".

I include ITs both because they are ordinary shares, and because they are mostly invested in shares. They may of course hold cash or bonds, but then some are more than 100% in shares due to borrowing.

I am surprised to see how many Lemons are over 90% in shares, and also how many have less than 50% in shares.

[Hariseldon58]

Well if their financial wealth is 90% + suggests their pensions and property wealth is very low …

[GrahamPlatt]

Well if their financial wealth is 90% + suggests their pensions and property wealth is very low …

Following a post I replied to on another board I'm curious to know what fraction of Lemonfools' financial wealth is held in equities. As per the UK wealth surveys, financial wealth excludes pension and property wealth. Understanding this would IMO shed some light on some of the discussions and biases on these boards.

[fromdusktilldawn]

I didnt realise pensions and property were excluded until after I voted 30-40%. My revised answer is 50-60%.

[elephanthunt11]

82% stock, 6% gold bullion (physical, stored in home safe), 7% fixed term savings bonds, 5% cash on hand, easily accessible.

[CliffEdge]

82% stock, 6% gold bullion (physical, stored in home safe), 7% fixed term savings bonds, 5% cash on hand, easily accessible.

Where do you live?

[vand]

These sort of polls are fairly badly constructed if they don't make a distinction between

property as in investment vs your home
DC pension vs DB pension
Personal vs business wealth

[scrumpyjack]

Well if their financial wealth is 90% + suggests their pensions and property wealth is very low …

Following a post I replied to on another board I'm curious to know what fraction of Lemonfools' financial wealth is held in equities. As per the UK wealth surveys, financial wealth excludes pension and property wealth. Understanding this would IMO shed some light on some of the discussions and biases on these boards.

I included my pension fund which is a SIPP and 100% in equities. I exclude pensions in payment (state and private).

I excluded my home as I thought the term 'financial' wealth excluded that. It has no mortgage.

[tjh290633]

Well if their financial wealth is 90% + suggests their pensions and property wealth is very low …

That does not make sense. If you are in receipt of pensions from the state of employers, or income from annuities, then your pension wealth is zero.

Property that you live in does not count for financial wealth, BTL property would.

I think that you have the wrong end of the stick.

TJH

[dealtn]

Well if their financial wealth is 90% + suggests their pensions and property wealth is very low …

That does not make sense. If you are in receipt of pensions from the state of employers, or income from annuities, then your pension wealth is zero.

If I offered to make you wealthier by giving you £1,000 in exchange for that future income stream would you turn it down? If not why would that make sense if the offer made you wealthier?