5 ETFs that will turbocharge your SIPP!

Exchange Traded Funds (ETFs) have revolutionised the business of investing for your future. Unlike unit trusts offered by fund managers, ETFs do away with an initial charge, although they do have dealing costs (which vary according to broker or discount SIPP provider).

ETFs also have very low annual management fees compared to unit trusts and investment trusts - sometimes the annual fee can be less than 0.5%. ETFs also rarely charge other fees such as a performance related fee.

ETFs are bought and traded just like shares in corporations. This means that they can be bought and sold at any time, unlike unit trusts which can be fairly illiquid, especially if the fund is underperforming.

Exchange traded funds now exist for a wide variety of investment objectives, markets and investment themes. Due to the low annual fees SIPP investors are heavy investors in ETFs, as the lower fees make a significant difference to investment returns over the life of an investment held for a long time period - which is typical with a personal pension.

All of these ETFs below can also be held within a stocks & shares Individual Savings Account (ISA) or a standard investment account.

The iShares GBP Corporate Bond ETF contains a portfolio of interest generating corporate bonds. The bonds have a bias towards the financial sector and large businesses. Although there are a large number of corporate bond unit trusts the advantages of the ETF are that it has a very low annual management charge, as well as being easier to trade in and out of.

Similar ETFs are available which contain Euro or US dollar denominated corporate bonds.

As well as stocks and shares, it is also possible to find ETFs with commercial property themes. Commercial property pays dividends and there is also the possibility of capital growth.

While there are numerous commercial property unit trusts from fund managers such as Aviva, Standard Life and Henderson, it can sometimes be difficult to buy and sell commercial property unit trusts. In order to ensure that properties are not sold at below market value prices, a fund manager of a commercial property unit trust may suspend redemptions. Recently there have also been problems buying back into commercial property funds, as demand has outstripped supply!

This ETF contains a basket of shares a number of high yielding medium to large companies.

Similar high yielding ETFs are also available to cover the Euro zone as well as the Asia Pacific region (mainly Australia).

The iShares FTSE BRIC 50 ETF provides investment exposure to the largest emerging market BRIC economies in the world, which are Brazil, Russia, India and China. All four countries have large multinational resource companies in the oil and mining sectors. There is also a growing middle class within these countries, and sectors such as insurance, financials and mobile telecommunications are booming.

ETFS Securities have a great offering of ETFs that provide exposure to a wide range of commodity investments. As a wealth preservation investment, it is hard to argue about the value of gold as an investment.

ETFS Securities Physical Precious Metals contains investments in four precious metals - gold, silver, platinum and palladium. Although gold is best known as a preserve of wealth, the other three all have a wide variety of industrial uses. Demand for gold is rising and yet gold production is falling. Platinum and palladium are essential components of vehicle catalytic converters, yet they are also incredibly rare.

The ETFS Securities Physical Precious Metals ETF invests in actual bars of these precious metals which are securely stored within bank vaults.

ETFS Securities also offers ETFs that invest solely in one of the four precious metals.

This hub gives a few ETF investment ideas for a SIPP. As always this article does not constitue advice and if you have any doubts as to a suitability of an investor then it's best to consult a financial advisor.

Have you found any more great ETFs? Tell us about them below! If you find this page useful, don't forget to use the voting buttons below.

The author of this article is not authorised by the UK authorities to give financial advice. This article does not consitute financial advice. Before making investment decisions consult an independent financial advisor.