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If you were picking a new basket of 7/8 ITs for income

General discussions about equity high-yield income strategies
TUK020
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If you were picking a new basket of 7/8 ITs for income

#520814

Postby TUK020 » August 8th, 2022, 7:36 pm

Targeting approx 4-5% yield, looking for a steadily growing income stream, without consuming its own capital.
A basket to last you 30 years.

If you were to pick one now, what would the composition be?

BullDog
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Re: If you were picking a new basket of 7/8 ITs for income

#520815

Postby BullDog » August 8th, 2022, 7:44 pm

I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.

Dod101
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Re: If you were picking a new basket of 7/8 ITs for income

#520817

Postby Dod101 » August 8th, 2022, 7:52 pm

TUK020 wrote:Targeting approx 4-5% yield, looking for a steadily growing income stream, without consuming its own capital.
A basket to last you 30 years.

If you were to pick one now, what would the composition be?


Strangely enough a friend asked me that very question last week as she is looking for some steady income so here is my list

Edinburgh
Temple Bar
Law Debenture
City of London
JPM Global Growth &Income
Murray International
Greencoat Wind
3i Infrastructure

If fewer are required I would drop Edinburgh or Temple Bar. I do not think that either Greencoat or 3i are ITs but they have the same characteristics. I think they all have a different investment house as their manager and all yield at least 3.5%, the highest yield being 5.6% from Greencoat. These all I think meet your requirements except that I do not know if they would all last for 30 years. Over that timescale you will need to allow for an adjustment or two I expect owing to reconstructions or other corporate events.

Substantial UK exposure but also some outside of the UK.

Dod

Arborbridge
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Re: If you were picking a new basket of 7/8 ITs for income

#520829

Postby Arborbridge » August 8th, 2022, 8:42 pm

BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.


Hmm, with the brief being 4-5%, there's only one there that would suffice at the moment.

Arb.

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Re: If you were picking a new basket of 7/8 ITs for income

#520830

Postby Arborbridge » August 8th, 2022, 8:44 pm

Dod101 wrote:
TUK020 wrote:Targeting approx 4-5% yield, looking for a steadily growing income stream, without consuming its own capital.
A basket to last you 30 years.

If you were to pick one now, what would the composition be?


Strangely enough a friend asked me that very question last week as she is looking for some steady income so here is my list

Edinburgh
Temple Bar
Law Debenture
City of London
JPM Global Growth &Income
Murray International
Greencoat Wind
3i Infrastructure

If fewer are required I would drop Edinburgh or Temple Bar. I do not think that either Greencoat or 3i are ITs but they have the same characteristics. I think they all have a different investment house as their manager and all yield at least 3.5%, the highest yield being 5.6% from Greencoat. These all I think meet your requirements except that I do not know if they would all last for 30 years. Over that timescale you will need to allow for an adjustment or two I expect owing to reconstructions or other corporate events.

Substantial UK exposure but also some outside of the UK.

Dod


The requirement was for 4-5% yield.

Dod101
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Re: If you were picking a new basket of 7/8 ITs for income

#520838

Postby Dod101 » August 8th, 2022, 9:39 pm

Arborbridge wrote:
Dod101 wrote:
TUK020 wrote:Targeting approx 4-5% yield, looking for a steadily growing income stream, without consuming its own capital.
A basket to last you 30 years.

If you were to pick one now, what would the composition be?


Strangely enough a friend asked me that very question last week as she is looking for some steady income so here is my list

Edinburgh
Temple Bar
Law Debenture
City of London
JPM Global Growth &Income
Murray International
Greencoat Wind
3i Infrastructure

If fewer are required I would drop Edinburgh or Temple Bar. I do not think that either Greencoat or 3i are ITs but they have the same characteristics. I think they all have a different investment house as their manager and all yield at least 3.5%, the highest yield being 5.6% from Greencoat. These all I think meet your requirements except that I do not know if they would all last for 30 years. Over that timescale you will need to allow for an adjustment or two I expect owing to reconstructions or other corporate events.

Substantial UK exposure but also some outside of the UK.

Dod


The requirement was for 4-5% yield.


Well I think we could probably squeeze 4% out of that. I think 5% is too ambitious for a good spread. I am assuming that the yield requirement was for the portfolio.

Dod

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Re: If you were picking a new basket of 7/8 ITs for income

#520842

Postby BullDog » August 8th, 2022, 10:08 pm

Arborbridge wrote:
BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.


Hmm, with the brief being 4-5%, there's only one there that would suffice at the moment.

Arb.

Depends when you buy though. I have all of them and all yielding North of 4%. There is a requirement not to eat capital. That really mandates a nearer to 4% rather than 5% yield in my experience. It seldom pays to reach for high yield in the long term would be my thinking.

moorfield
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Re: If you were picking a new basket of 7/8 ITs for income

#520844

Postby moorfield » August 8th, 2022, 10:29 pm

TUK020 wrote:Targeting approx 4-5% yield, looking for a steadily growing income stream, without consuming its own capital.
A basket to last you 30 years.

If you were to pick one now, what would the composition be?


Aiming higher ...

EAT - European Equity 8.8%
NCYF - Debt 8.7%
HFEL - Asia Pacific 8.6%
CSH - Property 7.0%
APAX - Private Equity 6.5%
AEI - UK Equity 6.4%
MAJE - Global Equity 6.4%
FSFL - Infrastructure 5.6%

I was pondering a similar exercise a little while ago, see viewtopic.php?f=31&t=33942

richfool
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Re: If you were picking a new basket of 7/8 ITs for income

#520846

Postby richfool » August 8th, 2022, 10:43 pm

BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.

I would pick the above (JGGI, LWDB, MRCH, MCT) and JEGI, AAIF, BRSA, plus EGL and JLEN.

Mike4
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Re: If you were picking a new basket of 7/8 ITs for income

#520851

Postby Mike4 » August 8th, 2022, 11:25 pm

richfool wrote:
BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.

I would pick the above (JGGI, LWDB, MRCH, MCT) and JEGI, AAIF, BRSA, plus EGL and JLEN.


May I suggest posting abbreviations is supremely unhelpful. I have no idea which any of these ITs are, just like probably everyone interested in the suggestions.

Yes we can google each and every one of them but why not just name them properly in the first place?

richfool
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Re: If you were picking a new basket of 7/8 ITs for income

#520861

Postby richfool » August 9th, 2022, 3:13 am

Mike4 wrote:
richfool wrote:
BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.

I would pick the above (JGGI, LWDB, MRCH, MCT) and JEGI, AAIF, BRSA, plus EGL and JLEN.


May I suggest posting abbreviations is supremely unhelpful. I have no idea which any of these ITs are, just like probably everyone interested in the suggestions.

Yes we can google each and every one of them but why not just name them properly in the first place?

I know and remember them by the tickers, so would have to make a google or HL or yahoo finance enquiry on each of them to find the correct exact full name. If not I would get picked up for a misspelling. Also, I dont always have time to stop and look them all up myself when posting late at night. It makes such posts laborious.

Most people who trade in IT's know most of them. If not and they are interested, they will find out when they do their own research. Sticking the ticker into HL, for example, will provide the name and if you click on it, a fact sheet.

Itsallaguess
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Re: If you were picking a new basket of 7/8 ITs for income

#520864

Postby Itsallaguess » August 9th, 2022, 6:27 am

For anyone looking to investigate further using any of the Investment Trust tickers listed on threads like this, then for the vast majority of income-IT's discussed on this board, using the AIC link below in a new tab and substituting the final '0P0000P87D' section of the AIC URL with any IT ticker being discussed will automatically jump to the relevant AIC page for that particular income-IT, from where the various available tabs on that AIC page can then be used for a quick view of related information, such as yield, performance, underlying holdings, geographical and sector spread etc., and of course the name of the actual Investment Trust being investigated...

https://www.theaic.co.uk/companydata/0P0000P87D

Here's an example using the above URL with the above final section removed, and replaced with the ticker JGGI -

https://www.theaic.co.uk/companydata/JGGI

I have one of the above AIC pages saved as a browser bookmark to allow really quick cross-references using an IT ticker as the only thing to initially go on...

Cheers,

Itsallaguess

Dod101
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Re: If you were picking a new basket of 7/8 ITs for income

#520867

Postby Dod101 » August 9th, 2022, 6:43 am

moorfield wrote:
TUK020 wrote:Targeting approx 4-5% yield, looking for a steadily growing income stream, without consuming its own capital.
A basket to last you 30 years.

If you were to pick one now, what would the composition be?


Aiming higher ...

EAT - European Equity 8.8%
NCYF - Debt 8.7%
HFEL - Asia Pacific 8.6%
CSH - Property 7.0%
APAX - Private Equity 6.5%
AEI - UK Equity 6.4%
MAJE - Global Equity 6.4%
FSFL - Infrastructure 5.6%

I was pondering a similar exercise a little while ago, see viewtopic.php?f=31&t=33942


Well at least EAT fails one test in that as I understand it it eats capital to get such a big yield and so more indirectly does HFEL. I would need to research some of the others. My list was drawn up literally for a widow.

I know which list I would have, but at least moorfield has come up with his list. Where is yours, Arb?

Dod

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Re: If you were picking a new basket of 7/8 ITs for income

#520869

Postby Arborbridge » August 9th, 2022, 7:04 am

BullDog wrote:
Arborbridge wrote:
BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.


Hmm, with the brief being 4-5%, there's only one there that would suffice at the moment.

Arb.

Depends when you buy though. I have all of them and all yielding North of 4%. There is a requirement not to eat capital. That really mandates a nearer to 4% rather than 5% yield in my experience. It seldom pays to reach for high yield in the long term would be my thinking.

Depends when you buy though.


This is called "changing the goalposts" in a discussion. The OP specified 4-5% yield, and I think the implcation was "now", not at some point in the past. You could have added a rider to make the recommendation valid such as "These would be worth keeping an eye on in future to buy if their yield comes within your requirement."

My comment was factual: it does not need a further meta-discussion.

Arb.
Last edited by Arborbridge on August 9th, 2022, 7:08 am, edited 1 time in total.

Arborbridge
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Re: If you were picking a new basket of 7/8 ITs for income

#520870

Postby Arborbridge » August 9th, 2022, 7:07 am

Mike4 wrote:
richfool wrote:
BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.

I would pick the above (JGGI, LWDB, MRCH, MCT) and JEGI, AAIF, BRSA, plus EGL and JLEN.


May I suggest posting abbreviations is supremely unhelpful. I have no idea which any of these ITs are, just like probably everyone interested in the suggestions.

Yes we can google each and every one of them but why not just name them properly in the first place?


It's no bother to use the AIC website and put in the ticker. This also has the benefit of bringing up all the details which one might need anyway.

Arb.

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Re: If you were picking a new basket of 7/8 ITs for income

#520875

Postby Dod101 » August 9th, 2022, 7:22 am

Mike4 wrote:
richfool wrote:
BullDog wrote:I would probably start with JGGI, LWDB and MRCH. Perhaps a sprinkling of MCT too. Thinking being that it's probably better to look beyond the UK as well as the "usual suspects" in an income or income/growth IT portfolio. Hope that helps.

I would pick the above (JGGI, LWDB, MRCH, MCT) and JEGI, AAIF, BRSA, plus EGL and JLEN.


May I suggest posting abbreviations is supremely unhelpful. I have no idea which any of these ITs are, just like probably everyone interested in the suggestions.

Yes we can google each and every one of them but why not just name them properly in the first place?


I agree with Mike4 but have stopped moaning about it. I thought we established some time back that names would be spelled out first time as a courtesy to others. The original poster mostly knows the full name surely and if not there is only one look up rather than several from different posters

It does not need to be exact in most cases; just enough to identify the IT.

Dod

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Re: If you were picking a new basket of 7/8 ITs for income

#520879

Postby Arborbridge » August 9th, 2022, 7:38 am

Dod101 wrote:I know which list I would have, but at least moorfield has come up with his list. Where is yours, Arb?

Dod


Good point - I'm a bit slow and do not keep abreast of the best offerings these days. All I can present is what I've actually invested in and below I give my ITs with historic yields within the 4-5% criterion as returned by HYPTUSS.

Whether they are eating capital or not, one would have to look in futher detail. This can be done initially on the HL website or similar by plotting "with dividends invested" or "without" - and just see how the capital line behaves.
I have also added a column to give my experience of the Total Return of these investments (measured by XIRR) since I bought them as a another guide to whether they are eating capital*. Clearly, the TR should be higher than yield, to allow for inflation, so MRCH and HFEL fail on this count, whereas SOI and MYI are the opposite - a reasonably yield and high TR. Where TR is not given, it is because I have not owned them long enough to have generated a reliable figure.



I recommend that you check some of these ITs - ruling out HFEL and MRCH - and see if they appeal to you. All except IVPU, MUT, JAGI, I have invested in for a considerable number of years.

*Note of caution: this is my experience only and the result depends on length of ownership and whether I invested at a bargain price or not.
Arb.

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Re: If you were picking a new basket of 7/8 ITs for income

#520882

Postby Itsallaguess » August 9th, 2022, 7:50 am

TUK020 wrote:
Targeting approx 4-5% yield, looking for a steadily growing income stream, without consuming its own capital.

A basket to last you 30 years.

If you were to pick one now, what would the composition be?


I thought it might be worth a quick exercise to see if we could come up with any sort of repeatable, data-led short-list for this, so below is a table of data from the AIC with the following filters applied -


  • Yield of 3.5% or over (with a view that overall portfolio yield can still potentially be over 4% if blended with other higher-yielding options..)
  • Market Cap over £100m
  • Share price 3-year total-return divided by 3 is greater than the current yield (testing for non-eaters...)
  • Share price 5-year total-return divided by 5 is greater than the current yield (testing for non-eaters...)


As usual, the table below is ranked in order of AIC Sector and then ordered within each sector by yield, with the Company Name column containing URL links to the relevant income-IT 'Portfolio' page on the AIC website, to help with quick access to further IT-specific information -




Anyone looking to carry out a similar exercise using different filter criteria can do so using this AIC page - https://tinyurl.com/yawfc9zy

It's been an interesting exercise to see that quite a few of the IT's already mentioned in this thread are contained in the above list, so hopefully it might offer up some other interesting options...

Usual caveats apply, of course - offered up as an interesting data-slice only - don't invest without carrying out further due-dilligence etc.....

Cheers,

Itsallaguess

Dod101
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Re: If you were picking a new basket of 7/8 ITs for income

#520884

Postby Dod101 » August 9th, 2022, 7:53 am

Arborbridge wrote:
Dod101 wrote:I know which list I would have, but at least moorfield has come up with his list. Where is yours, Arb?

Dod


Good point - I'm a bit slow and do not keep abreast of the best offerings these days. All I can present is what I've actually invested in and below I give my ITs with historic yields within the 4-5% criterion as returned by HYPTUSS.

Whether they are eating capital or not, one would have to look in futher detail. This can be done initially on the HL website or similar by plotting "with dividends invested" or "without" - and just see how the capital line behaves.
I have also added a column to give my experience of the Total Return of these investments (measured by XIRR) since I bought them as a another guide to whether they are eating capital*. Clearly, the TR should be higher than yield, to allow for inflation, so MRCH and HFEL fail on this count, whereas SOI and MYI are the opposite - a reasonably yield and high TR. Where TR is not given, it is because I have not owned them long enough to have generated a reliable figure.



I recommend that you check some of these ITs - ruling out HFEL and MRCH - and see if they appeal to you. All except IVPU, MUT, JAGI, I have invested in for a considerable number of years.

*Note of caution: this is my experience only and the result depends on length of ownership and whether I invested at a bargain price or not.
Arb.


Thanks. I always think that actual figures are much better than a theoretical list. My list is not so very different from yours in fact. I was asked directly if I could recommend some ITs yielding around 3/4% for a real life widow and being put in that position does concentrate the mind in terms of identifying and recommending anything. In fact I feel very uncomfortable doing that and hedged my recc with all sorts of stuff. I know that she would not be impressed with the likely outcome from say HFEL. She would ask quite rightly, 'What is the point in a nice big yield if it is at the expense of my capital?'

Your numbers are very helpful.

Dod

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Re: If you were picking a new basket of 7/8 ITs for income

#520891

Postby nmdhqbc » August 9th, 2022, 8:20 am

i've got a little spreadsheet for suggesting to my mum what to do with the proceeds of a flat sale. i've had to tweak the numbers to get it to 4%. the £100k is just a random number that drives the spreadsheet. no idea how much it will be. the more she gets for the flat the more we can tweak the %'s so it's less hindered by the high yield but still replaces her previous net rent. the income should grow much quicker too with zero effort.

edit: when i say "hindered by the high yield" i just mean from a diversity perspective. i'm sure there might be times when the highest yield trust outperform the others.



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