Is SMIF exotic?

[ukmtk]

When I tried to buy some SMIF at HL yesterday I had to jump through hoops to prove that I understand risky investments and could lose all my money.
When I added SMIF to my Regular Investment for ISA at AJBell there was no issue.
As far as I can tell SMIF is basically corporate debt?
Its largest holding is a mere 2.7% of the portfolio.
Is it exotic or not?

Many thanks in advance for any enligtenment.

[yieldhog]

When my accounts all got taken over by ii I found they would allow me to keep the SMIF I already owned but would not allow me to buy any more. Then I saw some comments on TLF mentioning purchases of SMIF at ii and have since been able to buy more.

At the time, I noticed that information from SMIF did mention it was an institutional fund and not available to private individuals. I spoke with the man who runs SMIF who confirmed at that time that SMIF was institutional only. I can't remember his name but he was very helpful and informative.

Clearly something has changed but I'm not sure if it was SMIF that changed it's rules or brokers changing their's.

It's true that it's not your normal corporate high yield fixed income fund and does contain things like MBSs, but since I've owned it the performance has been excellent and now that interest rates appear to be headed lower we should see some further upward movement in the price along with a stable dividends.

Y

[Gerry557]

Iweb wouldn't let me buy or transfer to them. There was some vague answer that I didn't understand.

I did buy some with ii

I didn't really think it exotic, just a monthly paying corporate bond fund. The plan was to put in a broker to pay out so I had some cash coming in. Obviously that plan failed as I selected iweb to be that broker.

I considered selling and moving onto something else but it's yielding 10%+ with some capital gain to boot. Maybe I shudda bought more

[88V8]

When I tried to buy some SMIF at HL yesterday I had to jump through hoops to prove that I understand risky investments and could lose all my money.

I have about £70k in SMIF.
No trouble buying it via ii, ditto for the wife who is not a sophisticated investor.

I think HL have their knickers in a twist.

V8

[ukmtk]

Thanks V8 - I'll rest easy with my £800 in SMIF!

[midgesgalore]

When I tried to buy some SMIF at HL yesterday I had to jump through hoops to prove that I understand risky investments and could lose all my money.
When I added SMIF to my Regular Investment for ISA at AJBell there was no issue.
As far as I can tell SMIF is basically corporate debt?
Its largest holding is a mere 2.7% of the portfolio.
Is it exotic or not?

Many thanks in advance for any enligtenment.

I tried to buy just enough for 1K dividend / annum via HL and was initially refused and offered a 3 part, multiple choice, questionnaire to check my level of investment sophistication. I didn't get one of the questions correct but some of the answer options for that question were much the same.

Anyway on reflection there is more than corporate debt in that IT - kind of obvious as the yield is so high and SMIF still get a decent management charge on their IT. They get involved with financing of bank CET1 capital with European Asset Backed Securities and bonds,
Investment grade bonds and also gilts
B- grade bonds that are not very liquid
Contingent Convertibles (Cocos in their parlance)
Collateralised Loan Obligations type of pooled bonds (CLOs)

SMIF have a website with layman explanations of this structured mix of debt and their acronyms. If you get one of their briefs there are links to others.
https://www.twentyfouram.com/education/everything-you-need-to-know-about-clos

Whilst I wait for my dividends to rebuild to a suitable amount (to try again later at a SMIF purchase) I bought a tracker instead whilst boning up on structured debt and satisfying myself the assets in an RMBS etc., are not toxic like in the Great Financial Crisis in 2008.
Very educational!

misgesgalore

[ukmtk]

Many thanks midgesgalore.
Most of the answers to the questions were on the first page that they presented to you.
It was a multichoice that you could resit until you got it all correct.

[midgesgalore]

I knew that but was a bit huffed and decided to look more into the fund and what lay beyond the 10% yield on purchase anyway.

My investment portfolio is not all income related and there was a good boost to my purchase of the S & P 500 direction for a spell after being declined the SMIF. Even so the S & P 500 will no doubt sink a little too.

midgesgalore

[Gerry557]

Now this is a bit exotic ......

The Directors of TwentyFour Select Monthly Income Fund Limited have declared that a dividend of 0.5 pence per share will be payable, in line with the Prospectus, representing the regular monthly targeted dividend for the financial period ended 31 March 2024 and an additional dividend of 0.25 pence will be paid as follows:

Ex-Dividend Date 18 April 2024

Record Date 19 April 2024

Payment Date 3 May 2024

Dividend per Share 0.75 pence (Sterling)

Given the ongoing interest rate environment the Directors have given careful consideration to the Company's projected income for the year balanced against their assessment of risks inherent in achieving its target dividend payment of 6 pence per share per annum. Based on this analysis the Directors believe that dividends payable in respect of the year ending 30 September 2024 are likely to be in excess of 6.5 pence per share, and consequently believe it is appropriate to pay an additional 0.25 pence per share, in addition to its regular monthly targeted dividend of 0.5 pence per share, for the period ended 31 March 2024.

The Directors will continue to monitor the position during the remainder of the year ending 30 September 2024 and, where possible to do so, will provide appropriate updates on dividend expectations.


We all like a little bit extra

[moorfield]

Now this is a bit exotic .....

Based on this analysis the Directors believe that dividends payable in respect of the year ending 30 September 2024 are likely to be in excess of 6.5 pence per share

We all like a little bit extra

You've caught some fluffy stuff in your eyes I think...


Of the year ended 30 September 2023
https://www.londonstockexchange.com/new ... s/16255110

Dividends declared for the year of 7.37 pence per share

[Gerry557]

Now this is a bit exotic .....

Based on this analysis the Directors believe that dividends payable in respect of the year ending 30 September 2024 are likely to be in excess of 6.5 pence per share

We all like a little bit extra

You've caught some fluffy stuff in your eyes I think...


Of the year ended 30 September 2023
https://www.londonstockexchange.com/new ... s/16255110

Dividends declared for the year of 7.37 pence per share

The quote was from the recent RNS. I must admit I only noted the increase in May's monthly payment not the yearly total, which you point out is lower than previous highlighted.

I assumed it would be set payments until the adjustment in November, I think from memory unless that fluff is still attached. Is this a change in tactics or just releasing a bit of pressure as they know its rising.

Birds n bushes I suppose.

My spreadsheet has 7.37 against the estimated income so offers an 8.88% yield

[stevensfo]

Sorry for coming to this a bit late, but I thought that I already knew all the news about SMIF.

But I just checked my Excel sheet and I was confusing it with:

Axiom European Financial Debt Fund (AXI) which one day could not be bought in ii, but was okay with AJBell. (PS AXI is now an ex-parrot!)

NB Global Monthly Income Fund (NBMI) which suddenly could not be included in ii regular investment plan. (Now also gone!)

Unfortunately, I didn't make a note of which ones for which I had to take a test. There was definitely one.

Nice to hear that you can re-take the test many times.

Just hope they don't take marks off for poor handwriting or spelling mistakes.

Steve