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Income IT’s v HYP – 5 years on

General discussions about equity high-yield income strategies
funduffer
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Re: Income IT’s v HYP – 5 years on

#218906

Postby funduffer » May 2nd, 2019, 10:39 am

kempiejon wrote:I hold both those ITs but buying today with a lump sum for Auntie Doris I'd be just as happy to suggest slinging it into a FTSE100 tracker/ETF yielding about the same as the 4.3% offered by that pair. Last time I looked at a graph I noticed that CTY hadn't outdone that index TR until about 10 years in.


You are right that investing in a tracker (income version) would achieve much the same result, but MYI adds an overseas diversification that the FTSE does not, despite the latter being dominated by companies generating large revenues overseas.

Maybe a combination of FTSE tracker + MYI is an alternative (slightly lower cost) approach, to CTY + MYI.

Thanks for the observation - it made me think!

FD

kempiejon
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Re: Income IT’s v HYP – 5 years on

#218924

Postby kempiejon » May 2nd, 2019, 11:25 am

FD it came as a bit of a surprise to me when I noticed that CTY didn't beat a FTSE tracker in recent past - what are we paying for?
Of course the FTSE100 yield is probably above average these days so in previous periods those seeking income would have been better off with the IT.

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Re: Income IT’s v HYP – 5 years on

#218973

Postby Arborbridge » May 2nd, 2019, 2:18 pm

CTY is well known (and criticised for being) a closet tracker - and it certainly received some stick recently for underperformance. However, I guess one is paying for out performance in the long term and, given that CTY yield is on average greater than the FTSE, additional income. If the income is greater, I would not assume that the capital gain could be as great as a FTSE tracker, but they don't do too badly if this chart is correct:

Image

Share price (without reinvestment) versus FTSE100

Gadgeisbackagain
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Re: Income IT’s v HYP – 5 years on

#225581

Postby Gadgeisbackagain » May 30th, 2019, 5:25 pm

Hi Guys

Can I just ask what the result to date is in total return.

Which is winning with growth and divs paid included?

Apologies if this is in the info above already.

Gadge

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Re: Income IT’s v HYP – 5 years on

#225586

Postby Alaric » May 30th, 2019, 5:36 pm

Gadgeisbackagain wrote:Can I just ask what the result to date is in total return.


According to morningstar, annualised total return over 5 years 5.37% for price and 5.42% for NAV

http://tools.morningstar.co.uk/uk/cefre ... e0gbr00qxa

FTSE 100 for comparison 4.96%

http://tools.morningstar.co.uk/uk/stock ... E%24%24ALL

Not much in it, but CTY has done enough to overcome the disadvantage of charges.

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Re: Income IT’s v HYP – 5 years on

#230401

Postby Gadgeisbackagain » June 18th, 2019, 11:28 am

Thanks for that reply but I actually meant the total return of the HYP versus the IT.

Gadge

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Re: Income IT’s v HYP – 5 years on

#230656

Postby funduffer » June 19th, 2019, 8:58 am

Gadgeisbackagain wrote:Thanks for that reply but I actually meant the total return of the HYP versus the IT.

Gadge

Hi Gadge,

If you are referring to the OP I posted, then the TR after 5 years for the HYP is 25% and for the IT's it is 34%.

In case of any doubt, bearing in mind some (but not all) dividends have been withdrawn and spent, TR is defined as:

TR = (Capital Value + Dividends withdrawn - Capital invested) / Capital Invested

FD


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