The Lemon Fool

Now that I'm adding less new money to my HYP (but still reinvesting all dividends) I'm being less Dorisian and taking more notice when shares grow to become too large a proportion of my portfolio. I worried less when I was adding a significant % of new money as that would generally bring the larger shareholdings back in line within a year or two.

So for the second time SEGRO has broken through the 2x median value (its sitting at 6.75% and the 2x median value is 5.0%) so I'm tempted to sell 25% on the next cheap dealing day and reinvest in a higher yielding share. Possible replacements are a top up of BLND which is just above median, or a new purchase of Land Sec, which would keep the money in the property sector, but increase the yield (and spread the risk).

Alternatively I could move it away from the UK into an ETF (which would be VHYL or VWRL) (hence I've posted in strategies not practical)

or I could look at HYTUSS which has GFRD at #1; WMH at #2; VOD at #3; PFC and DC. at #4=; S32 at #6; MKS at #7; RBS at #8 Av. at #9 and BT.A at #10

Of those I might be willing to buy the financials (but I prefer Lloyds to RBS which only shows up as it is such a low value holding in my HYP), S32, PFC and BT.

Thoughts?

Segro is a very different animal from either British Land or Land Securities, and so although they are all property I would certainly not regard them as inter changeable. Top slice Segro but I would look for something else altogether.

Your Hyptuss lot (those that I recognise from the codes anyway) are not exactly top of my picks either. If you can assume that those cutters will cut no more you could of course top up say Vodafone but I do not think they are out of the woods yet.

I would go for your ETF.

Dod

A suggestion for income - Merchants IT (current yield 5.4%) or Henderson Far East IT (6.1%).

If you are considering ITs, then either of monabri's suggestions seem good to me.

Dod

Dod101 wrote:If you are considering ITs, then either of monabri's suggestions seem good to me.

Dod

I wasn't but perhaps I should be. I have IAPD (High yield Asia/Pacific ETF) so not sure HFEL is appropriate (ie I already have that region covered) though I have thought of adding HFEL in the past. Will have a look and compare with IAPD as an alternative to topping up IAPD. Will also have a look at Merchants

I am looking for a home from top slicing Unilever. I currently hold HFEL and like its yield and area of investment. Merchants has a good yield enhanced by the fact that it got rid of some very expensive borrowings in the last few years and is now attractive I think. My problem with it is that it is UK focussed and I already am with individual shares and also via Edinburgh IT. In fact I might switch Edinburgh for Merchants for the higher yield.

Maybe worth your while considering either or both.

Dod

daveh wrote:

Dod101 wrote:If you are considering ITs, then either of monabri's suggestions seem good to me.

Dod

I wasn't but perhaps I should be. I have IAPD (High yield Asia/Pacific ETF) so not sure HFEL is appropriate (ie I already have that region covered) though I have thought of adding HFEL in the past. Will have a look and compare with IAPD as an alternative to topping up IAPD. Will also have a look at Merchants

I just had a look at Merchants and got this info from HL and pardon me, but why would this be attractive despite it's yield of 5.44%? Am I missing something here? Past performance not etc etc.........

PERFORMANCE
1 week - 0%
1 month down 1.62%
3 months up 1.04%
6 months up 3.29%
1 year down 9.83%
2 years down 0.31%
3 years up 23.19%
5 years down 4.14%

Well the fact is that you need to accept that it is a UK centric income trust. On that basis it has not done badly. The 5 year record is not much help because during much of that time, it had the expensive borrowings in place. For the last year to be down only 9.83% given its remit seems OK by me.

I am not defending it particularly but it depends what you are looking for.

Dod

EssDeeAitch wrote:I just had a look at Merchants and got this info from HL and pardon me, but why would this be attractive despite it's yield of 5.44%? Am I missing something here? Past performance not etc etc.........
PERFORMANCE
1 week - 0%
1 month down 1.62%
3 months up 1.04%
6 months up 3.29%
1 year down 9.83%
2 years down 0.31%
3 years up 23.19%
5 years down 4.14%

It might be worth checking this but from HL, they say

https://www.hl.co.uk/help/funds-shares- ... ce-figures

"Are dividends included in performance figures?

"The majority of indices are calculated without factoring in dividends or income payments from an investment. ETPs however are entitled to dividends and performance figures generally include dividends."

( ETP exchange traded product).

Bearing in mind the board we are on and the OP was considering relinquishing Segro and the choices being considered (GFRD, VOD, etc...ie "High yield"), the suggestion of a highish yield IT as a possibility was put forward.

Hence, the overall performance might be acceptable.

edit. I just noticed this under the performance table

"Performance figures are based on the previous close price. "

Which also suggests that only the sp is being used to determine "performance ".

monabri wrote:

EssDeeAitch wrote:I just had a look at Merchants and got this info from HL and pardon me, but why would this be attractive despite it's yield of 5.44%? Am I missing something here? Past performance not etc etc.........
PERFORMANCE
1 week - 0%
1 month down 1.62%
3 months up 1.04%
6 months up 3.29%
1 year down 9.83%
2 years down 0.31%
3 years up 23.19%
5 years down 4.14%

It might be worth checking this but from HL, they say

https://www.hl.co.uk/help/funds-shares- ... ce-figures

"Are dividends included in performance figures?

"The majority of indices are calculated without factoring in dividends or income payments from an investment. ETPs however are entitled to dividends and performance figures generally include dividends."

( ETP exchange traded product).

Bearing in mind the board we are on and the OP was considering relinquishing Segro and the choices being considered (GFRD, VOD, etc...ie "High yield"), the suggestion of a highish yield IT as a possibility was put forward.

Hence, the overall performance might be acceptable.

edit. I just noticed this under the performance table

"Performance figures are based on the previous close price. "

Which also suggests that only the sp is being used to determine "performance ".

That will make ansignificant difference. Thanks for pointing it out.

EssDeeAitch wrote:That will make ansignificant difference. Thanks for pointing it out.

It may or may not make a significant difference. It depends entirely on how or if they control any discount/premium. Anyway you can only sell on the share price not the NAV so that is what tends to matter.

Dod

Dod101 wrote:

EssDeeAitch wrote:That will make ansignificant difference. Thanks for pointing it out.

It may or may not make a significant difference. It depends entirely on how or if they control any discount/premium. Anyway you can only sell on the share price not the NAV so that is what tends to matter.

Dod

I have just fired off an email to Merchants asking them to confirm total returns for 1,2,5 and 10 years. I will post their reply.

It'll be interesting to compare their answer to the total return figures here:-

https://citywire.co.uk/investment_trust ... undID=3093

Maybe this is useful from Allianz themselves:-

https://www.merchantstrust.co.uk/Portfo ... erformance

Back to my original question.

HFEL is definitely a possibility, but Merchants is out as at the moment I'm sticking to buying individual HY shares for the Uk component of my HYP. Also on another thread it was noted that Merchants has a high % invested in financials (20+%) which would not go well with my own individual share picks where I am already up to 14% in financials.


So I'm looking at high yield ITs or ETFs for non UK investments hence the thoughts about VHYL. The other area I'm missing is North America, but this has always seemed rather overvalued, but I do seem to have missed a lot of possible gains by staying out of the USA. I already have IAPD, IDVY and EMDV, though the latter hasn't done very well on the dividend sustainability front.

When I bought into HFEL in Sept 17, I was attracted by (i) the yield on offer, (ii) the increasing dividend & (iii) the geographical spread of holdings.

Based on the research from the link below, HFEL contained a reasonably high percentage of holdings in countries that were deemed to be "undervalued" in terms of price/book and Shiller-CAPE (figure 6 in the link).

https://www.starcapital.de/en/footernav ... -charts%2F

The rationale (at the time) was that there was a good income on offer with a potential for growth (hence further dividend increases and maybe some capital increases alongside). Of course, this was before the US/Sino trade wars kicked off ....

daveh wrote:So I'm looking at high yield ITs or ETFs for non UK investments hence the thoughts about VHYL. The other area I'm missing is North America, but this has always seemed rather overvalued, but I do seem to have missed a lot of possible gains by staying out of the USA.

For North America, you could use BRNA BlackRock North American Income IT which has a yield of 4.5% and a decent growth record of 100% total return over 5 years.

https://www.theaic.co.uk/companydata/C912N

For an ETF, Vanguard have VUSA which tracks the S&P 500 with a more natural yield of 1.6% and a fair growth record of 70% total return over 5 years.

https://www.vanguardinvestor.co.uk/investments/vanguard-s-and-p-500-ucits-etf-usd-distributing?intcmpgn=equityusa_sp500ucitsetf_fund_link

I hold both.

Tramrider