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An alternative to UK bank shares?

General discussions about equity high-yield income strategies
flyer61
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Re: An alternative to UK bank shares?

#337117

Postby flyer61 » August 31st, 2020, 11:08 am

Just the two banks in my portfolio Handelsbanken (I business bank with them) and Bank of Montreal (thank you Salvor!). Both in my forever SIPP.

Handelsbanken are not paying a dividend presently but given the fees I pay it shouldn't be to much longer before they resume :lol:

Maybe there will be a time to dip into UK banks but I cannot see it. The UK banks seem to be extensions of Government, possibly part of the DSS. They are certainly not run for shareholders benefit. In fact large swaithes of UK listed Companies do not seem to be run for shareholders benefit. Anything to do with Banks, finance, insurance....great if you are a director, employee but shareholder....nah.

Dod101
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Re: An alternative to UK bank shares?

#337122

Postby Dod101 » August 31st, 2020, 11:16 am

flyer61 wrote:Just the two banks in my portfolio Handelsbanken (I business bank with them) and Bank of Montreal (thank you Salvor!). Both in my forever SIPP.

Handelsbanken are not paying a dividend presently but given the fees I pay it shouldn't be to much longer before they resume :lol:

Maybe there will be a time to dip into UK banks but I cannot see it. The UK banks seem to be extensions of Government, possibly part of the DSS. They are certainly not run for shareholders benefit. In fact large swaithes of UK listed Companies do not seem to be run for shareholders benefit. Anything to do with Banks, finance, insurance....great if you are a director, employee but shareholder....nah.


Re UK banks I agree with you, but insurers for instance have mostly continued paying their dividends. Shares such as Admiral, Direct Line, Legal & General, Phoenix Holdings, Schroders, HL and others have as far as I know continued to pay dividends throughout the Covid crisis. In most cases they have actually increased their dividends.

Dod

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Re: An alternative to UK bank shares?

#342508

Postby Maylix » September 24th, 2020, 12:59 pm

Wizard wrote:I checked with Hargreaves Lansdown, where my SIPP is, with a W-8BEN in place the withholding tax on Canadian shares if held in a SIPP is 15%. Any expected income would have to be reduced accordingly. I think that would make the current yield on offer to a UK investor holding in a SIPP with a W-8BEN in place about 5.8%.


Hey Wizard, FYI I just bought some Canadian Bank Sharesfor the first time in my SIPP with AJBell YouInvest. When I queried them about Canadian witholding tax, this is what they replied:

The form which reduces Canadian witholding tax is in fact a NR_301.
However, A NR_301 form is not required for CA investments held within a SIPP as the CRA (Canadian Revenue Agency) recognises our
SIPP as a qualifying pension scheme and all qualifying CA dividends and interest are automatically paid to you free of any withholding
tax.

Might be worth you asking HL some more questions...

HTH
MAylix

Wizard
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Re: An alternative to UK bank shares?

#342541

Postby Wizard » September 24th, 2020, 2:51 pm

Maylix wrote:
Wizard wrote:I checked with Hargreaves Lansdown, where my SIPP is, with a W-8BEN in place the withholding tax on Canadian shares if held in a SIPP is 15%. Any expected income would have to be reduced accordingly. I think that would make the current yield on offer to a UK investor holding in a SIPP with a W-8BEN in place about 5.8%.


Hey Wizard, FYI I just bought some Canadian Bank Sharesfor the first time in my SIPP with AJBell YouInvest. When I queried them about Canadian witholding tax, this is what they replied:

The form which reduces Canadian witholding tax is in fact a NR_301.
However, A NR_301 form is not required for CA investments held within a SIPP as the CRA (Canadian Revenue Agency) recognises our
SIPP as a qualifying pension scheme and all qualifying CA dividends and interest are automatically paid to you free of any withholding
tax.

Might be worth you asking HL some more questions...

HTH
MAylix

That is really helpful, many thanks.

dundas666
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Re: An alternative to UK bank shares?

#377835

Postby dundas666 » January 16th, 2021, 4:31 pm

GrahamPlatt wrote:Well, despite posting mischievously & tongue in cheek above, I had a look at the Strathbridge fund... trading at ~ NAV at a current $C 6.89, but MCP only £4.11m. Hardly HYP material, but interesting all the same to some.


Sorry not sure what you mean by MCP of only £4.11m? Is that market price?

Canadian banks and insurance company share prices have gone up in the last few months, so Strathbridge's "Top 10 Canadian Financial Trust" closed-end investment trust now has a NAV of $C 8.05, market price of C$ 7.80 and a yield of 7.49%, yet most individual shares seem to have a yield of between 4 to 5%. Management charge of 1.1% and service charge of 0.3%.

Can't see much of a downside to this in a SIPP because there's no withholding tax. Can anyone see a reason NOT to invest in this IT instead of buying the individual shares? Thanks.

GrahamPlatt
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Re: An alternative to UK bank shares?

#377846

Postby GrahamPlatt » January 16th, 2021, 4:58 pm

dundas666 wrote:
GrahamPlatt wrote:Well, despite posting mischievously & tongue in cheek above, I had a look at the Strathbridge fund... trading at ~ NAV at a current $C 6.89, but MCP only £4.11m. Hardly HYP material, but interesting all the same to some.


Sorry not sure what you mean by MCP of only £4.11m? Is that market price?

Canadian banks and insurance company share prices have gone up in the last few months, so Strathbridge's "Top 10 Canadian Financial Trust" closed-end investment trust now has a NAV of $C 8.05, market price of C$ 7.80 and a yield of 7.49%, yet most individual shares seem to have a yield of between 4 to 5%. Management charge of 1.1% and service charge of 0.3%.

Can't see much of a downside to this in a SIPP because there's no withholding tax. Can anyone see a reason NOT to invest in this IT instead of buying the individual shares? Thanks.


MCP is the Market Capitalisation - SP x number of shares in issue. i.e. the “total market value” of the company. Having gone up a bit since I last posted, it’s now £4.76m - microcap. HYP investors usually use a cut-off MCP in the region of £1bn.

dundas666
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Re: An alternative to UK bank shares?

#377849

Postby dundas666 » January 16th, 2021, 5:09 pm

GrahamPlatt wrote:
dundas666 wrote:
GrahamPlatt wrote:Well, despite posting mischievously & tongue in cheek above, I had a look at the Strathbridge fund... trading at ~ NAV at a current $C 6.89, but MCP only £4.11m. Hardly HYP material, but interesting all the same to some.


Sorry not sure what you mean by MCP of only £4.11m? Is that market price?

Canadian banks and insurance company share prices have gone up in the last few months, so Strathbridge's "Top 10 Canadian Financial Trust" closed-end investment trust now has a NAV of $C 8.05, market price of C$ 7.80 and a yield of 7.49%, yet most individual shares seem to have a yield of between 4 to 5%. Management charge of 1.1% and service charge of 0.3%.

Can't see much of a downside to this in a SIPP because there's no withholding tax. Can anyone see a reason NOT to invest in this IT instead of buying the individual shares? Thanks.


MCP is the Market Capitalisation - SP x number of shares in issue. i.e. the “total market value” of the company. Having gone up a bit since I last posted, it’s now £4.76m - microcap. HYP investors usually use a cut-off MCP in the region of £1bn.


Ah yes I see now - many thanks.

However it's not like I'd be investing directly in a single micro-cap company, as it's an IT so its assets are the underlying constituent investments which in this case are the big Canadian financials.

Unless there are other risks with a small IT, for example liquidity or a large bid/offer spread? I'd be investing on a long term buy and hold basis though, and happy just to bank the quarterly dividends.


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