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What Funds or Trusts could sit in a HYP

General discussions about equity high-yield income strategies
Scooby999
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What Funds or Trusts could sit in a HYP

#115304

Postby Scooby999 » February 2nd, 2018, 7:16 pm

Good evening,

Following on from my last post a month or so ago regarding pension transfer to SIPP I've now completed the paperwork and awaiting availability of funds. When I start purchasing I'll provide an update on what I finally went for.

For now, I have another question.

With the advent of Carillion and current Capita issues it has made me consider funds and trusts too. I have very little knowledge on these for a HYP type portfolio and wondered if anyone would share what funds or trusts they hold and what kind of things they look for when considering for a HYP.

For the record, I have another 23 years to retirement age.

As a side note, I work for Atkins (SNC Lavelin) who were considered a support service, although there was a considerable wobble 15 years or so ago it didn't work out too badly for me. I bought at the low and had a share save scheme too. The dividends weren't too bad either in the end. Atkins was very different to Carillion.

I also know a little about Capita, they operate very successfully in the same field as me (flood risk management), I also know they are recruiting actively in the engineering design type technical areas.

Apologies for eclectic post which may or may not be on the wrong board!



Many thanks and enjoy your evening/weekend.

Scooby

monabri
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Re: What Funds or Trusts could sit in a HYP

#115312

Postby monabri » February 2nd, 2018, 8:01 pm

Hi Scooby999,

Outside of the UK
HYPs are generally confined to the UK market and are our best guesses (!) at individual UK shares ....I would suggest looking at Investment Trusts that will give you investment outside of the UK.

In addition to my UK based HYP, I have started to invest in Henderson Far East Income Limited ("HFEL"). The current yield on HFEL is 5.4% so I class that as "income worthy" and is a quarterly distribution. Personally, I feel as long as it generates the income I don't care that it isn't "only UK" and thus not one would call "HYP". Note - I was looking for yield for income and not a "growth" fund.

The message you'll no doubt get is that "HYP is not a collection of Funds/Trusts". If you want to invest in "collectives" then you would do well to browse through the (Lemon) Investment Trust board.

UK Based
After Carillion (and others) people are getting cold feet when it comes to chosing individual shares. If you want to invest in UK shares and hold this as part of your portfolio, maybe have a look at CTY (City of London - an exemplary record) but the yields is slightly less than 4% so perhaps wait until the FTSE drops more and then add some.

Global
You might also wish to look at a Global Tracker (Vanguard).

I'd also have a browse of this when you start to think about which direction and trusts are worth considering further

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

I would also download a copy of HYPTUSS (the free lemon spreadsheet) as it allows you to assemble a portfolio of both UK shares (eg BP, Unilever etc etc AND you can also select Investment trusts (such as CTY,EDIN..... etc). Then you can play/experiment on setting up your portfolio.


cheers
monabri


viewtopic.php?f=54&t=6911

Dod101
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Re: What Funds or Trusts could sit in a HYP

#115323

Postby Dod101 » February 2nd, 2018, 8:59 pm

I would say that Murray International at around 3.9%, Murray Income at around 4%, Edinburgh IT about the same and maybe Temple Bar. I hold all four as part of my HYP or at least to complement it.

The infrastructure trusts like HICL have been popular to the extent that they have usually traded at a premium to NAV but partly because of the fall out from Carillion, they are now down mostly I think to around par. The other consideration there is Mr Corbyn's threat re PFI.

Dod

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Re: What Funds or Trusts could sit in a HYP

#115334

Postby Raptor » February 2nd, 2018, 10:03 pm

Moderator Message:
As per guidelines, this fits better on strategy as we are discussing funds and ITs. Raptor.

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Re: What Funds or Trusts could sit in a HYP

#115388

Postby Julian » February 3rd, 2018, 9:10 am

Dod101 wrote:I would say that Murray International at around 3.9%, Murray Income at around 4%, Edinburgh IT about the same and maybe Temple Bar. I hold all four as part of my HYP or at least to complement it.

The infrastructure trusts like HICL have been popular to the extent that they have usually traded at a premium to NAV but partly because of the fall out from Carillion, they are now down mostly I think to around par. The other consideration there is Mr Corbyn's threat re PFI.

Dod

I’m interested to see that you don’t have City of London IT (CTY) on your list. I’ve always viewed it as very similar to Edinburgh IT (EDIN), at least after Neil Woodford left, and it has the longest unbroken record of maintained or raised dividends of any U.K. IT I think (over 50 years now?).

CTY is my biggest income IT holding although I do also hold EDIN, mostly bought in the Woodford days when I thought that I might as well see if he lived up to the hype and I didn’t think it worth selling after he left because EDIN is still very solid with a long history of no divi cuts. I also have quite a lot of Murray International (MYI) and, in the same way that a CTY top up is my first thought if I want to add funds to my UK-focused income IT portfolio, a MYI top up is my first thought if wanting to add funds to my more internationally-focussed income IT portfolio. CTY & MYI are the mainstay of my income ITs to sit along my HYP with smaller holdings of various other ones to add a bit of variety e.g. Merchants, Henderson’s Far East, Schroeder’s Oriental Income and a few others.

- Julian

Dod101
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Re: What Funds or Trusts could sit in a HYP

#115389

Postby Dod101 » February 3rd, 2018, 9:24 am

I just never got round to CTY. I have held Edinburgh for about 25 years in deference to my homeland I suppose. It has been through its ups and downs in that time but I have never thought of selling. I think, rather than thinking of the 'Woodford' days, it might be better to see it as the Invesco days because of course it is still managed by them and Mark Barnett is a sort of mini Woodford without the (unjustified?) hype.

I hold other trusts but rather for different exposure than looking for income. As you may have seen I have just bought back into Alliance but certainly not for income even although it too has a record of more than 50 years of unbroken rises.

Dod

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Re: What Funds or Trusts could sit in a HYP

#115417

Postby monabri » February 3rd, 2018, 10:51 am

Fred - why do you say CTY is a "miserable investment" - it's done what it supposed to do for the last 50 years? Is it a case of the total returns have not been great?

ps yield on CTY is 4.1% at the moment (not just under 4% as I suggested above).
Last edited by monabri on February 3rd, 2018, 10:54 am, edited 1 time in total.

monabri
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Re: What Funds or Trusts could sit in a HYP

#115420

Postby monabri » February 3rd, 2018, 10:56 am

fair enough..and I guess with 23 years to retirement then maybe the plan would be to look for growth and to swap out to income based funds closer to retirement.

Dod101
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Re: What Funds or Trusts could sit in a HYP

#115424

Postby Dod101 » February 3rd, 2018, 11:09 am

Were I lucky enough to have 23 years to retirement (some do not consider that time for working to be lucky of course) but if I were young enough to have 23 years to retirement, I would not be buying an income trust because as Fred says or at least implies, they tend to sacrifice capital gains in favour of the god of income. I would be looking at RIT, Caledonia, Finsbury Growth and Income, Witan, Murray International, Templeton Emerging Markets and maybe even Alliance. I might add the odd income trust just to do a comparison, but anyone not contemplating retiring for 23 years should steer clear of say City of London. Apart from anything else, it tends to hold the same UK suspects that many of us hold in a HYP, another reason that I have never held it.

BTW I am not even sure that a HYP is best and certainly not the only investment for one with such a long time horizon.

Dod

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Re: What Funds or Trusts could sit in a HYP

#115441

Postby BrummieDave » February 3rd, 2018, 12:23 pm

If I was 23 years away from retirement, I'd be building a High Growth Portfolio and switching into Income biased investments after about 20 of the years. In that context, I'd steer clear of RIT (too conservative for that timeframe IMHO) and even Murray International (which I view as an income biased IT, yielding 4%, and which I hold for that purpose), and look at the more growth focused funds like Scottish Mortgage (SMT), and F&C IT (FRCL). Both would give global coverage and share a mandate to grow in TR terms, more so than other ITs mentioned above.

That said, I respect that the OP was asking about HYP but perhaps it's the wrong question. Tin hat is on.

And as the OP also asks about Funds, dare I mention Vanguard Lifestrategy? With 23 years to go, it's also something to be considered perhaps, even VLS 100% Equity.

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Re: What Funds or Trusts could sit in a HYP

#115448

Postby monabri » February 3rd, 2018, 12:52 pm

It was the reference to "HYP" in the opening post. As Brummie Dave says..maybe it was the original question?

I think we're in accord here as to the strategy with a 23 year timeframe. If the fund(s) were to do well, there might be flexibility to be financially independent / retire early.

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Re: What Funds or Trusts could sit in a HYP

#115450

Postby Dod101 » February 3rd, 2018, 12:58 pm

FredBloggs wrote:@Dod, there appears to be an echo in here in here.

I agree with you, agree with you.


I do not seem to be the only one with this affliction, that is of not knowing if something has actually been posted and then giving the button another tick just in case, but I find this quite troublesome. Does anyone else have this same problem?

Dod

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Re: What Funds or Trusts could sit in a HYP

#115452

Postby Dod101 » February 3rd, 2018, 1:03 pm

Yup I forgot Scottish Mortgage which I also hold but we are now a long way from an income trust if that is what the OP was indeed asking about. We got sidetracked by the '23 years to retirement' post.

I will stick with my post 115323 of yesterday for income trusts.

Dod

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Re: What Funds or Trusts could sit in a HYP

#115461

Postby BrummieDave » February 3rd, 2018, 1:26 pm

And I would agree with you for income Trusts.

I just wouldn't be investing in income trusts 23 years out.

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Re: What Funds or Trusts could sit in a HYP

#115817

Postby Gengulphus » February 5th, 2018, 11:38 am

Dod101 wrote:I do not seem to be the only one with this affliction, that is of not knowing if something has actually been posted and then giving the button another tick just in case, but I find this quite troublesome. Does anyone else have this same problem?

I certainly do. The solution is not to give another click just in case, but instead to open another browser window/tab and look at the thread in it: if it doesn't have my post in it, then give another click in the original window/tab.

Must admit though that I don't always remember to apply that solution! But if I realise a bit too late that I've forgotten, I can still delete the duplicate myself, and if I miss the 15-minute window for doing that, I can still report the duplicate, saying something like "Please delete this unintended duplicate post".

Gengulphus

Scooby999
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Re: What Funds or Trusts could sit in a HYP

#116036

Postby Scooby999 » February 6th, 2018, 9:27 am

Thank you for your time to respond,

My title was probably misleading, for which I apologise. Perhaps I should have asked what funds/trusts would sit alongside a HYP as a combined strategy for developing a pension pot.

I'm comfortable with the HYP approach, but not for 100% of my available pot of money to invest today. The funds would sit alongside and give exposure to other geographical areas such as Asia and N. America, particularly as the HYP will be predominantly ftse100 conpanies.

Varied comments have questioned the income approach compared to growth, particularly with 23 years to go. I agree on reflection, I'll look for growth based funds or similar that can compliment the HYP.

Having 100% of my pot in 15, or so, seperate companies makes me slightly uncomfortable, having that geographic and growth based spread gives me more comfort.

I pay particular note to the comment regarding income funds may chase immediate yield rather than long term security, Capita being a fine example!


Many thanks
Scooby

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Re: What Funds or Trusts could sit in a HYP

#116101

Postby Quint » February 6th, 2018, 12:16 pm

If you are happy to hold OEIC's in the building phase take a look at Fundsmith Equity and Lindsell Train Global Equity.

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Re: What Funds or Trusts could sit in a HYP

#116110

Postby kempiejon » February 6th, 2018, 12:50 pm

There was a neat thread viewtopic.php?f=55&t=3743 replicating the vanguard world tracker VWRL with a handful of separate area trackers, Emerging, UK, Europe, Japan,Pacific, USA. Buying those but leaving the FTSE out of it would give you a more global exposure. I think the UK accounts for less than 10% of the world market so even picking international UK shares leaves some imbalance and holes. As you say a HYP is an income strategy and those other ETFs could capture growth as well, charges are low for the vanguard stable.

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Re: What Funds or Trusts could sit in a HYP

#118494

Postby Charlottesquare » February 16th, 2018, 12:29 am

These are mine with current div yields if I have managed the cut and paste correctly. They are not equal holdings and they attempt to give exposure
mainly outwith the UK or in niche fields. The odd one is not actually an IT but I treat as being given their investment characteristics. A fair few do not qualify re income, Jupiter having a 0% yield and a few are low, though some because they have done very well re capital values. Melded yield currently 3.83% with capital growth of 9.57% mainly since circa latter half of 2016 as I changed approach pre the Brexit vote in June that year.

My high yield UK shares currently yield 5.45% with capital growth of 1.63% (thanks Imperial and Glaxo for the capital losses)

- Sorry about the formatting.

3i Group 2.97%

Aberdeen Asian Fund 4.50%
Athelney Trust 3.44%

BlackRock Frontiers IT 3.10%


Blackrock world Mining 5.23%


Bluefield Solar IT 6.50%


City of London IT 4.22%

Fidelity China Special Situation 1.05%

Greencoat UK Wind 5.43%

Henderson Far East Income 5.74%

Invesco Perpetual Smaller Cos 3.54%

J P Morgan Emerge Marrkets 1.24%

JP Morgan Indian Invest Trust 0.00%

Middlefield Canadian Income 5.26%

Murray International 4.06%

North American Income Trust 2.94%

Scot American Trust 3.13%

Standard Life Invests Prop Inc 5.12%

The Renewables Infrastructure Group 6.25%

Utilico Emerging Markets 3.15%

Utilico Emerge Sub Shares 0.00%


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