The only way is up?

[Jwdool]

Meanwhile, for those thinking the only way is up, the 30 year dropped like a stone this last few days.
On the upside, you can now get ~5% - which has to be attractive for long term, risk averse holders (with a view to holding long term to maturity).

[Laughton]

Press speculation of "at least two" parties mulling over takeover of Aviva.

https://www.reuters.com/markets/deals/a ... 023-10-06/

Thoughts on possible ramifications for their various prefs (AV.A, GACA etc.etc) given that many holders were probably feeling confident that management wouldn't try to tender at below fair price given what happened when they last tried.

But will a possible new owner feel in anyway obligated especially as they could well be foreign?

[88V8]

Press speculation of "at least two" parties mulling over takeover of Aviva.
Thoughts on possible ramifications for their various prefs (AV.A, GACA etc.etc) given that many holders were probably feeling confident that management wouldn't try to tender at below fair price given what happened when they last tried.
But will a possible new owner feel in anyway obligated especially as they could well be foreign?

Imagine the FCA would have something to say about it.
But the point is well made.

V8

[88V8]

Meanwhile, for those thinking the only way is up, the 30 year dropped like a stone this last few days.
On the upside, you can now get ~5% - which has to be attractive for long term, risk averse holders (with a view to holding long term to maturity).

And with so much availability, the favourite Prefs have all ticked down again, almost as if more rate rises are expected which is surely unlikely now.
Yields >7% back on the table, even NWBD.
The only way is up, but not just yet.
Still buying....

V8

[monabri]

I may start nibbling at TLT if it goes below 90.

Well, that didn't take long for your wish to be granted!

I'm not sure how to buy TLT...not available on iWeb nor Interactive Investor (and not HL by the look of it).

https://www.ishares.com/us/products/239 ... y-bond-etf

[simoan]

Well, that didn't take long for your wish to be granted!

I'm not sure how to buy TLT...not available on iWeb nor Interactive Investor (and not HL by the look of it).

https://www.ishares.com/us/products/239 ... y-bond-etf

You need to find the equivalent UK listed ETF. There’s a GBP hedged version (ticker IDTG) that should be available on UK platforms.

[Tanglefoot]

Meanwhile, for those thinking the only way is up, the 30 year dropped like a stone this last few days.
On the upside, you can now get ~5% - which has to be attractive for long term, risk averse holders (with a view to holding long term to maturity).

And with so much availability, the favourite Prefs have all ticked down again, almost as if more rate rises are expected which is surely unlikely now.
Yields >7% back on the table, even NWBD.
The only way is up, but not just yet.
Still buying....

V8

Well, markets are expecting rates to tick up a little bit more, the really interesting thing to me is to see LR rates flatten out just above 4%, that is a regime change from anything I've ever lived through!

[88V8]

And with so much availability, the favourite Prefs have all ticked down again, almost as if more rate rises are expected which is surely unlikely now.

Well, markets are expecting rates to tick up a little bit more, the really interesting thing to me is to see LR rates flatten out just above 4%, that is a regime change from anything I've ever lived through!

Yes. I remember the interest rates of the 70s, but from the pov of a mortgage payer, not an investor.

As commented in the article linked here...

Everyone who has come into the business since 1980 – in other words, the vast majority of today’s investors – has, with relatively few exceptions, only seen interest rates that were either declining or ultra-low (or both).

We are indeed living in different times.

V8

[NotSure]

Meanwhile, for those thinking the only way is up, the 30 year dropped like a stone this last few days.
On the upside, you can now get ~5% - which has to be attractive for long term, risk averse holders (with a view to holding long term to maturity).

It's a bit financial for TLF ( /s ), but article here that may interest you about the mathematics of 30 year bonds (US, but maths is the same).

https://www.marketwatch.com/story/bond-math-shows-traders-bold-enough-to-bet-on-treasurys-could-reap-dazzling-returns-with-little-risk-7aa1525c?mod=home-page

...Asymmetric returns
In a post following a Bloomberg News story from earlier this week, Rich Falk-Wallace, the CEO and founder of Arcana and a former portfolio manager at Citadel, offered an explanation about how the relationship between bond yields and bond prices leads to the prospect of “asymmetric” returns.

That is, investors will profit more from a 50 basis point drop in yields than they would lose from a 50 basis point rise. Bond yields move inversely to prices.

In a spreadsheet shared with MarketWatch, Falk-Wallace calculated what these theoretical returns might be for a 30-year bond with a 5% coupon.

According to his calculations, a 50 basis point decline in the yield on such a Treasury bond would result in a total return of 13%, while the opposite would lead to investors brooking a loss of 2.6%....

[BullDog]

I have been mulling this topic over. Whilst I don't wish to let an opportunity pass me by as the interest rate cycle turns, I don't know enough to make decisions about buying into fixed interest securities for a medium term hold. I don't really need the income from an FI investment so price appreciation and some income would be appreciated. Given I'm not confident enough to make decisions I'm wondering if Capital Gearing Trust is worth thinking about buying? It's presently big on FI and it's price has fallen significantly from year highs. Basically, sub contract my decisions about that part of my portfolio to CGT. I don't have any FI investment at all presently. Thinking of maybe 5 to 10% allocation in ISA/SIPP with a medium term outlook.

Makes sense? Thanks.

[richfool]

I have been mulling this topic over. Whilst I don't wish to let an opportunity pass me by as the interest rate cycle turns, I don't know enough to make decisions about buying into fixed interest securities for a medium term hold. I don't really need the income from an FI investment so price appreciation and some income would be appreciated. Given I'm not confident enough to make decisions I'm wondering if Capital Gearing Trust is worth thinking about buying? It's presently big on FI and it's price has fallen significantly from year highs. Basically, sub contract my decisions about that part of my portfolio to CGT. I don't have any FI investment at all presently. Thinking of maybe 5 to 10% allocation in ISA/SIPP with a medium term outlook.

Makes sense? Thanks.

Bulldog, noting there has been no response to your above post (and being in a similar situation myself in terms of lack of knowledge), I wondered whether this thread might be of interest to you, particularly the latter part where I have been having dialogue with "thebarns": viewtopic.php?p=625572#p625572

I have to say I've been put off the supposed Wealth Preservers because of their performance (or lack of both performance and defensiveness) over the last couple of years, but I do take your point that they should know about fixed interest.

[richfool]

I have been mulling this topic over. Whilst I don't wish to let an opportunity pass me by as the interest rate cycle turns, I don't know enough to make decisions about buying into fixed interest securities for a medium term hold. I don't really need the income from an FI investment so price appreciation and some income would be appreciated. Given I'm not confident enough to make decisions I'm wondering if Capital Gearing Trust is worth thinking about buying? It's presently big on FI and it's price has fallen significantly from year highs. Basically, sub contract my decisions about that part of my portfolio to CGT. I don't have any FI investment at all presently. Thinking of maybe 5 to 10% allocation in ISA/SIPP with a medium term outlook.

Makes sense? Thanks.

FYI BullDog, the latest factsheet for Capital Gearing trust, showing relevant holdings including FI.

https://www.capitalgearingtrust.com/doc ... ober-2023/

[88V8]

I have been mulling this topic over. Whilst I don't wish to let an opportunity pass me by as the interest rate cycle turns, ...

Bulldog, noting there has been no response to your above post (and being in a similar situation myself in terms of lack of knowledge), I wondered whether this thread might be of interest to you, particularly the latter part where I have been having dialogue with "thebarns": viewtopic.php?p=625572#p625572
I have to say I've been put off the supposed Wealth Preservers because of their performance (or lack of both performance and defensiveness) over the last couple of years, but I do take your point that they should know about fixed interest.

CGT being bond-heavy has suffered a decline in NAV, along with other bond funds. And like funds such as BIPS, SHRS, NCYF, SMIF, this should be a good time to buy in with expectation of NAV increase.
CGT previously looked like a 'wealth preserver' because with years of rates steadily falling and bond SPs rising, it was all very easy.

Personally, I think the four aforementioned may do just as well, and with far better dividends than CGT. I hold all four, accounting for c8% of our portfolio.

V8

[richfool]

Bulldog, noting there has been no response to your above post (and being in a similar situation myself in terms of lack of knowledge), I wondered whether this thread might be of interest to you, particularly the latter part where I have been having dialogue with "thebarns": viewtopic.php?p=625572#p625572
I have to say I've been put off the supposed Wealth Preservers because of their performance (or lack of both performance and defensiveness) over the last couple of years, but I do take your point that they should know about fixed interest.

CGT being bond-heavy has suffered a decline in NAV, along with other bond funds. And like funds such as BIPS, SHRS, NCYF, SMIF, this should be a good time to buy in with expectation of NAV increase.
CGT previously looked like a 'wealth preserver' because with years of rates steadily falling and bond SPs rising, it was all very easy.

Personally, I think the four aforementioned may do just as well, and with far better dividends than CGT. I hold all four, accounting for c8% of our portfolio.

V8

V8, thanks for your thoughts on CGT and particularly bonds.

I'm not knowledgeable on bonds, however I do hold NCYF which I topped up again yesterday.

Otherwise, I have recently added ETF holdings in: VAGP and IHHG. The former tracks global bonds (aggregate), - government and some corporate bonds. The latter tracks corporate bonds, mainly in the US.

I was just reading an article on the internet, suggesting that IGLH might be a better vehicle than VAGP, as IGLH focuses solely on government bonds and would thus provide better protection in the event of a fall in equities, though understandably yields reflect that fact.

IGLH:-
https://www.hl.co.uk/shares/shares-sear ... ts-etf-gbp