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Which general IT to choose?

Closed-end funds and OEICs
LooseCannon101
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Re: Which general IT to choose?

#262126

Postby LooseCannon101 » November 4th, 2019, 9:13 pm

I only hold F&C Investment Trust, starting around 20 years ago. The current director, Simon Fraser, said at the AGM a few years ago that its predominant characteristic is that it is 'One-Stop Shop'. I agree wholeheartedly.

Looking under the bonnet you will find a highly diversified world equity portfolio(450 companies) including some private equity and moderate gearing e.g. 10%. Their ISA savings plan is also cheap - £72 per annum

Any investment trust should be bought for the long term e.g. 10 years+, with a great deal of care taken in choosing the right one(s).

DavidM13
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Re: Which general IT to choose?

#262178

Postby DavidM13 » November 5th, 2019, 8:33 am

bluedonkey wrote:It's all a little bit unclear.

The dividend cover figure of 0.79 came from the AIC website. This doesn't appear to cross check with either Dod's or mc2fool's definition. I'm stumped.

Specials: the dividends paid out by the IT in y/e 31.8.19 are consistent with previous years, allowing for some growth. It appears that the IT hasn't allowed the specials to flow through to dividend payouts therefore, and yet they are required by law to distribute at least 85% I'm told. Perhaps specials are excluded from the definition though I doubt that the legal requirement is that subtle.

Curiouser and curiouser. But yes,I would like to relax and enjoy the dividends!


I can confirm that special dividends are excluded from the following calculations on the AIC site

1) 5y dividend growth rate
2) Dividend yield
3) Dividend cover (years)

Special dividends do of course form part of any price and NAV total return calculations.

Hope this helps.

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Re: Which general IT to choose?

#262221

Postby Avantegarde » November 5th, 2019, 10:14 am

Any such IT should be better than investing in a cheap world tracker of some sort. By way of example, the 5-year total return on F&C and Bankers has been 97% and 91% respectively. Henderson International Income and Murray International have returned 75% and 44% respectively. By contrast, the L&G International Index tracker (which tracks a world index excluding the UK) has returned 84% in the past five years. So some general ITs have be a better investment than a tracker and some (many) have not. To add a bit more to the picture, the 5-year total return for City and Merchants has been comparatively rotten at 40% and 39% respectively.

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Re: Which general IT to choose?

#262252

Postby richfool » November 5th, 2019, 11:37 am

Avantegarde wrote:Any such IT should be better than investing in a cheap world tracker of some sort. By way of example, the 5-year total return on F&C and Bankers has been 97% and 91% respectively. Henderson International Income and Murray International have returned 75% and 44% respectively. By contrast, the L&G International Index tracker (which tracks a world index excluding the UK) has returned 84% in the past five years. So some general ITs have be a better investment than a tracker and some (many) have not. To add a bit more to the picture, the 5-year total return for City and Merchants has been comparatively rotten at 40% and 39% respectively.

It's important to be sure, or at least aware whether you are comparing like with like (i.e. being careful that you aren't comparing apples with bananas scenario). (You are comparing the tracker with IT's in two different sectors).

Although noted you are looking at total return, it should be borne in mind, in the above examples, that F&C (FCIT) (1.5% yield) and Bankers (2.09% yield) are in the Global Growth sector, targeting growth more than income, and so have low yields. Whereas HINT and MYI are in the Global Growth & Income sector and thus pay higher dividend yields, - HINT (3.37% yield) and MYI (4.18% yield). Some investors may prefer to have the dividend income, some may be happy with the growth or total return.

mc2fool
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Re: Which general IT to choose?

#262256

Postby mc2fool » November 5th, 2019, 11:44 am

Avantegarde wrote:Any such IT should be better than investing in a cheap world tracker of some sort. By way of example, the 5-year total return on F&C and Bankers has been 97% and 91% respectively. Henderson International Income and Murray International have returned 75% and 44% respectively. By contrast, the L&G International Index tracker (which tracks a world index excluding the UK) has returned 84% in the past five years. So some general ITs have be a better investment than a tracker and some (many) have not. To add a bit more to the picture, the 5-year total return for City and Merchants has been comparatively rotten at 40% and 39% respectively.

And the FTSE100 has a 5 year total return of 39%, so what you are really comparing there is the UK mega cap market with world/ex-UK.

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Re: Which general IT to choose?

#262277

Postby Avantegarde » November 5th, 2019, 12:12 pm

mc2fool wrote:
Avantegarde wrote:Any such IT should be better than investing in a cheap world tracker of some sort. By way of example, the 5-year total return on F&C and Bankers has been 97% and 91% respectively. Henderson International Income and Murray International have returned 75% and 44% respectively. By contrast, the L&G International Index tracker (which tracks a world index excluding the UK) has returned 84% in the past five years. So some general ITs have be a better investment than a tracker and some (many) have not. To add a bit more to the picture, the 5-year total return for City and Merchants has been comparatively rotten at 40% and 39% respectively.

And the FTSE100 has a 5 year total return of 39%, so what you are really comparing there is the UK mega cap market with world/ex-UK.


Indeed. And quite right too. In the past 5-10 years, the action has been outside the UK. And that is where the likes of F&C and Bankers happen to (largely) fish.

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Re: Which general IT to choose?

#262284

Postby mc2fool » November 5th, 2019, 12:25 pm

Avantegarde wrote:
mc2fool wrote:And the FTSE100 has a 5 year total return of 39%, so what you are really comparing there is the UK mega cap market with world/ex-UK.

Indeed. And quite right too. In the past 5-10 years, the action has been outside the UK. And that is where the likes of F&C and Bankers happen to (largely) fish.

Hindsight is wonderful.

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Re: Which general IT to choose?

#262732

Postby gbjbaanb » November 7th, 2019, 10:36 am

richfool wrote:
Avantegarde wrote:Any such IT should be better than investing in a cheap world tracker of some sort. By way of example, the 5-year total return on F&C and Bankers has been 97% and 91% respectively. Henderson International Income and Murray International have returned 75% and 44% respectively. By contrast, the L&G International Index tracker (which tracks a world index excluding the UK) has returned 84% in the past five years. So some general ITs have be a better investment than a tracker and some (many) have not. To add a bit more to the picture, the 5-year total return for City and Merchants has been comparatively rotten at 40% and 39% respectively.

It's important to be sure, or at least aware whether you are comparing like with like (i.e. being careful that you aren't comparing apples with bananas scenario). (You are comparing the tracker with IT's in two different sectors).

Although noted you are looking at total return, it should be borne in mind, in the above examples, that F&C (FCIT) (1.5% yield) and Bankers (2.09% yield) are in the Global Growth sector, targeting growth more than income, and so have low yields. Whereas HINT and MYI are in the Global Growth & Income sector and thus pay higher dividend yields, - HINT (3.37% yield) and MYI (4.18% yield). Some investors may prefer to have the dividend income, some may be happy with the growth or total return.


And not to put too fine a point on it, the next 5 years are likely to be quite different to the last 5.

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Re: Which general IT to choose?

#262766

Postby ReallyVeryFoolish » November 7th, 2019, 12:19 pm

gbjbaanb wrote:
richfool wrote:
Avantegarde wrote:Any such IT should be better than investing in a cheap world tracker of some sort. By way of example, the 5-year total return on F&C and Bankers has been 97% and 91% respectively. Henderson International Income and Murray International have returned 75% and 44% respectively. By contrast, the L&G International Index tracker (which tracks a world index excluding the UK) has returned 84% in the past five years. So some general ITs have be a better investment than a tracker and some (many) have not. To add a bit more to the picture, the 5-year total return for City and Merchants has been comparatively rotten at 40% and 39% respectively.

It's important to be sure, or at least aware whether you are comparing like with like (i.e. being careful that you aren't comparing apples with bananas scenario). (You are comparing the tracker with IT's in two different sectors).

Although noted you are looking at total return, it should be borne in mind, in the above examples, that F&C (FCIT) (1.5% yield) and Bankers (2.09% yield) are in the Global Growth sector, targeting growth more than income, and so have low yields. Whereas HINT and MYI are in the Global Growth & Income sector and thus pay higher dividend yields, - HINT (3.37% yield) and MYI (4.18% yield). Some investors may prefer to have the dividend income, some may be happy with the growth or total return.


And not to put too fine a point on it, the next 5 years are likely to be quite different to the last 5.

If I'm understanding you correctly, you think maybe the post war decline in the UK economy versus most of the world will be turned round? I have kind of got used to (much of) the world seemingly getting richer while our lifestyle in the UK gently declines in comparison through out my life.

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Re: Which general IT to choose?

#262834

Postby Avantegarde » November 7th, 2019, 4:57 pm

gbjbaanb wrote:
richfool wrote:
Avantegarde wrote:Any such IT should be better than investing in a cheap world tracker of some sort. By way of example, the 5-year total return on F&C and Bankers has been 97% and 91% respectively. Henderson International Income and Murray International have returned 75% and 44% respectively. By contrast, the L&G International Index tracker (which tracks a world index excluding the UK) has returned 84% in the past five years. So some general ITs have be a better investment than a tracker and some (many) have not. To add a bit more to the picture, the 5-year total return for City and Merchants has been comparatively rotten at 40% and 39% respectively.

It's important to be sure, or at least aware whether you are comparing like with like (i.e. being careful that you aren't comparing apples with bananas scenario). (You are comparing the tracker with IT's in two different sectors).

Although noted you are looking at total return, it should be borne in mind, in the above examples, that F&C (FCIT) (1.5% yield) and Bankers (2.09% yield) are in the Global Growth sector, targeting growth more than income, and so have low yields. Whereas HINT and MYI are in the Global Growth & Income sector and thus pay higher dividend yields, - HINT (3.37% yield) and MYI (4.18% yield). Some investors may prefer to have the dividend income, some may be happy with the growth or total return.


And not to put too fine a point on it, the next 5 years are likely to be quite different to the last 5.


Maybe, maybe not. My personal decision six years ago to invest in a portfolio of ITs with a wide international spread was based on two overlapping thoughts 1) diversification is the closest thing to a free lunch in investing terms 2) 48,000 of the world's stock market-quoted firms - often paying dividends - are outside the UK with about 2,000 inside the UK. I decided to go for international investment. I shall change my mind when the facts change.

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Re: Which general IT to choose?

#262874

Postby Charlottesquare » November 7th, 2019, 9:27 pm

Dod101 wrote:
ReallyVeryFoolish wrote:
Dod101 wrote:RVF

Don't keep us in suspense then. Which ones are really appalling investments? I know that Edinburgh's record is not very good over the last three years or so and I had the impression that Witan had gone off the rails, but I doubt that any are as bad as say Imperial Brands for Total Return over the last three years or so.

Dod

Not a fantastic benchmark that though, is it Dod101? Don't have to try too hard to look good in that department. Stuffing tenners under the bed beats it.


Yes I agree with you there but you need to look long term.

The other way to look at say Imperial versus ITs is that whilst ITs will often beat individual shares over a given period, they tend not to over other periods and overall, you are reducing risk and also potential returns by choosing ITs. Imperial has been a wonderful investment over say the last 20 years (during which time I have held it). In fact, I have long since extracted much more than my original investment in Imperial and my current holding, not insignificant is held at no cost. I doubt that anyone can say that about any IT.

Dod


I sit in that happy position with Scottish Mortgage IT, purchased in a small family life interest trust I "manage", purchased late 2013, but sadly not in my own holdings- poor decision, it got to the point that it was over twice the value of each of the other six ITs we had bought (all initially equal) and I chopped the holding size so the current holding effectively cost nothing.

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Re: Which general IT to choose?

#262886

Postby Backache » November 7th, 2019, 10:45 pm

ReallyVeryFoolish wrote:If I'm understanding you correctly, you think maybe the post war decline in the UK economy versus most of the world will be turned round? I have kind of got used to (much of) the world seemingly getting richer while our lifestyle in the UK gently declines in comparison through out my life.

I think this may be a bit of a non sequitor, a considerable portion of the FTSE although quoted in London has revenues arising elsewhere. For much of my life the UK stock market has risen in line though at different times with much of the rest of the world even as other countries have developed.
Much of the International stock market growth has come from USA and its valuations undoubtedly appear high by many historical measures whereas the FTSE does not.
I think there is a lot to be said for international diversification, I practice it myself and it's undoubtedly true that the FTSE does not offer a particularly balanced selection of shares but I don't think that the thought that it may bounce back a little compared with the rest of the world an outrageous suggestion.

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Re: Which general IT to choose?

#262894

Postby gbjbaanb » November 7th, 2019, 11:48 pm

ReallyVeryFoolish wrote:If I'm understanding you correctly, you think maybe the post war decline in the UK economy versus most of the world will be turned round? I have kind of got used to (much of) the world seemingly getting richer while our lifestyle in the UK gently declines in comparison through out my life.


actually, no, I was thinking that the recent decade of growth stocks outperforming may well plateau (or fall slightly) as value (or possibly defensive) stocks gain. All those high-growth tech stocks might also get hit with increasing levels of regulation or might even just stop growing as there's nobody left on the planet they haven't already sold to! That's what I was thinking, the SMTs might not perform as well as the CGTs for the next 5 years.


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