Broadening out in ITs

[spiderbill]

As part of my review of my investment direction and considering what to do with about £120k (discussed in the Retirement Investing group at https://www.lemonfool.co.uk/viewtopic.php?f=30&t=10201&p=119080#p119080) I've been looking at possibly expanding my so-far tentative collection of ITs - all two of them.

I bought Henderson Far East Income (HFEL) and Murray International (MYI) last Autumn just to test the water, as I'm a novice in this area. Also bought a couple of ETFs, again to get a feel for them. (HFEL initially did well up till the recent correction and is now 1.95% up while my timing of MYI was less successful and it's now 4.55% down - but it's very early days.)

My intention in buying them was partly to diversify away from mostly UK-based companies in my HYP and get more exposure to places like the US and far-east, without the hassle of individual share selection and withholding tax. In my review I'm also looking more at mixed growth & income or maybe even pure growth as a counterpoint to the income focused HYP (which has taken some heavy capital hits recently.)

To that end I've been building a watch list in a spreadsheet (HYPTUS is useful for more than just HYP) and keeping an eye on movements. Initially I'd intended to buy F&C Capital and Income (FCI) but on closer inspection they duplicate many of my holdings. As I say I'm still a novice in this area so I wanted to run the current very provisional short-list past this group to gauge opinions on them, or to get any other suggestions that I may have missed.

Foreign & Colonial Investment Trust (FRCL)
Baillie Gifford Japan Trust (BGFD)
Scottish American Inv Company (SCAM)
Schroder Oriental Income Fund Ltd. (SOI)
JPMorgan European Inv Trust Growth Shares (JETG)
Scottish Mortgage Inv Trust (SMT) (maybe a bit high risk at the moment?)

Thanks for any opinions
Spiderbill

[Longtermyieldman]

If you want either growth or growth and income non-UK ITs, I'd look at:

Scottish Mortgage
F&C Global Smaller Companies
Pantheon International
TR European Growth
Some sector specific ITs such as Polar Capital Technology, International Biotechnology Trust, Worldwide Healthcare Trust

These would give you a wide spread of geographies, sectors and scales, which is good for managing volatility.

[spiderbill]

Thanks for those suggestions Longtermyieldman, I'll go and look at them in detail; there's a couple there that I hadn't come across before.

cheers
Spiderbill

[jackdaww]

i recently bought into henderson far east hfel. which invests in china s.korea taiwan japan india including samsung .

yielding over 5% at SP 370 .

[Darka]

So far I have:

- UK - (City Of London CTY and Merchants Trust MRCH)
- Europe - (Murray International MYI)
- Far East - (Henderson Far East Income HFEL)
- US - (Blackrock North America BRNA)

in addition I run a HYP, the IT's are to help stabilise the income from that.

[monabri]

Good post Spiderbill. I'm going along in exactly the same direction and with the same thoughts. I wanted to diversify out of "Brexit Britain" and have added HFEL, MYI, EAT, BRNA & NAIT (I wasn't sure which one of the latter 2 to select but then I had a look at their top holdings and so went 50:50).

HFEL is my biggest IT holding followed by MYI.

When it comes to adding growth ITs - my thoughts are along the lines of "hold on for the next jitter in the market".

MY ratio of HYP (UK) to IT holdings is 87% : 13% - I would like to increase the IT exposure going forward.

[monabri]

If it helps - here's the geographic allocations for each fund from their datasheets at the end of Dec 17. There is a smattering of UK in some of the funds.






And here's a link to the useful "A.I.C"


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

[tramrider]

I hold quite a few of the ITs suggested in the various posts, including HFEL, IBT, MYI, SMT, SOI, TRG and they seem to be performing satisfactorily. Another suggestion you might like is:

JP Morgan Asia Pacific JAI

They are paying about 4% income by augmenting dividends by selling a small amount of the growth in capital. It provides a nice balance between growth and income for reinvesting where you will. At present it is on 11.6% discount. Their JPGI fund behaves similarly but is on a slight premium at present.

Tramrider

[XFool]

i recently bought into henderson far east hfel. which invests in china s.korea taiwan japan india including samsung .

The HFEL investment policy excludes Japan.

[spiderbill]

When it comes to adding growth ITs - my thoughts are along the lines of "hold on for the next jitter in the market".

Yes I have been wondering about that since there are still a fair few commentators who reckon there's another correction (or worse) on the horizon. However it feels wasteful to have a lot of cash lying around doing nothing. Had I had all my research complete I might have jumped in on the recent correction but it came a little too soon for me. Perhaps going for the mixed growth/income ITs might be more prudent right now... Lots to consider.

cheers
Spiderbill

[spiderbill]

JP Morgan Asia Pacific JAI
.
They are paying about 4% income by augmenting dividends by selling a small amount of the growth in capital. It provides a nice balance between growth and income for reinvesting where you will. At present it is on 11.6% discount. Their JPGI fund behaves similarly but is on a slight premium at present.

JAI were on my longlist as a possibility but I assumed they were more about income, so that information is interesting, thanks. I'll look at them in more detail.

cheers
Spiderbill

[Itsallaguess]

However it feels wasteful to have a lot of cash lying around doing nothing.

I like to have a cash buffer, even if it's only earning a little interest overall.

It's good to know that if there's dips of a decent size, such as the near-10% one recently seen in the FTSE, then I've got some ammo available to pick a couple of bargains up with. It's a good feeling to be able to buy something you've had your eye on, and is potentially a much better price, when everything else is a sea of red in your portfolio.....

I see the opportunity-cost of keeping this cash in the same way as I see the various insurances that I sometimes pay for - it's there for a specific reason, and it gives me a personal benefit to know it's there, and importantly it allows me to stay fully invested with the rest of my portfolio when markets go through their regular spasms.

I hold some short-term capital in cash, and now have some squirrelled away in these interest-paying Guaranteed Growth Bonds from NS&I that someone kindly brought to our attention a few months ago -

https://www.nsandi.com/guaranteed-growth-bonds

The interest isn't stellar, but it's better than nothing, and goes some way to providing at least some inflation-protection for some of these funds.

Cheers,

Itsallaguess

[spiderbill]

We have diversified across 30 to 40 of them (not sure of the precise number) as part of our overall portfolio. i.e. all those I.T's that are part of the FTSE 250 index

Now that would certainly add to the research time!

Does that not end up a bit like a world tracker, or are there advantages to this route?

cheers
Spiderbill

[gbjbaanb]

We have diversified across 30 to 40 of them (not sure of the precise number) as part of our overall portfolio. i.e. all those I.T's that are part of the FTSE 250 index

Now that would certainly add to the research time!

Does that not end up a bit like a world tracker, or are there advantages to this route?

cheers
Spiderbill

In many respects that's what you want - a tracker can be considered a 100% diversified trust! (tough possibly worse, but probably better than ITs that pick a relative few companies from their geographic exchanges).

there have been some other IT collections on here- luniversal's posts (viewtopic.php?f=54&t=10278) about his basket of 7 and basket of 8 are worth reading, of a collection of 10 ITs chosen to give a diversified spread - into property and VC as well as the usual.

[Scooby999]

Hi Spider,

I’m currently starting out in a similar vein. I have a modest HYP but have decided to opt for growth too given length of time until retirement.

I’m planning on the following in a SIPP:

Aberdeen Asia Pacific (acc)
FP CRUX European Special Situations (acc)
Man GLG Japan CoreAlpha (acc)
Fundsmith Equity (acc)

Like you, I find the amount of information and choice bewildering.


I also have an existing works pension with a split across :

Global emerging markets
Global developed growth equity
Government bonds

This feels sensibly diversified to me without being overly spread but hey, what do I know ?

Scooby

[JMN2]

I now have initial positions in

Finsbury
Foreign Colonial
Murray Income
Murray Intl
Scottish Mortgage
Temple Bar

yielding ~3.2 per cent, happy with the selection but not convinced it is the time to commit real funds. Sitting on a lot of cash + £20k due next month but no real idea where to put it. Seems very foggy at the moment.

Perhaps I'll buy a new car, get the kitchen renovated and get a plumber to replace some john guest with copper + water hammer device...

[monabri]

In the New Tax year, I added JAI (goes XD tomorrow 12 April) and JRS (JP Morgan Russia)...the latter was added with a longer term view after Trump started to throw his toys out of the pram.

I wanted to add a smaller chunk of SEQI but it was only "available" in a non ISA account ( same issue with BRNA but strangely no problem with NAIT). Is this problem trading platform specific ( I uses SVS Securities) ?

[Dod101]

I now have initial positions in

Finsbury
Foreign Colonial
Murray Income
Murray Intl
Scottish Mortgage
Temple Bar

yielding ~3.2 per cent, happy with the selection but not convinced it is the time to commit real funds. Sitting on a lot of cash + £20k due next month but no real idea where to put it. Seems very foggy at the moment.

I too hold all of these except for Foreign & Colonial although I see nothing wrong with it. I also hold Caledonia (quite a lot of non quoted stuff), Edinburgh (duplicates some HYP shares though) and RIT which counters the higher risk exposure of Scottish Mortgage. Like Arb, I have been wondering about Murray Income.

Dod

[Alaric]

Is this problem trading platform specific ( I uses SVS Securities) ?

It's Guernsey based but there doesn't seem to be anything saying it's not eligible for ISAs.

There again, I didn't find any positive statements that it was.

[scotia]

I wanted to add a smaller chunk of SEQI but it was only "available" in a non ISA account ( same issue with BRNA but strangely no problem with NAIT). Is this problem trading platform specific ( I uses SVS Securities) ?

Check Out Hargreaves Lansdown - they seem to have no ISA restrictions on SEQI or BRNA