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IT Suggestions for beginning additional portfolio

Closed-end funds and OEICs
spiderbill
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IT Suggestions for beginning additional portfolio

#91861

Postby spiderbill » October 30th, 2017, 5:06 pm

Hi All

I've recently been dipping my toe in the waters of ETFs and ITs as a way of broadening out my exposure compared to my individual share portfolio. I have a mainly HYP-oriented portfolio worth about 125k which is generating about 6k in dividends plus an OEIC of around 45k which has tracked the FT100TR pretty well. Since the summer I've bought VWRL and VERX, followed by Henderson Far East Income so I could get a feel for how suitable these would be and to give me a reason to follow and learn about these types of investments. (very early days but VWRL and HFEL are both doing well so far.)

I have an inheritance which I've been drip feeding into shares and the above but I don't currently see many shares that I feel positive about that I'm not already near my limits on, so my thought was to go for another one or two ITs, but I'm unsure which to go for and am hoping for some suggestions from those more experienced in them (i.e. everyone here!)

(I should say that I've already maxed out my ISA for ths year so these would be going into a normal unsheltered account. My non-ISA dividend income is currently about £1550 but I'll be bed&ISA-ing some of that next April.)

Thanks for any suggestions

Spiderbill

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Re: IT Suggestions for beginning additional portfolio

#91879

Postby Plutus » October 30th, 2017, 5:50 pm

Hi Spiderbill.

What do you want the IT(s) to do?
Do you want them to invest in a certain geographical region or asset class(es)?

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Re: IT Suggestions for beginning additional portfolio

#91889

Postby tjh290633 » October 30th, 2017, 6:37 pm

spiderbill wrote:I have an inheritance which I've been drip feeding into shares and the above but I don't currently see many shares that I feel positive about that I'm not already near my limits on, so my thought was to go for another one or two ITs, but I'm unsure which to go for and am hoping for some suggestions from those more experienced in them (i.e. everyone here!)

To my mind you either need to find an IT that covers a region which you don't cover, or else look for a new theme. Maybe one of Luniversal's Baskets which he suggested on TMF.

He had 10 which he was keen on:

City of London, Dunedin Income Growth, Edinburgh, Invesco Income Growth, Merchants, Murray Income, Schroder Income Growth, Securities Trust of Scotland and Temple Bar.

His baskets were:

B8                             
City of London (CTY)
Dunedin Income Growth (DIG)
Edinburgh (EDIN)
Invesco Income Growth (IVI)
Merchants (MRCH)
Murray Income (MUT)
Schroder Income Growth (SCF)
Temple Bar (TMPL)

and

B7
Bankers (BNKR)
F&C Capital and Income (FCI)
JPM Claverhouse (JCH)
Lowland (LWI)
Mercantile (MRC)
Murray International (MYI)
Perpetual Income & Growth (PLI)

I think that the B7 had a lower yield at the outset, but a potential for more rapid dividend growth. I have some notes of his back-testing, which indicated that, from a start in 2000 to the end of 2010, the B8 was still ahead in terms of total income received, but the B7 was by then ahead in terms of dividends per year.

TJH

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Re: IT Suggestions for beginning additional portfolio

#91904

Postby Raptor » October 30th, 2017, 7:45 pm

Plutus wrote:Hi Spiderbill.

What do you want the IT(s) to do?
Do you want them to invest in a certain geographical region or asset class(es)?


As well as this do you want capital growth or high yield? Luni's baskets to my mind were a mix of income and capital.

I am also looking at expanding my IT portfolio am weak in Europe and the Americas myself and looking at income. EAT has come to the top but am a little way off having the money to expand.

Raptor

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Re: IT Suggestions for beginning additional portfolio

#91912

Postby spiderbill » October 30th, 2017, 8:05 pm

Raptor wrote:As well as this do you want capital growth or high yield? Luni's baskets to my mind were a mix of income and capital.

I am also looking at expanding my IT portfolio am weak in Europe and the Americas myself and looking at income. EAT has come to the top but am a little way off having the money to expand.

Raptor


Good question! I keep telling myself that I need a bit more growth as counterpoint to the HYP (and replace some of the losses on Carillion, Petrofac, etc!) but then I find myself looking at the yield and feeling uncomfortable if it's too low :?

Hadn't come cross EAT. (I notice Digital Look says the yield is 6.4% but shows a pre-tax loss for 2016 - what's that about?) Which prompts a question - are Digital Look figures as accurate for ITs as they are for shares?

Spiderbill

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Re: IT Suggestions for beginning additional portfolio

#91917

Postby Urbandreamer » October 30th, 2017, 8:23 pm

I to would echo Plutus.

Luni of course sugested Baskets of IT's to act a bit like a HYP, though hopefully achieving wider diversification. I, on the other hand tend to use them to invest in regions/themes that don't quite fit in with HYP, or where directly buying shares might be difficult.

For example like you I have HFEL, but do "Far East" shares fit well with the HYP (alternative to annuety's for a UK pension) theme?

I bought FCRL because of its strong record of dividend growth and wide remit. I also wanted to reduce the number of individual shares that I held. FCS for capital growth (I'm not totally sold on the HYP idea). It also has quite a good dividend record (though not current yield). SMT for blue sky stuff (but expect it to be volatile). IBT (it returns up to 4% of NAV) because I like biotek and TEM because they are buying tec firms in emerging markets.

I tend to view my entire portfolio as income and growth, rather than HYP (which I limit to direct shares). I'm happy with the current yield of 3.5% but recognise that those who wish a traditional HYP might want more.

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Re: IT Suggestions for beginning additional portfolio

#91925

Postby doug2500 » October 30th, 2017, 9:12 pm

EAT is unusual as it pays out 6% of NAV as a dividend, in euros. This obviously comes from capital as well as income.

For foreign exposure I also like FEET and HINT.

For smaller cap with an income bent I like Diverse IT, DIVI

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Re: IT Suggestions for beginning additional portfolio

#91936

Postby 77ss » October 30th, 2017, 10:08 pm

spiderbill wrote:[
Good question! I keep telling myself that I need a bit more growth as counterpoint to the HYP (and replace some of the losses on Carillion, Petrofac, etc!) but then I find myself looking at the yield and feeling uncomfortable if it's too low :?

Spiderbill


You have to decide on your objectives - diversity, income, time-span........ I would be very careful about trying too hard to replace your losses. They've happened, don't compound them by loosening your criteria.

FWIW, I decided several years ago to buy some ITs to complement my HYP - in areas where I didn't feel there were obvious HYP shares. Income was not a prime concern - it was diversification and capital growth prospects that I focused on.

I bought Worldwide Health Trust (WWH) to give me broader exposure to the general pharma/biomedical sector (I already had AZN and GSK) and Henderson Smaller Companies (HSL) for general exposure to UK sub-350 companies - an area where I had nothing. These are just examples - not recommendations - it all depends on what you want - and, as always, DYOR.

So far, so good, with XIRRs of 25% and 21% respectively. Low/modest yields, but that wasn't the point - with that kind of capital growth, one can top-slice occasionally, putting the proceeds into a higher yielding share.

There are plenty of other options (too many perhaps) - geographical, industry...... I found that some time spent on trustnet was essential. The higher yielding ITs other people have mentioned must be worth considering if you want the income.

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Re: IT Suggestions for beginning additional portfolio

#91954

Postby midgesgalore » October 30th, 2017, 11:53 pm

spiderbill wrote:... I've recently been dipping my toe in the waters of ETFs and ITs as a way of broadening out my exposure compared to my individual share portfolio.
...
(I should say that I've already maxed out my ISA for ths year so these would be going into a normal unsheltered account. My non-ISA dividend income is currently about £1550 but I'll be bed&ISA-ing some of that next April.) ...


My bold to highlight
I agree, I would not place a growth IT/ETF into an ISA if I had another investment with a higher yield unsheltered from tax that I could bed & ISA instead.

midgesgalore

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Re: IT Suggestions for beginning additional portfolio

#92026

Postby spiderbill » October 31st, 2017, 11:39 am

Plutus wrote:What do you want the IT(s) to do?
Do you want them to invest in a certain geographical region or asset class(es)?


That's very odd, one of my replies posted last night seems to have vanished. It was expanding on this and thanking you and Terry for you replies. So apologies for appearing rude by not replying! Now I just need to remember what I said!

In essence my thoughts were to cover geographical regions where my HYP, being typically UK biased, wasn't providing any. That was the thinking behind buying VWRL (mostly for some US exposure) and HFEL.

I'd thought less about assest classes and sectors but a look at my current weighting shows that I'm heavily into insurance, banks and financials, oil, utilities, mining, tobacco, pharma, and REITs, while being light on technology, engineering and media. So perhaps some leaning towards the latter might be applicable.

As regards Terry's reply, I used to read Luni's old B7/B8 reports, although not then having the resources to invest in ITs as well as shares I wasn't as focused on them as I might have been. I have a watchlist in a separate copy of HYPTUS which contains them and a handful of others that I've seen mentioned, but I didn't feel I really understood them well enough to commit apart from my recent to-dipping. Hence this thread.

Thanks again to you both

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Re: IT Suggestions for beginning additional portfolio

#92029

Postby spiderbill » October 31st, 2017, 11:51 am

Urbandreamer wrote:Luni of course sugested Baskets of IT's to act a bit like a HYP, though hopefully achieving wider diversification. I, on the other hand tend to use them to invest in regions/themes that don't quite fit in with HYP, or where directly buying shares might be difficult.


Thanks for your thoughts. I suppose to some extent I was avoiding the baskets as it was a bit too close to the HYP idea, and it was indeed the alternative regions and themes that I was interested in.

Urbandreamer wrote:For example like you I have HFEL, but do "Far East" shares fit well with the HYP (alternative to annuety's for a UK pension) theme?

Now that I've got the HYP up to its current levels and alongside a personal pension of a similar size that I can draw down from, I'm looking to add areas that are based on other strategies, so I'm quite happy with HFEL so far. (early days of course)

Urbandreamer wrote:I bought FCRL because of its strong record of dividend growth and wide remit. I also wanted to reduce the number of individual shares that I held. FCS for capital growth (I'm not totally sold on the HYP idea). It also has quite a good dividend record (though not current yield). SMT for blue sky stuff (but expect it to be volatile). IBT (it returns up to 4% of NAV) because I like biotek and TEM because they are buying tec firms in emerging markets.


Thanks for the suggestions - I'll look at them closely.

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Re: IT Suggestions for beginning additional portfolio

#92034

Postby spiderbill » October 31st, 2017, 12:04 pm

77ss wrote:You have to decide on your objectives - diversity, income, time-span........ I would be very careful about trying too hard to replace your losses. They've happened, don't compound them by loosening your criteria.


See my other replies this morning for some of the objectives. I was being a bit frivolous in the comment about the losses - I'm not planning on risky buys to replace them. Merely moving a little towards the growth end of the scale with less emphasis on the income for these new purchases.

77ss wrote:FWIW, I decided several years ago to buy some ITs to complement my HYP - in areas where I didn't feel there were obvious HYP shares. Income was not a prime concern - it was diversification and capital growth prospects that I focused on.


That echoes my own intended feelings. Just need to stop looking at the yield column ;-)

77ss wrote:I bought Worldwide Health Trust (WWH) to give me broader exposure to the general pharma/biomedical sector (I already had AZN and GSK) and Henderson Smaller Companies (HSL) for general exposure to UK sub-350 companies - an area where I had nothing. These are just examples - not recommendations - it all depends on what you want - and, as always, DYOR.


Indeed; but interesting examples nonetheless.

77ss wrote:So far, so good, with XIRRs of 25% and 21% respectively. Low/modest yields, but that wasn't the point - with that kind of capital growth, one can top-slice occasionally, putting the proceeds into a higher yielding share.

There are plenty of other options (too many perhaps) - geographical, industry...... I found that some time spent on trustnet was essential. The higher yielding ITs other people have mentioned must be worth considering if you want the income.


Sounds like a good result. Hope it continues.
Yes, the too many options was partly what was making me hesitate. With the pointers that I'm getting I feel I'll be in a much better position to research in a more focused manner and maybe even feel like I know what I'm doing. :lol:

Thanks again
Spiderbill

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Re: IT Suggestions for beginning additional portfolio

#92173

Postby gbjbaanb » October 31st, 2017, 11:00 pm

spiderbill wrote:In essence my thoughts were to cover geographical regions where my HYP, being typically UK biased, wasn't providing any. That was the thinking behind buying VWRL (mostly for some US exposure) and HFEL.


There was an alternative IT portfolio from a user called gadge that he called GIP. He listed the dozen ITs he had selected and showed the area or asset class they were involved in to get a wide diversification. There are posts on here continuing it if you search this section.

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Re: IT Suggestions for beginning additional portfolio

#92195

Postby Itsallaguess » November 1st, 2017, 4:38 am

gbjbaanb wrote:
spiderbill wrote:
In essence my thoughts were to cover geographical regions where my HYP, being typically UK biased, wasn't providing any. That was the thinking behind buying VWRL (mostly for some US exposure) and HFEL.


There was an alternative IT portfolio from a user called gadge that he called GIP. He listed the dozen ITs he had selected and showed the area or asset class they were involved in to get a wide diversification. There are posts on here continuing it if you search this section.


Here's a good thread on the 'Gadge Global Income Portfolio' for anyone interested -

viewtopic.php?f=8&t=92

Cheers,

Itsallaguess

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Re: IT Suggestions for beginning additional portfolio

#92234

Postby spiderbill » November 1st, 2017, 9:25 am

Itsallaguess wrote:
gbjbaanb wrote:
There was an alternative IT portfolio from a user called gadge that he called GIP. He listed the dozen ITs he had selected and showed the area or asset class they were involved in to get a wide diversification. There are posts on here continuing it if you search this section.


Here's a good thread on the 'Gadge Global Income Portfolio' for anyone interested -

viewtopic.php?f=8&t=92


Thanks to you both for that. I vaguely recall seeing one of the early posts about it (was it originally on TMF?) and will now go and read it and see what I can learn.

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Re: IT Suggestions for beginning additional portfolio

#92252

Postby gbjbaanb » November 1st, 2017, 10:38 am

spiderbill wrote:Thanks to you both for that. I vaguely recall seeing one of the early posts about it (was it originally on TMF?) and will now go and read it and see what I can learn.


Yes it started on TMF. I liked what he said as he showed the reasons for each trust. He split them partly geographically, partly asset class so he had a property, commodity, infrastructure and a vc trust in there.

I'd have added a healthcare and an energy trust too, but I guess you can add all of them if you start diversifying enough!

Maybe a HYP of trusts is a good idea seeing as how many HYP shares have not been quite as boring as anticipated recently :-)

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Re: IT Suggestions for beginning additional portfolio

#92297

Postby Plutus » November 1st, 2017, 12:41 pm

spiderbill wrote:...

That's very odd, one of my replies posted last night seems to have vanished. It was expanding on this and thanking you and Terry for you replies. So apologies for appearing rude by not replying! Now I just need to remember what I said!...


Hello Spiderbill, there's no need to apologise.

I'm far from an expert but I'm trying to find a strategy that suits my temperament whilst combing historical investments.

The only IT that I own is BRWM (Blackrock World Mining) that I've retained from when I had a HYP-ish portfolio and I used BWRM to cover more than one direct investment in mining companies.

I'm moving towards a global passive ETF portfolio but I may yet keep BRWM for some commodity exposure, it includes gold too. Good luck with your plans, I think that as long as you have an outline and don't change too much then you'll be OK with most strategies in the longer term. Buying low and selling high helps too. ;)

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Re: IT Suggestions for beginning additional portfolio

#92952

Postby spiderbill » November 3rd, 2017, 5:03 pm

For anyone following this thread, I bought my second IT today - Murray International Trust (MYI). Same weighting as HFEL.

It was a toss up between that or Foreign and Colonial (FCI), which I'll probably go for as my third buy in a couple of weeks time. Might as well get some of the standard choices in the bag now before venturing into any more unusual areas. Thanks again for all contributions.

Spiderbill

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Re: IT Suggestions for beginning additional portfolio

#93035

Postby BrummieDave » November 4th, 2017, 12:38 pm

All good solid ITs IMHO, and three that I hold (LTB&H).

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Re: IT Suggestions for beginning additional portfolio

#124784

Postby Gadge » March 14th, 2018, 12:23 pm

Hi Spiderbill

Hope 2018 is going well so far for you.

My view is that when building your portfolio you may want to set overall objectives first e.g. growth. Then build some large core holdings, then add on smaller (5%?) holdings covering themes or areas of interest, making sure that all choices accord with the initial main objectives.

That is basically how GIP works with global diversified income as the overall objective.

Reading this thread, I am not really clear how you choose MYI over F&C or why either. Are you? Not to say that either are bad choices if they fit in with your defined strategy.

Gadge


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