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City of London - is it worth it?

Closed-end funds and OEICs
monabri
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Re: City of London - is it worth it?

#156927

Postby monabri » August 3rd, 2018, 12:13 pm

Fred

I contacted HL to check if they were happy that I was posting their graphs on TLF. I told them that I would make reference to the source of info.

So, I have their permission to do this.

monabri

p.s. I couldn't see an option for TR which would have been useful.

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Re: City of London - is it worth it?

#156930

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

Putting on my tin hat before I post, to borrow a phrase from a well known advertising campaign here in the UK, doesn't CTY do "exactly what it says on the tin...?"

It's a LTBH income generator for Doris.

Itsallaguess
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Re: City of London - is it worth it?

#156932

Postby Itsallaguess » August 3rd, 2018, 12:33 pm

FredBloggs wrote:
would someone around here please tell me (by PM if required) why my exact same sourced graphics are routinely removed when I post them?

Thank you.


Difficult to say without being able to see the original posts Fred, but I think we're taking a 'fair use' view on this generally, so as long as the source material is attributed, usually in the form of a URL link to where people can access exactly the same information publicly anyway, then I would like to think that any such information would be allowed to stand.

I think there would perhaps be issues with 'gratuitous use', maybe, and certainly where source-URL's aren't attributed then I'd also expect issues, but I think as a first step you should ensure that URL links are provided to the material at the very least.

I do agree that it's useful to see information like this in pictorial form, but if there are issues with importing pictures into your posts, there's still nothing to stop you continuing to post the URL's to the same information anyway....

Cheers,

Itsallaguess

Itsallaguess
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Re: City of London - is it worth it?

#156939

Postby Itsallaguess » August 3rd, 2018, 12:55 pm

FredBloggs wrote:
Off topic, I know but as you posted, I'll reply - My removed graphics are from the identical source as Monabri's, accredited to HL.


Hi Fred,

I've replied via PM so as not to clog up this thread with OT posts.

Cheers,

Itsallaguess

mc2fool
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Re: City of London - is it worth it?

#156941

Postby mc2fool » August 3rd, 2018, 1:09 pm

monabri wrote:p.s. I couldn't see an option for TR which would have been useful.

No, unfortunately HL don't have that option for share charts. They do have if for funds charts, and in fact you can add shares to a fund chart, but the fund charts are limited to only 5 years.

You could look at the AIC. Their charts do show total return, and let you go to 10 years. However they only allow comparison with funds and other ITs and not indices or any other shares. But that's not all bad as you can't actually buy an index itself, only an ETF or tracker, so a comparison with what you could buy instead is, in fact, more valid.

Go to https://www.theaic.co.uk/companydata/335/performance, get rid of the two "NAV" lines keeping just CTY and, if you like, Morningstar Investment Trust UK Equity Income (CTY's self-declared benchmark) and click on 10Y.

Then click on More data and typed "FTSE" into Compare. That'll give you a list of trackers (OEICs) with FTSE in their name from which you can choose the one you want to compare with. Repeat to add another.

I chose somewhat randomly and without any research HSBC FTSE 100 Index Accumulation C and HSBC FTSE 250 Index C Acc. There may be better choices. Of those HSBC trackers, the FTSE 100's 10yr TR is +97.56%, the FTSE 250's +192.08% vs CTY's 173.33%.

So, CTY trashed that FTSE 100 tracker but underperformed the FTSE 250 tracker. However, it is, of course, easy to retrospectively pick an index (and tracker of) that one could have done better in, but the question is whether that is the correct index to be comparing with.

A quick look at CTY's portfolio, https://www.theaic.co.uk/companydata/335/portfolio, shows that it is 72.6% FTSE 100 equities and only 12.4% FTSE 250, and so a comparison with 100% FTSE 250 isn't really valid as (assuming it was much the same then) you'd have presumably considered and bought CTY 10 years ago 'cos you wanted an IT producing higher dividends from UK mega caps, and if you didn't want equity income from (mostly) FTSE 100 companies you wouldn't have considered it in the first place.

P.S. I don't hold CTY.

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Re: City of London - is it worth it?

#156946

Postby BrummieDave » August 3rd, 2018, 1:21 pm

Yes, so as I posted earlier before the stream of OT posts about adding charts, CTY does "what it says on the tin...".

It provides Doris with a LTBH income generator.

If you don't want it, don't buy it.

It's 4% of my IT portfolio.

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Re: City of London - is it worth it?

#156957

Postby Lootman » August 3rd, 2018, 1:41 pm

mc2fool wrote:So, CTY trashed that FTSE 100 tracker but underperformed the FTSE 250 tracker. However, it is, of course, easy to retrospectively pick an index (and tracker of) that one could have done better in, but the question is whether that is the correct index to be comparing with.

A quick look at CTY's portfolio, https://www.theaic.co.uk/companydata/335/portfolio, shows that it is 72.6% FTSE 100 equities and only 12.4% FTSE 250, and so a comparison with 100% FTSE 250 isn't really valid as (assuming it was much the same then) you'd have presumably considered and bought CTY 10 years ago 'cos you wanted an IT producing higher dividends from UK mega caps, and if you didn't want equity income from (mostly) FTSE 100 companies you wouldn't have considered it in the first place.

Yes, I think that is a fair assessment. What CTY has done a competent job of doing is picking (mostly) FTSE-100 shares with a skew towards higher yields, and managed to out-perform that benchmark. Now, that is a reasonable performance since (in my view anyway) skewing to higher yields can easily increase risk and/or decrease growth. So credit to CTY for that.

But as such, it doesn't satisfy someone like me who wants a broader base of investments including mid-caps, small-caps, growth shares and foreign shares. So CTY is certainly not a "buy just this one IT and then ignore it" kind of eternity holding that some claim for it. At best it is a decent proxy for higher-yielding FTSE-100 shares, which represents in market cap terms about 3% of the global equity investment universe.

So the best I'd say is that if you are running a HYP as either part or all of your investment strategy, then this might be a good and easier alternative to that, at least until an effective UK income ETF comes along. But its utility does not extend much beyond that. It's just not that special.

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Re: City of London - is it worth it?

#156966

Postby scotia » August 3rd, 2018, 2:25 pm

Yes - I used the Funds Tool on Hargreaves Lansdown. You can plot the HSBC index funds for the FTSE 100, 250 and All shares. But you can also plot an Equity - e.g. CTY. And you can select total return. That's what I did. The only limitation is that the maximum period is 5 years. However if the CTY manager has failed to produce any benefits over the past 5 years , then I'm certainly not investing in their IT in the hope that it will do better in the future. I prefer a Vanguard FTSE 250 ETF and an Xtrackers FTSE 100 ETF for my FTSE trackers. I don't ignore managed funds, but I expect the manager to be adding value. E.G I hold Finsbury Growth & Income Trust.

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Re: City of London - is it worth it?

#157054

Postby 77ss » August 3rd, 2018, 10:29 pm

scotia wrote:Yes - I used the Funds Tool on Hargreaves Lansdown. You can plot the HSBC index funds for the FTSE 100, 250 and All shares. But you can also plot an Equity - e.g. CTY. And you can select total return. That's what I did. The only limitation is that the maximum period is 5 years. However if the CTY manager has failed to produce any benefits over the past 5 years , then I'm certainly not investing in their IT in the hope that it will do better in the future. I prefer a Vanguard FTSE 250 ETF and an Xtrackers FTSE 100 ETF for my FTSE trackers. I don't ignore managed funds, but I expect the manager to be adding value. E.G I hold Finsbury Growth & Income Trust.


FWIW, Morningstar provides 10 year total return data.

CTY is said to have given an annualised TR (NAV basis) of 9.93%

BY way of comparison with a couple of other ITs, FRCL gave 11.26% and Finsbury 16.81%. FRCL is my largest holding at 4.7%, and likely to remain so - until I start to release capital. I do look at Finsbury every now and then, but is has a lot of overlap with my existing holdings (DGE, ULVR, SDRC....).

As I see it, if you want a steady income, and don't care too much about the capital then CTY may be worth consideration. If you are still working and building up your portfolio, then what does it offer?

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Re: City of London - is it worth it?

#157073

Postby mc2fool » August 4th, 2018, 1:05 am

77ss wrote:FWIW, Morningstar provides 10 year total return data.

CTY is said to have given an annualised TR (NAV basis) of 9.93%

BY way of comparison with a couple of other ITs, FRCL gave 11.26% and Finsbury 16.81%.

FYI, the AIC charts are provided by Morningstar.

CTY's annualised 10 year actual (share price) TR is 10.58%pa (you don't buy/sell at NAV...)

Comparing with FRCL really isn't valid, it's a global trust with only 11% in the UK. You know, if we're just playing the game of ignoring everything other than the numbers and picking whatever apples or pears beat the oranges, then why is anyone holding losers like FRCL and Finsbury ... y'all should have got the Volta Finance IT (VTA), 10Y TR 29.99%pa (a 12-bagger), right?

(I'm not saying FRCL isn't a good IT to hold, just that it's not valid to compare it with CTY. Finsbury is at least mostly in the UK ...)

77ss wrote:As I see it, if you want a steady income, and don't care too much about the capital then CTY may be worth consideration. If you are still working and building up your portfolio, then what does it offer?

How about a better 10Y TR than a FTSE 100 tracker? 10.58%pa vs 7.35%pa for the iShares FTSE 100 ETF (ISF). Not bad, apples for apples...

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Re: City of London - is it worth it?

#157100

Postby mc2fool » August 4th, 2018, 10:39 am

FredBloggs wrote:
mc2fool wrote:How about a better 10Y TR than a FTSE 100 tracker? 10.58%pa vs 7.35%pa for the iShares FTSE 100 ETF (ISF). Not bad, apples for apples...

Seriously, do I understand correctly? Anyone here is advocating a FTSE 100 Tracker or even CTY for someone who is (trying) to accumulate wealth? I see mainly downside in that strategy. We have a FTSE 100 barely above its 1999 level (plus divis, sure) and periodically guaranteed to suffer a 30, 40 or more per cent draw down at the next big market upset? Surely, far better to go all out for the most growth at a reasonably tolerable risk during the accumulation of wealth phase? Longer term such a strategy as you seem to advocate is going to seriously damage your (potential) wealth.

I wasn't advocating anything, just pointing out the simple fact stated against the relevant index to compare CTY to. Others in this thread have said they hold a FTSE 100 tracker. I don't (nor CTY).

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Re: City of London - is it worth it?

#157101

Postby 77ss » August 4th, 2018, 10:45 am

mc2fool wrote:CTY's annualised 10 year actual (share price) TR is 10.58%pa (you don't buy/sell at NAV...)


True, but which do you think gives a better measure of the underlying performance? You can only narrow the discount once - and what happens if the discount increases?

mc2fool wrote:
Comparing with FRCL really isn't valid, it's a global trust with only 11% in the UK.


Sure, FRCL is a global trust. I don't see why that invalidates the comparison. I fail to see why any investment has to be UK/FT100 focussed.

mc2fool wrote:
How about a better 10Y TR than a FTSE 100 tracker? 10.58%pa vs 7.35%pa for the iShares FTSE 100 ETF (ISF). Not bad, apples for apples...


If one chooses an undemanding metric as the benchmark then many investments can be made to look good. An FT100 tracker? Why not choose (for example) an FT250 tracker? I used to have one, and it did quite well, but I have since switched to the JP Morgan IT (JMF). 10 year annualised NAV TR 12.55%. Or even the lower reaches - Henderson Smaller Companies IT (HSL) has a 10 year annualised NAV TR of 16.56%

I wasn't aware that AIC took their data from Morningstar - so thanks for that.

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Re: City of London - is it worth it?

#157128

Postby UncleEbenezer » August 4th, 2018, 1:47 pm

monabri wrote:I contacted HL to check if they were happy that I was posting their graphs on TLF. I told them that I would make reference to the source of info.

So, I have their permission to do this.

I would've said that's not "their graph". It's your graph, that just happens to be prepared using their tools.

If we were to give proprietorship to the tools, I should be claiming my stake in the Lemon Fool on account of my role in two of its key software components!

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Re: City of London - is it worth it?

#157138

Postby mc2fool » August 4th, 2018, 2:26 pm

77ss wrote:True [you don't buy/sell at NAV...], but which do you think gives a better measure of the underlying performance? You can only narrow the discount once - and what happens if the discount increases?

The same as happens to FRCL (12.68%pa share price 10Y TR vs 11.33%pa NAV) and Finsbury (17.66% vs 16.94%). Changes in discounts/premiums is just something you have to deal with (or try to play) if you invest in ITs, but to the good or to the bad it's the share price performance you get.

77ss wrote:Sure, FRCL is a global trust. I don't see why that invalidates the comparison. I fail to see why any investment has to be UK/FT100 focussed.

Any investment most certainly doesn't have to be UK or FTSE 100 focused, but we're not talking about any investment, we're talking about what to compare a FTSE 100 focused IT to. Nobody (I hope!) considers buying a FTSE 100 focused IT 'cos they want to invest in emerging markets, or in debt instruments, or even 42% in the US and only 11% in the UK (as FRCL). They buy a FTSE 100 focused IT 'cos they want to invest in UK mega caps and so the valid comparisons for that IT are other FTSE 100 focused investments.

77ss wrote:If one chooses an undemanding metric as the benchmark then many investments can be made to look good. An FT100 tracker? Why not choose (for example) an FT250 tracker? I used to have one, and it did quite well, but I have since switched to the JP Morgan IT (JMF). 10 year annualised NAV TR 12.55%. Or even the lower reaches - Henderson Smaller Companies IT (HSL) has a 10 year annualised NAV TR of 16.56%

And if one chooses an irrelevant metric as the benchmark then many investments can be made to look bad :-). Whether the FTSE 100 has proved, in hindsight, to be "undemanding" is besides the point; the point is that it's what a FTSE 100 focused IT invests within and so is the (or at, least, a) right benchmark.

But do you really not see the issue with apples vs oranges comparisons? I notice you didn't pick up on my comment about y'all should have invested in Volta Finance IT (VTA), which was meant to (ironically) highlight the problem of irrelevant comparisons, so maybe it wasn't so clear an example (or maybe it was and that's why you didn't address it ;))

Methinks you (and others) are confusing and/or conflating choices and comparisons between asset sub-classes ("asset class categories" *) and investments within those sub-classes.

Let's take your investment in Henderson Smaller Companies (HSL); a fine choice that has been, but how did you choose it? Didn't at least part of your thought process go something like, "hmm, I think UK small caps are likely to do better than UK mega caps, so let's find a good UK small cap vehicle"? I.e. did you not choose the asset sub-class first and then the investment within that sub-class?

As such, the first comparison is for your choice of sub-class: did UK small caps do better than UK mega caps? (tick). Then the next comparison is between your chosen vehicle (HSL) and others you could have chosen within the same sub-class to fulfill your choice of that sub-class (exercise left for the reader :D). There's no point in an apples vs oranges comparison with investments within the UK mega caps sub-class as you'd already rejected that whole sub-class and comparisons between any investments within it and HSL is clouded by your choice of sub-class.

Indeed, you (and FB) have, in fact, actually made this point yourselves in your comment re the FTSE 100 (the UK mega caps sub-class) compared to other sub-classes (global, the 250, etc), and that's really the crux of it.

As for the JP Morgan IT (JMF), which you switched to from a FTSE 250 tracker, that is precisely an example of how you chose the sub-class and then decided the vehicle (in this case, to stay) within it, and I don't see you saying JMF was a crap choice 'cos it only had a 12.55%pa TR vs HSL's 16.56%. You are (presumably) happy with JMF as a mid cap performer, even though it isn't as good as your small cap one.

(Whether your 250->JMF switch was a good 'un looks like a matter of when you did it ... longest chart available on DL (yes, capital only): http://mediacharting.digitallook.com/cg ... dicator_3=)

* (I've seen some authors say that the large caps, mid caps & small caps in any market are different asset classes, as are developed vs emerging equities, etc, etc, however most seem to call those asset class categories within the asset class of equities, and that's the way I think of them, except that I call them sub-classes instead, 'cos it's shorter :D)

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Re: City of London - is it worth it?

#157141

Postby Arborbridge » August 4th, 2018, 2:34 pm

scotia wrote:I looked at CTY in a recent re-organisation of my investments, and passed it by. I checked it out using Hargreave Lansdown's charting tool. Over 5 years its total return seemed to match a FTSE All-share tracker, and its 3-year performance was poorer. Over both 3 and 5 years CTY's TR was poorer than a FTSE 250 index tracker. Not much evidence of a Fund Manager adding value.


One must ask whether the FTSE tracker would give you the same income - supposing it's income you need. I don't know the answer, but I guess CTY would be better since its yield is usually higher. In the same way, my own HYP does not produce the same TR as an all share tracker, but prefer it because I achieve a high income than I otherwise would and the capital keeps growing. Since I do not intend to sell down that capital, an increase over RPI is sufficient unto the day.

And is the All-share tracker or 250 tracker the correct comparison?

Finally, I've been in this game long enough to have observed that whichever fund or method one chooses, one will always find something better. Not only that, but the "something better" frequently morphs every few years into something second or third rate. I've learnt that worrying about getting the very tippy-top best performer is a mug's game. and at my age I am content with a steady trust which fulfills my needs.


Arb.

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Re: City of London - is it worth it?

#157243

Postby Arborbridge » August 5th, 2018, 7:29 am

FredBloggs wrote:
vrdiver wrote:
FredBloggs wrote:But unfortunately, there are the true believers who will shout you down and pounce on any negative comments about their choice of fund manager.

At the end of the day if you prefer the warm fuzzy feeling of peer approval over real investment out performance, then go right ahead. Carry on. Suggestions of agenda's, some kind of unspecified personality defect or even a reluctance to post substantiated investment returns are, frankly hilarious and detract totally from the point of the thread. Again, carry on. Just get that warm fuzzy feeling from your closet tracker. Curtis is laughing at you. I certainly am, anyway.

Fred,
I've been reading this thread from the sidelines as CTY has interested me. I find it a bit offputting to read comments such as the one I've quoted. Normally your posts are informative and interesting, and I look forward to them, but not this.

To tell other posters "you are laughing at them" when they've posted factual results and an explanation of why they are happy with those results is, to put it mildly, beneath your usual quality of post.

If you have facts that diverge from those posted, I'd be interested to see them, or your interpretation of results, but not this.

Here's to a return to form, asap.

VRD

Noted, thank you. However, please think back a while where I previously did post clear unambiguous data that showed CTY was a tracker in the closet and that the manager in my opinion, failed to add any value at all. Sadly, it has become virtually impossible for me to post data from 3rd party sources without it being removed. Or I could easily demonstrate the closet tracker nature again.

Lastly, I don't mean to offend anyone. Perhaps laughing at you is a bit strong, but I struggle to think of another way of putting it. No offense intended and I do hope none is seriously taken.

Thanks for reading.

Bloggs.


I tend to agree with the comments VRD made, perhaps I've misunderstood you :) Maybe it's just your writing style, but I have to say that approach of (in my view) sniping from the sidelines does not promote a rational debate but tends to promote further controntation. Through your contributions, I see little in the way of hard fact but much which seems to suggest you have some sort of emotional dislike of one particular manager, but possibly most managers? Sniping from the sidelines does seem to describe it rather well.

I'm sorry to further personalise this, but as the old John Cleese line goes "Well, you started it" :lol: I'd prefer less harping on about Job Curtis and more appreciation of other people's situations or points of view. I'm not saying your views aren't valid (I'd agree, for example, that CTY isn't the best vehicle for growing a pot for younger investors) but fewer throw away comments and more factual ones may help your cause better.

I trust this comment is taken in the good spirit in which it was intended.

Arb.

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Re: City of London - is it worth it?

#157950

Postby richfool » August 8th, 2018, 3:38 pm

I have been reading this thread for a while, and wanted to throw in my two penneth, but didn't have much time and wasn't sure what I really wanted to say anyway! I think I have got my thoughts focussed now.

I think I understand Fred's point in that the capital growth performance of CTY has been relatively poor, and poorer than many of its peers. But that said the way I see it, there are two factors that one should keep in mind:-

(1) CTY pays an above average dividend yield (above 4%). and
(2) The capital growth of that sector (UK G&I) has also been poor.

Usually the type of investor who holds CTY will be looking for the dividend income and from the larger UK stocks.

It would be unfair to compare CTY with ITs from other sectors, such as global growth. Indeed if one is looking for a growth IT then CTY would not be the most suitable trust to hold. Most sectors "wax and wane" or have their time in the sun and then their time in the shade, so to speak.

I hold Temple Bar (TMPL) as well as CTY and note that TMPL has invariably performed better in growth terms than CTY, BUT CTY does pay a full 1% higher dividend yield. Thus I would suggest it is very much a case of "horses for courses", meaning you take your choice as to what your investment objectives are.

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Re: City of London - is it worth it?

#158222

Postby Julian » August 9th, 2018, 1:17 pm

Obviously CTY invests in equities and as such is inherently risky but with a record of increasing dividends for (I think) 52 consecutive years now it bears some comparison with an annuity-like income stream, admittedly not performing to any guaranteed increase such as a 3% p.a. or inflation-linked annual increases, but at least better than a flat/fixed-level annuity.

For people who are either too young to get a decent income from a conventional annuity (>3% p.a. non-fixed on initial capital invested), and that is pretty anyone under 55 in good health, or who does not want to sacrifice all their capital after any guarantee period has ended, CTY is probably as close as one gets to an equity income stream that delivers something like an annuity income stream. If CTY's capital growth doesn't set the world on fire I don't think it unreasonable to not wholly judge it against equity comparisons. CTY does of course have a higher risk profile than an annuity but one should at least give a nod to the annuity's forsake-all end of the capital-retention spectrum that some investors might otherwise be fishing in in their search for income.

- Julian

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Re: City of London - is it worth it?

#161211

Postby Avantegarde » August 22nd, 2018, 12:26 pm

Well, I decided to put my money where my mouth is. I sold my holding in CTY and put it in a Europe-ex UK tracker. My portfolio of ITs has now morphed into one where about a third of my money is now in fact in a group of very cheap trackers (covering N.America-S&P 500, FTSE All-Share, Pacific ex-Japan, World ex-UK and Europe ex-UK). Given the size of each holding, this will save me about £500 a year in charges which were levied by the (now replaced) ITs, while probably giving equivalent or even superior "total returns". Other ITs which I still hold, but which are on my black list for under-performance, are Murray International and Henderson International Income.

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Re: City of London - is it worth it?

#162152

Postby 88V8 » August 26th, 2018, 11:40 am

For me, two problems with fund managers.
First, the clash with my HYP.
Secondly that their aim is to not underperform, rather than to outperform. One has only to read the average pension fund annual report to see how underperforming managers are culled.
This conduces towards mediocrity.
So for me, ITs, not yet.

V8


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