City of London - is it worth it?

[richfool]

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.

Avantgarde, for the purposes of comparison, what is the yield being paid on the trackers that you are using in lieu of CTY, and on the Europe-ex UK and the FTSE All-share (trackers)?

[Hariseldon58]

@Avantegarde

Interesting that you have gone to an approach I have favoured over recent years with some success, (low cost international trackers) but I am looking to make movements in the other direction, several IT’s that have value approaches have under performed, have higher discounts now and given the weakness of sterling, we have the makings of interesting investment opportunities in the UK Investment Trust sphere.

City of London has done its job consistently and I did hold it for many years but I felt there were better alternatives in UK investments.

City of London has made much of its yield and dividend history and has a small premium, it has got the message out successfully and clearly has its fans, but there are alternatives and these may have a great investment policy which is simply unrewarded in current market conditions. These alternatives, ( I am looking at value investment themed trusts), may well outperform in the future ( as a bonus they are at an attractive discount to NAV) and value investments have a long history of outperformance, aligned with lengthy periods when it does not work.

It doesn’t hurt to have an open mind.....consider that comparing investments solely on what has happened in recent periods will not tell you about the future.

Clearly some investment trusts are a discount for a good reason, their investment process may be deeply flawed but I find that looking at previous reports tells you a lot about a managers style, how robust and consistent is the approach, etc. its time consuming but can be very rewarding.

[Arborbridge]

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

First, the clash with my HYP. Why not just have them in a separate basket? I'm not sure what you mean by "clash" - perhaps because they own some shares in common? I just do not see that as a problem.

Culling underperforming managers? - like cutting your loser and running your winners

I guess you must have compared your own HYP performance with a basket of ITs, let's say on the metric of capital growth per unit and also income per unit or perhaps XIRR? If you are consistently outpacing those other managers, well done. If you haven't measured the difference, you wouldn't know. I can tell you frankly, my HYP is consistently near the bottom of the bunch - let's say rather like Murray Income IT.

Arb.