Bankers IT

[OLTB]

Evening all

I have recently invested a lump in Bankers but just seeing the previous post on FRCL made me think if I had made the right call. Both seem to be invested globally in companies designed for growth and income and I was just after some assurances that Bankers should be an ok investment over the medium term 15 years or so (I know that no one can guarantee performance, just some crumbs of comfort will do!). I thought out of all of Luni’s B8 (I think) choices, Bankers was a good catch-all type of IT which is what I was after. To invest and forget.

Cheers, OLTB.

[UncleEbenezer]

To invest and forget.

Well, you can invest and forget. Or you can agonise and discuss here. But I don't see how you expect to do both at once, regardless of where your investment may be.

FWIW, I have a few quid in Bankers IT. It has never lost me sleep.

[flint]

I hold both Bankers and FRCL.
FRCL is more skewed towards the US than Bankers.
Accordingly, it has performed better in the recent past.
Morningstar rates both managers as Silver.
Of the two, I feel that Bankers is the better " invest and forget " choice.

Flint

[OLTB]

Thanks both - invest and forget was perhaps the incorrect phrase. I have a new IT portfolio that is about 18 months old and after saving up a relatively small lump sum wanted an IT that had a global view rather than sector specific. I’m sure I will agonise every now and then but thanks for your comments - I’ll post the full portfolio in a week or so for further interrogation....

Cheers, OLTB.

[Avantegarde]

Investing in a big, low-cost, global IT such as Bankers or F&C is a good idea. I did, a few years ago, and the 5-year total return (share price growth with dividends reinvested) has been good: 81% in the case of Bankers and 121% in the vase of F&C. The big lesson I have learned, from my portfolio of ITs which I set up five years ago, is that you need to keep an eye on them, at least every six months. That is because supposedly reliable ones with a good track record can go off the boil and start producing the same total returns as a tracker fund but for much greater costs. In some cases they can produce poorer returns for much higher costs. In that time I have dumped Witan Pacific, Henderson Far East, Aberdeen Asian Income, Merchants, City of London and North American Income because they all, over those five years, returned less than a comparable index fund while generally charging me ten or 15 times times the annual charges levied by a tracker (1% p.a. compared to 0.1% p.a.). My own portfolio has therefore morphed from being one of 13 or 14 ITs, to one of 16 holdings, a third of which are now trackers funds. The second biggest lesson I have learned about ITs is that they do not necessarily do what they say on the tin. Many with the word "income" in the title fail to raise their dividends faster than RPI or even CPI inflation, for instance. What use is that? The best source of information is the AIC website https://www.theaic.co.uk/aic/find-compa ... -companies which is full of important comparative statistics about every IT which can help you select your investments. Use it.

[Hariseldon58]

I am sure Bankers will turn out fine in the long term , as would F&C, Alliance or Witan.

@Avantegarde as regards a global tracker that would probably turn out fine as well.

When Investment Trusts underperform it can well be that they follow a style of investing that is currently having a bad run and over time will mean revert , this often turns out well in the long run and during a period of underperformance the discount may well widen and provide a buying opportunity. If a manager of a well established Trust is really doing badly then the directors may well look to change.
An established trust can rely on being a closed fund and is not forced to liquidate positions and with judicious use of gearing It generally seems that the Big trusts on the whole perform well.

My personal preference is more towards the world tracker but if a good generalist Trust falls to a favourable discount then these are a great choice and have worked out fine for me over many years.

[Dod101]

Investing in a big, low-cost, global IT such as Bankers or F&C is a good idea. . The big lesson I have learned, from my portfolio of ITs which I set up five years ago, is that you need to keep an eye on them, at least every six months. That is because supposedly reliable ones with a good track record can go off the boil and start producing the same total returns as a tracker fund but for much greater costs. In some cases they can produce poorer returns for much higher costs. In that time I have dumped Witan Pacific, Henderson Far East, Aberdeen Asian Income, Merchants, City of London and North American Income because they all, over those five years, returned less than a comparable index fund while generally charging me ten or 15 times times the annual charges levied by a tracker (1% p.a. compared to 0.1% p.a.).

I see you have got some recs for this post. Not sure I agree however because no share (and an IT is just a share after all) is going to keep on an ever upwards trajectory without some set backs. It has been proved to my satisfaction anyway that trading in and out of shares seldom works very well because of the costs involved and the not so small matter of market timing. If you have a portfolio of ITs then there is nothing wrong in my book with modestly changing it from time to time but overall I think you are probably better off choosing good generalist ITs and simply forgetting about them. Quite a few of those that you mention you have dumped are specialists which are volatile by nature and you need to recognise that before you start. Again you have the problem of market timing and cost. I am no great believer in for instance City of London but it seems to have had a decent if unspectacular record over many years. Few ITs will behave like say Scottish Mortgage and even it is bound to stumble at some point but the results over the last three or four years have been spectacular so we need to expect that and accept the likelihood. Its costs are about the lowest in the market.

As for costs, smaller specialist trusts are more expensive than the big ITs but I am sure that City of London for instance is well below 1%.

Dod

Moderator Message:
corrected quotes. Raptor

[richfool]

Following on from the above, I would agree with Dod. I don't see it so much as IT's "going off the boil", more usually a case of things like: that particular sector being out of favour; or the Manager taking a view/position on the market that has yet to "bear fruit".

For example, in the case of the former, EM's have become out of favour partly because of dollar strength. In the case of the latter, for example, the Manager of Temple bar is a value investor and has taken positions (made investments) where he sees value, but that those currently undervalued stocks have yet to recover/revalue. (His day is yet to come, - at least I hope so, as I hold TMPL!)

One could argue that some UK G&I trusts have lost momentum because of Brexit concerns. Or in the case of the US sector, perhaps it is about to take a breather after a long run.

AS Dod says, no Manager is going to be top performer and shooting the lights out all the time. Sectors and the IT's within them "wax and wane" according to market sentiment and macro matters, thus I am not too quick to ditch IT's simply because their momentum has slowed or even stopped for a time. After all, that's why we diversify our holdings.

Getting back to the OP's question, I doubt he will go far wrong with either FRCL or Bankers. In that sector (global growth), I hold FRCL and Witan.

OLTB, there is a thread about global growth IT's (albeit with a technology emphasis) here:

viewtopic.php?f=54&t=11968

[richfool]

I just rediscovered this thread.

Ironically, I recently added bankers (BNKR) to my portfolio. I already hold Witan in that sector. Both have suffered somewhat in the latest market falls. (Holdings that include US technology stocks won't have helped). I am thinking that maybe I should have kept to global growth & income trusts (for reduced volatility/vulnerability).

[richfool]

Evening all

I have recently invested a lump in Bankers but just seeing the previous post on FRCL made me think if I had made the right call. Both seem to be invested globally in companies designed for growth and income and I was just after some assurances that Bankers should be an ok investment over the medium term 15 years or so (I know that no one can guarantee performance, just some crumbs of comfort will do!). I thought out of all of Luni’s B8 (I think) choices, Bankers was a good catch-all type of IT which is what I was after. To invest and forget.

Cheers, OLTB.

I have just been reviewing global growth trusts and came across this thread, I wondered if you have any updates or revised thoughts on your choice of Bankers trust in that sector? I appreciate it is early days yet, and you may not be revisiting the choice for some years yet!!

I am currently looking at Mid Wynd in that sector. Noted that Bankers and FRCL have higher dividend yields.

[OLTB]

Evening all

I have recently invested a lump in Bankers but just seeing the previous post on FRCL made me think if I had made the right call. Both seem to be invested globally in companies designed for growth and income and I was just after some assurances that Bankers should be an ok investment over the medium term 15 years or so (I know that no one can guarantee performance, just some crumbs of comfort will do!). I thought out of all of Luni’s B8 (I think) choices, Bankers was a good catch-all type of IT which is what I was after. To invest and forget.

Cheers, OLTB.

I have just been reviewing global growth trusts and came across this thread, I wondered if you have any updates or revised thoughts on your choice of Bankers trust in that sector? I appreciate it is early days yet, and you may not be revisiting the choice for some years yet!!

I am currently looking at Mid Wynd in that sector. Noted that Bankers and FRCL have higher dividend yields.

Hi Richfool and thanks for the comment above.

So far so good! I have bought into Bankers at a few intervals paying 796.75p, 892.99p and 841.80p. Capital wise, the fund is up 9.53% and slowly increasing dividends also dribbling in which is good to see. Capital has been in negative territory though, but that's only to be expected in the early stages and I will stick with it, as I have many years to go before I need to call on the capital/income. I may diversify into FCIT eventually, but only when capital is more meaningful.

Cheers, OLTB.

[XFool]

Just a quick comment here - and a warming!

I use XIRR to evaluate the performance of my share holdings over time. A surprisingly disappointing recorded XIRR of 2.5% for my long term holding of Bankers IT (originally through the Henderson IT Savings Scheme) had it pegged for a sell recently: likely this coming week.

While updating and auditing my XIRR sheets I stumbled across a couple of the dates in the BNKR XIRR table being 'Not a Date'. When corrected, the XIRR showed a much healthier long term value of 12.7%. So the sale is off.

[scotia]

Bankers Total Return over 1, 3, and 5 years, compared with a Developed world Tracker ETF (Vanguard VEVE)



(Today's Data from Hargreaves Lansdown )

I built up a Banker's holding around 5 to 6 years ago, then sold up over the past 3 years. My XIRR was 6.14%

[GrahamPlatt]

Just a quick comment here - and a warming!

While updating and auditing my XIRR sheets I stumbled across a couple of the dates in the BNKR XIRR table being 'Not a Date'.

I saw a picture of a Venn diagram recently. Two circles labelled “Incel” and “Excel”, the overlap bearing the text “Incorrectly assuming something is a date”.

[monabri]

Just a quick comment here - and a warming!

While updating and auditing my XIRR sheets I stumbled across a couple of the dates in the BNKR XIRR table being 'Not a Date'.

I saw a picture of a Venn diagram recently. Two circles labelled “Incel” and “Excel”, the overlap bearing the text “Incorrectly assuming something is a date”.

Shouldn't that be in Laughing Lemons?




BNKR holder from Aug 2019 to June 2023..XIRR of 3.6%. Dumped for the same reason as put forward by Scotia, above.

[XFool]

Bankers Total Return over 1, 3, and 5 years, compared with a Developed world Tracker ETF (Vanguard VEVE)



(Today's Data from Hargreaves Lansdown )

I built up a Banker's holding around 5 to 6 years ago, then sold up over the past 3 years. My XIRR was 6.14%

Looking at that 5 year total return of 69.8% and uncompounding it, I make that:

(1.698) ^1/5 = 1.1117, or 11.2%

So, maybe I should stick with my 12.7% from BNKR? (Here based on figures going back to 2009)

As ever, it all depends on the starting price and the current price, doesn't it?

[monabri]

Bankers Total Return over 1, 3, and 5 years, compared with a Developed world Tracker ETF (Vanguard VEVE)



(Today's Data from Hargreaves Lansdown )

I built up a Banker's holding around 5 to 6 years ago, then sold up over the past 3 years. My XIRR was 6.14%

Looking at that 5 year total return of 69.8% and uncompounding it, I make that:

(1.698) ^1/5 = 1.1117, or 11.2%

So, maybe I should stick with my 12.7% from BNKR? (Here based on figures going back to 2009)

As ever, it all depends on the starting price and the current price, doesn't it?

2009 wasn't a bad time to buy...remind what was happening about that time

[ADrunkenMarcus]

The 2023 annual report for Bankers gives a breakdown of its performance, including total return over 15 years on a net asset value and share price basis against its benchmark FTSE World Index. The net asset value return is ahead over 10 and 15 years despite recent underperformance; the share price is ahead over 15 years but not 10 years, probably due to the 13%+ discount to net asset value Bankers is now trading at.

In terms of dividends, it has thrashed inflation over the decades since 1973. The 2022 dividend increased 7%, the 2023 dividend increased 10% and the 2024 dividend is expected to rise by a minimum of 5%, so I suspect the dividend will at least have kept ahead of inflation over these three years.

There are worse times to buy than when it's trading at a significant discount.

Best wishes


Mark.

[tacpot12]

Off the back of this thread I have been reviewing my own holding of Bankers IT. I bought my holding six years ago as basket of 14 ITs and EFTs after following Luiversal's B7 and B8 threads on The Motley Fool.

I have decided that its yield in not good enough compared to the other options and have sold all my holdings today and bought MYI instead.

[XFool]

Looking at that 5 year total return of 69.8% and uncompounding it, I make that:

(1.698) ^1/5 = 1.1117, or 11.2%

So, maybe I should stick with my 12.7% from BNKR? (Here based on figures going back to 2009)

As ever, it all depends on the starting price and the current price, doesn't it?

2009 wasn't a bad time to buy...remind what was happening about that time

True. To be entirely fair, I didn't even "buy" my then holding at that price - though dividend reinvestment was in operation for a year or so - rather it was the transfer value of BNKR at the time of its transfer from Henderson Global Investors when their IT savings closed.

I could still possibly do a true XIRR calculation all the way back, if I made the effort to find the old Henderson paper statements. Maybe I will one day.