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John Baron's swap from SMIF to HDIV

Closed-end funds and OEICs
chevin
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John Baron's swap from SMIF to HDIV

#201245

Postby chevin » February 14th, 2019, 9:11 am

I notice that John Baron, in his monthly article for Investors Chronicle, has swapped out of Twenty Four Select Monthly Income (SMIF) into Henderson Diversified Income (HDIV). Unfortunately, there appears to be no explanation as to why - his dealings on his model portfolios coming as a small adjunct to the rest of his article.

I'm somewhat of a novice (near complete!) when it comes to fixed interest, having focused primarily on equities, but with retirement now upon me, I'm trying to understand some of the ins and outs, particularly with investment trusts, where I've increasngly focused my portfolio. So...I'd appreciate thoughts as to why he would do that swap now. As far as I can see, SMIF is mostly about asset backed debt, whilst HDIV has little of that, and is 3/4 in corporate bonds, two-thirds of which are high yield, and one-third investment grade.

Hariseldon58
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Re: John Baron's swap from SMIF to HDIV

#201372

Postby Hariseldon58 » February 14th, 2019, 3:59 pm

Not quite on topic but I looked to add SMIF to my high yield assets in 2018 but Hargreaves Lansdowne prohibited purchase by private investors...
I was not given an explanation and I subsequently noted John Baron 'sold' holdings in January 2019.

I understand he wished to reduce exposure to Higher Yielding European bonds and HDIV had a different profile of holdings.

MaraMan
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Re: John Baron's swap from SMIF to HDIV

#201378

Postby MaraMan » February 14th, 2019, 4:09 pm

Yes I noticed that too, JB's portfolio's have guided some of my holdings, including SMIF (which I bought in Jan 18 through HL). I am surprised HL are now prohibiting purchase of SMIF as they didn't last Jan.

I agree reducing exposure to euro bonds is wise, but have not done anything yet. Will keep it under review.

MM

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Re: John Baron's swap from SMIF to HDIV

#201537

Postby TurboukToo2 » February 15th, 2019, 11:39 am

Equally curious why the change from SMIF to HDIV. Some rationale from Mt Baron would be useful.

Just tried to "buy" SMIF on Hargreaves and got the following:

"TwentyFour Select Monthly Income Fund Limited Ordinary 1p is a complex investment
Before you buy this stock, please complete the questionnaire for general complex investments so we can check your understanding of this type of investment.

If you have completed a questionnaire before, we are asking you to complete it again. This is because, following new rules which came into force in January 2018, we changed the way we treat complex investments and introduced new questionnaires for each type of complex investment our clients wish to buy.

Please continue to the key risk information which will be followed by the questionnaire."

PrefInvestor
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Re: John Baron's swap from SMIF to HDIV

#201694

Postby PrefInvestor » February 16th, 2019, 7:13 am

I am with HL and used to hold SMIF but I got out when back in October 2018 I found that it could no longer be traded online only over the phone. I have no idea what caused this change but I didn’t want to be stuck with an investment that I could only trade over the phone at the increased dealing charges that apply in that situation. I haven’t tried it again since as I have no plans to return. Prices have steadily dropped from close to 100p to just over 90p far outweighing the yield IMV.

The questionnaires that need to be completed to trade certain investments don’t seem to be any big deal, I have done a couple in the past. Suspects a MIFID 2 thing ?

With SMIF I was always concerned about the liquidity. As I recall I think the KID document said that there are no market makers for the security, which I took to mean that the only liquidity was provided by the market in terms of other trades being done on the day. They also have this tender offer feature which pops up regularly offering to let investors sell their holdings at a couple of percent BELOW NAV - so a loss in most cases, especially when trading at a premium. The only reason I can see for doing this is if you have a very large holding and can’t trade them any other way due to lack of liquidity ?. I never had a problem with my smallish holding but I was always a bit worried about getting stuck with a holding that I couldn’t sell. And then the no online dealing changed happened and that was the last straw for me. I sold at that point.

ATB

Pref

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Re: John Baron's swap from SMIF to HDIV

#201701

Postby PrefInvestor » February 16th, 2019, 8:35 am

Just out of interest I took a moment this morning to see if I could trade SMIF online with HL, and it would appear that as of today you can (I could have placed a limit order anyway). So I dont know what caused the move to telephone trading last October, all I can tell you is that it definitely happened, but now seems to have been reversed.

I also took another look at the KID looking for the comment I saw before about market makers, and I could see no trace of that either. I am sure thats where I saw it before - but it would appear that it isnt there anymore.

ATB

Pref

PS after posting the above I also googled "SMIF market makers" and located the following page which says that NUMIS are acting as market makers for SMIF. So just maybe a few things have changed since I was holding ?.

https://www.numiscorp.com/x/ic-market-making.html

Dod101
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Re: John Baron's swap from SMIF to HDIV

#202201

Postby Dod101 » February 18th, 2019, 9:55 pm

Writing of JB's Column, I have often wondered how Scottish Mortgage can be in his income portfolio. Total mystery to me, so if someone gets the opportunity to ask at the Mello meeting, I would certainly like to know.

|Dod

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Re: John Baron's swap from SMIF to HDIV

#202203

Postby Silverstar64 » February 18th, 2019, 10:48 pm

I am a client of HL and can confirm that I have been able to trade SMIF online after completion of the 'complex investments' questionnaire. I have added fixed interest to provide some diversification and must say that the fund manager of SMIF share some very interesting analysis in their blogs and client emails. Oddly you need a work email to subscribe for automatic updates.

I hold both HDIV and SMIF and at this time am not following JB's lead out of SMIF.


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