Growth Portfolio IT picks

[Chukky]

Evening Fellow Fools,

I am in the process of constructing a Basket of IT's for growth in the long term - 15 years+

I've opted for the following sectors and IT's (I was thinking 4-7 holdings for manageability) starting with the list below:

Global:
Scottish Mortgage (SMT)
UK Equity:
Finsbury Growth and Income (FGT)
Emerging Markets:
JPMorgan Emerging Markets Inv Trust (JMG)
REIT
TR Property (TRY)

I have been through the data and financials and I am happy with the above.
I would be grateful for any opinions, particularly if I have missed something obvious or ignored a better IT in the same sector.

I am tempted to some add further categories e.g Flexible (Rothschild:RCP), UK Smaller Companies (Rights and Issues:RIII), Infrastructure (3IN) , Commodity based, Geographical (Japan is attractive nowadays), Industries (Biotech)
or should I double up on one of the categories I have selected already?

Lastly I was intending to split my investment evenly among each IT.

Perhaps with my timeframe the choices do not matter so much?

Thanks in advance,

Chukky

[Lootman]

I think you have a good eye for this, and I share several of those ideas and picks.

For biotech, I prefer the Biotech Growth IT to the International Biotech IT, because the latter has an odd distribution policy of paying out high dividends out of capital, which is useless for a growth investor.

I'd look for something specifically in IT. Something that has names like Apple, Amazon, Intel, Cisco, Google, MicroSoft, SalesForce etc. It's impossible to ignore the huge wealth creation in that area. SMT may cover that for you but I also like purely US-based NASDAQ funds for more direct exposure.

I would also invite you to look at ETFs if you are a theme-oriented investor. ETFs are probably the purest play on themes and high-level ideas.

The other area I don't see in your list is international small-cap, although I do like your Rights & Issues pick for the UK sector.

[Urbandreamer]

While I do have IBT, Lootman does make a good argument for passing them over.

You might like to consider BGSC for global smaller companines. ROBG is an interesting ETF take on the tech sector. Picks & shovels companies rather than the likes of Apple.
https://roboglobaletfs.com/holdings

I own all three mentioned, and a couple of others that might not suit you.

[Dod101]

I would add RCP and Caledonia. These are both very flexible straightforward family managed ITs, both of which have done very well for me. I tend to stay clear of any form of specialist because like tech, their fortunes wax and wane. Scottish Mortgage and Finsbury give you most of what you need and let the managers decide. The JP Morgan Emerging Markets Trust is fine but I would drop TR Property So those five would be my choice.

They will just sit there and tick away over the years, and of course any dividends will just be reinvested.

Dod

[EssDeeAitch]

Well this one may be OT as it is not an IT but Lindsell Train Global is an excellent fund. It is well worth researching; Google (or navigate through LT site) to read "Great Expectations" by James Bullock - an excellent insight into how they operate.

[scotia]

Well this one may be OT as it is not an IT but Lindsell Train Global is an excellent fund. It is well worth researching; Google (or navigate through LT site) to read "Great Expectations" by James Bullock - an excellent insight into how they operate.

Agreed - and Fundsmith is another fund worth looking at.
But to get back to ITs, Edinburgh Worldwide (EWI) fits the bill for Global Smaller Growth Companies - but it is volatile, and it is from the same stable (Baillie Gifford) as Scottish Mortgage - so you may not wish to concentrate too much with one Fund Management Company.

[mc2fool]

UK Equity:
Finsbury Growth and Income (FGT)

IF you are using a flat-fee broker who doesn't charge extra for OEICs you may want to go for the LF Lindsell Train UK Equity Fund instead. It's the OEIC version of FGT and is pretty much identical in all respects. They have the same TR performance and the same OCF and even the commentary in their monthly reports is word for word identical*.

The advantage of the OEIC over the IT, in particular for your "growth in the long term" objective, is that you can invest in the accumulation units of the OEIC and so don't have to fuss with (or pay for) reinvesting the dividends. You'll also avoid the current (small) premium FGT is currently on.

* https://www.lindselltrain.com/~/media/Files/L/Lindsell-Train-V2/reports/lt-uk-fund/2019/LTUK_MR_2019_01.pdf
https://www.finsburygt.com/files/1215/5006/6202/FGT_Factsheet_January_2019.pdf

[MaraMan]

I agree with the advice given so far. For what its worth my SIPP is invested in;
Starter - RIT Capital & Caledonia
Main course - Fundsmith, Finsbury Growth and Income & Lindsell Train Global Equity Fund
Dessert - Scottish Mortgage & Monks
Side orders - a very few individual growth shares I like

MM

[doug2500]

No disagreement with what's been suggested, but you may also like to consider Allianz Technology trust for exposure to tech. It is not the same thing as SMT but does cover tech, has a good record but is lesser known and mentioned.

Montanaro European smaller companies might tick a box for you too, or Jupiter European opportunities (I plumped for the former)

[Lootman]

Well this one may be OT as it is not an IT but Lindsell Train Global is an excellent fund.

There is also the Lindsell Train investment trust (LTI). It's a bit of an oddity in that it holds a large position in the fund management company itself, which is a private entity and therefore otherwise not possible to invest in.

It's actually my top performing fund of any type over the last decade or so, and my position is now worth six times the original cost. However you have to be careful both with the premium to NAV, and with the spread which can be large as the shares are not that liquid.

FGT, as mentioned, is the other proxy in IT form, although not as exciting as LTI.

[Dod101]

I might have added Smithson considering that it has risen by more than 10% since launch towards the end of last year. It is really too early to judge though, as Chou En Lai did not say about the French Revolution.

Dod

[Chukky]

Thank you all for the wealth of knowledge and advice in the matter of a few hours.

It has given me further food for thought and a little more reading to do.

I've learned a lot in under a month of joining TLF and again am really grateful to have found it after the old TMF forums were consigned to memory.

If anything, I will stick to a small(ish) basket, I may throw in a fund and ETF for good measure too following the suggestions above

I'll post my choices here soon.

Thank you all again!

[Chukky]

The inclusion of Smithson and Lindsell Train Global in several of the suggestions above was very intriguing.

I agree with the advice given so far. For what its worth my SIPP is invested in;
Starter - RIT Capital & Caledonia
Main course - Fundsmith, Finsbury Growth and Income & Lindsell Train Global Equity Fund
Dessert - Scottish Mortgage & Monks
Side orders - a very few individual growth shares I like

MM

I think you have an excellent portfolio there and also loving the 3-course meal analogy

I wonder if anyone has come across PensionCraft's take on these active funds?
I really like the way Ramin presents thae data in this one.

"Which is the Best UK Active Fund: Lindsell Train, Fundsmith or Vanguard Value?" - sorry I am not able to post the link yet, but its worth a Google

I am investing in a SIPP with Vanguard trackers elsewhere and I was planning to add Vanguard Value (VVAL) which is a very well diversified passive fund that has similar (if not stellar) performance when compared with Smithson / Lindsell Train Global

No doubt the latter are far 'sexier' but do they have mileage?

[Raptor]

I think you have an excellent portfolio there and also loving the 3-course meal analogy

I wonder if anyone has come across PensionCraft's take on these active funds?
I really like the way Ramin presents thae data in this one.

"Which is the Best UK Active Fund: Lindsell Train, Fundsmith or Vanguard Value?" - sorry I am not able to post the link yet, but its worth a Google

I am investing in a SIPP with Vanguard trackers elsewhere and I was planning to add Vanguard Value (VVAL) which is a very well diversified passive fund that has similar (if not stellar) performance when compared with Smithson / Lindsell Train Global

No doubt the latter are far 'sexier' but do they have mileage?

you mean this one from Pensioncraft.

Raptor.

[EssDeeAitch]

The inclusion of Smithson and Lindsell Train Global in several of the suggestions above was very intriguing.

I wonder if anyone has come across PensionCraft's take on these active funds?
I really like the way Ramin presents the data in this one.

"Which is the Best UK Active Fund: Lindsell Train, Fundsmith or Vanguard Value?" - sorry I am not able to post the link yet, but its worth a Google

Good video indeed and worth watching - here is the link. https://www.youtube.com/watch?v=MQT5TOs2Bg0

[MaraMan]

Thanks for reminding me about that video, hadn't seen it in a while. It is a little long in the tooth now, but interesting none the less.

I have been very happy with Fundsmith's performance, and while I am no expert on the Vanguard Value fund I think Fundsmith's returns have generally been better. Fundsmith is my second best performer after Scottish Mortgage. Anyway best of luck to those who prefer passive investments, each to their own.

I was a little put off of SSON after holding FEET for a little while and also seeing what happened with Woodford's Patient Capital Trust. It feels to me that SSON is a bit of way off of what Terry Smith and gang do best in Fundsmith.

MM

[monabri]

The inclusion of Smithson and Lindsell Train Global in several of the suggestions above was very intriguing.

I wonder if anyone has come across PensionCraft's take on these active funds?
I really like the way Ramin presents the data in this one.

"Which is the Best UK Active Fund: Lindsell Train, Fundsmith or Vanguard Value?" - sorry I am not able to post the link yet, but its worth a Google

Good video indeed and worth watching - here is the link. https://www.youtube.com/watch?v=MQT5TOs2Bg0

Yes, +1 for Pensioncraft.

[Backache]

I was a little put off of SSON after holding FEET for a little while and also seeing what happened with Woodford's Patient Capital Trust. It feels to me that SSON is a bit of way off of what Terry Smith and gang do best in Fundsmith.

MM

Personally I have put a little money into Smithson.
I do see why FEET would put you off but I don't think Woodford Patient Capital bears any resemblance in either philosophy or altered philosophy. WPCT was a radically different affair looking at venture capital and start ups and was very different to his previous funds .
Smithson claims to essentially use the same philosophy and selection process as Fundsmith but on small to medium sized companies that cannot for liquidity reasons be held in the main fund of a very large open ended fund.
The things that would be more likely to make me hesitate are that it currently stands at a modest premium to NAV and it is not actually managed by the main Fundsmith team.
However with historically higher returns coming from smaller companies and smaller companies apparently trading on a valuation discount to larger ones I am happy to stick with them.

(PS I have also retained an interest in FEET, I rarely sell unless something is obviously not working and I'm not sure about FEET yet it has really yet to experience a full market cycle , it has made money even though it has under-performed the index)

[doug2500]

I think I'll be a long term holder of FEET and I'd make two points:

1 It's really very different to the index in country and sector allocation

2 I view it as almost an India trust being over 40% invested there, although I appreciate that may well change I suspect it will have a heavy weighting for a while, by dint of it's low activity policy if nothing else.

[Backache]

For those interested in Smithson there is an interim financial report just released explaining their strategy.
https://smithson.co.uk/latest-news/news ... %3a056691R