A copy of a post made on the Macro & Global Topics board, under Brexit
viewtopic.php?f=76&t=15033&p=258515#p258515
Partly with Brexit in mind, I carried out the following transactions over recent days and weeks:
IT's:
Sold CTY - mainly due to its poor capital performance over recent years, along with the fact that, for my liking, it held too much in oil companies and banks, plus the fact that it was trading at a premium.
Topped up MUT (Murray Inc Trust) which had a better capital performance, was at a discount and a yield of 4+%.
Topped up Mercantile ( a mid cap focussed IT), to capitalise on a Brexit outcome.
Topped up TRIG - renewable energy trust
Sold NAIT - to reduce direct exposure to the US
Topped up JPGI to increase global exposure (inc US)
Topped up MATE - multi-asset trust
STOCKS:
Topped up ULVR as it had fallen back significantly
Topped up PRU as it had fallen back significantly and is due to split M&G off.
Added POLY (Polymetal Intl), a gold (and other metals) miner, for some geared exposure to the gold price and in anticipation of a possible recession.
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Tinkerings in anticipation of Brexit
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Re: Tinkerings in anticipation of Brexit
Interesting. I’ve sold a few individual holdings recently (Vodafone, Petrofac, SSE and Babcock), also with a looming Brexit casting a shadow over those decisions, but I’d not considered dumping any ITs altogether.
Both ITs you’ve sold are among those I hold. In times of uncertainty I’ve looked upon ITs as a safer choice, as they’re less impacted by individual share movements.
I’ve therefore spread the proceeds of my sales across a dozen ITs.
Wasron
Both ITs you’ve sold are among those I hold. In times of uncertainty I’ve looked upon ITs as a safer choice, as they’re less impacted by individual share movements.
I’ve therefore spread the proceeds of my sales across a dozen ITs.
Wasron
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Re: Tinkerings in anticipation of Brexit
Wasron wrote:Interesting. I’ve sold a few individual holdings recently (Vodafone, Petrofac, SSE and Babcock), also with a looming Brexit casting a shadow over those decisions, but I’d not considered dumping any ITs altogether.
Both ITs you’ve sold are among those I hold. In times of uncertainty I’ve looked upon ITs as a safer choice, as they’re less impacted by individual share movements.
I’ve therefore spread the proceeds of my sales across a dozen ITs.
Wasron
Wasron, I certainly do see IT's as a safer choice. My "tinkering" was intended to adjust my asset allocation, take advantage of Brexit opportunities, improve performance, increase defensiveness and one I should have added - to reduce my number of holdings.
I preferred MUT to CTY because of its past performance, its holdings and their respective discount/premiums.
NAIT I have jumped in and out of a couple of times. In the end I decided to sell it, on the assumption that the US is overvalued, could be moving towards a recession, and that as NAIT invests almost exclusively in the US, the manager has no alternative in the event of the market falling there. Whereas, although global trust have exposure to the US (and significantly so), the manager can adjust that if they deem it appropriate, - i.e. there are alternatives. Similarly with multi-asset trusts. Thus I redirected the proceeds into JPGI and MATE., which also have higher yields. Also NAIT is a smaller trust which tends to have a larger spread between buying and selling prices.
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Re: Tinkerings in anticipation of Brexit
That all makes sense, but if I start swapping between ITs it’ll take me down a road I’m trying to avoid. I’m impulsive enough as it is with my individual holdings!
My sales were also a conscious decision to reduce the number of holdings and I resisted the urge to buy a new IT, at 15-ish I think I have enough diversification.
Still no idea what’s most likely to happen on Oct 31st so renewables, uk-based, global, North American ITs, they all got some cash.
Wasron
My sales were also a conscious decision to reduce the number of holdings and I resisted the urge to buy a new IT, at 15-ish I think I have enough diversification.
Still no idea what’s most likely to happen on Oct 31st so renewables, uk-based, global, North American ITs, they all got some cash.
Wasron
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Re: Tinkerings in anticipation of Brexit
The main influence seems to have been the rise in Sterling. Maybe it's just as well to leave well alone.
TJH
TJH
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Re: Tinkerings in anticipation of Brexit
The best riser amongst my holdings has been Mercantile (UK mid caps), which I take to be a Brexit related rise. RGL REIT also perked up a couple of pence. Domestic focused stocks generally responding to Brexit optimism.
Re: Tinkerings in anticipation of Brexit
Interesting dilemma as to whether one should leave alone or adjust. Having taken the opinion that Brexit is not done as yet, reduced holdings of National Grid, Pennon and British Land yesterday which have increased handsomely in the last week or so. Would probably be happy to buy back if price falls enough, maybe in the 7-10% region.
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Re: Tinkerings in anticipation of Brexit
I sold Mercantile (MRC) on Friday and just swapped it with Vanguard's 250 tracker (VMID) until things calm down. I bought MRC in the summer at a 13.9% discount so selling at around a 3.4% discount was just too much of a gift horse. Though, there were other factors e.g. don't mind crystallising the capital gain outside my ISA/SIPP this year.
Mercantile does seem to offer more upside than the FTSE 250 as a Brexit play - no surprise since it doesn't own the foreign focused ITs within the FTSE 250. On Friday 11th October when Mercantile share price was up 8.4% and the FTSE 250 rose 4.3% the NAV of Mercantile showed an uplift of 5.1%.
If British focused stocks rise spectacularly from here, before Mercantile (or a host of other well managed mid-cap focused Trusts, a couple of which I hold) widen in discount again, then my trade into a tracker may not be beneficial. I'm happy with that trade off.
mm
Mercantile does seem to offer more upside than the FTSE 250 as a Brexit play - no surprise since it doesn't own the foreign focused ITs within the FTSE 250. On Friday 11th October when Mercantile share price was up 8.4% and the FTSE 250 rose 4.3% the NAV of Mercantile showed an uplift of 5.1%.
If British focused stocks rise spectacularly from here, before Mercantile (or a host of other well managed mid-cap focused Trusts, a couple of which I hold) widen in discount again, then my trade into a tracker may not be beneficial. I'm happy with that trade off.
mm
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