In what would you invest?

[Avantegarde]

I have sold my £10,000 holding in the BMO Global Smaller Companies trust. It has been a dreadful dog for the past two and three-quarter years in which I have been invested, so I am cutting my losses. Which trust or fund would you invest in for international shares? I already have holdings in Scottish Mortgage, Bankers, F&C and Edinburgh Worldwide and don't wish to increase those holdings. What would you do?

[TUK020]

I have sold my £10,000 holding in the BMO Global Smaller Companies trust. It has been a dreadful dog for the past two and three-quarter years in which I have been invested, so I am cutting my losses. Which trust or fund would you invest in for international shares? I already have holdings in Scottish Mortgage, Bankers, F&C and Edinburgh Worldwide and don't wish to increase those holdings. What would you do?

This is worth a look:
https://www.itinvestor.co.uk/2020/06/20 ... -compared/
It is evaluating ITs over a several decade time perspective.

From other threads discussing ITs with significant family money invested performing well, the names RIT Capital Partners and Caledonia Investments cropped up repeatedly.
I have just bought into both of these with an eye for the long term.

[bluedonkey]

The obvious ones are Murray International, Witan. A bit boring perhaps.

[scotia]

How about choosing a world tracker ETF (e.g. Vanguard VWRL)
Then you won't have to support the ******* life styles of ******* Fund Managers. E.G. Total return over 5 years:-
Vanguard VWRL ETF 95.6%
Murray International IT 49.1%
Witan IT 45.4%
RIT Capital IT 32.7%
Caledonia IT 29.7%
But from the recommendations that you have received for the above managed ITs, it would appear that others are keen to ensure that these IT Managers will continue to receive their ******* remuneration.
(Numbers from Hargreaves Lansdown)

Moderator Message:
I have removed the **** bits. Please avoid writing things that could cause legal action. regards, dspp

[Avantegarde]

How about choosing a world tracker ETF (e.g. Vanguard VWRL)
Then you won't have to support the ******* life styles of ******* Fund Managers. E.G. Total return over 5 years:-
Vanguard VWRL ETF 95.6%
Murray International IT 49.1%
Witan IT 45.4%
RIT Capital IT 32.7%
Caledonia IT 29.7%
But from the recommendations that you have received for the above managed ITs, it would appear that others are keen to ensure that these IT Managers will continue to receive their ******* remuneration.
(Numbers from Hargreaves Lansdown)

Moderator Message:
I have removed the **** bits. Please avoid writing things that could cause legal action. regards, dspp

I owned a global tracker but sold earlier this year because it was so heavily exposed to the USA - about 60% if I remember correctly. Some of my ITs are also heavily invested there, but I wanted to ease back. I fear that the Covid pandemic in the USA, a country led by easily the worst person in living memory ever to be elected as the leader of an "advanced" economy, means that country, and its economy/stock market, will suffer greatly in the coming year or so.

[baldchap]

How about ATST, JGGI or my favourite SAIN?

I notice Scotia didn't choose these to compare to VWRL.
I have nothing against ETF's but lets be fair.

[scotia]

I owned a global tracker but sold earlier this year because it was so heavily exposed to the USA - about 60% if I remember correctly. Some of my ITs are also heavily invested there, but I wanted to ease back. I fear that the Covid pandemic in the USA, a country led by easily the worst person in living memory ever to be elected as the leader of an "advanced" economy, means that country, and its economy/stock market, will suffer greatly in the coming year or so.

Ok - that seems worth considering. But the USA is so large a portion of the World market, that if it sneezes then the rest of the world will catch a cold. So its difficult to know how you can insulate yourself from such a risk. There are ITs which are intended to provide some risk cover - but in my experience they suffer from such a low growth that accepting the risk of a higher growth fund seems preferable. But that policy may not suit everybody.
Traditionally a Bonds investment would be used to reduce risk, but with current extremely low interest rates, I'm not sure that this is necessarily the best policy - but I am not a Bond expert.
As well as a world tracker, I have sizeable holdings in three managed world funds:-
Scottish Mortgage IT (as you have), Fundsmith (an OEIC) and Lindsell Train Global Equity (an offshore OEIC).
These three have different country allocations and different philosophies. Hence I hope this provides some diversification - and decreased risk.
Lindsell Train Global Equity (£7.6B in size) has 35.5% in the UK, 32% in the USA and 20% in Japan. It has 25 holdings - and the top ten are quite unlike those in SMT. 5year total return = 135%
Fundsmith (£19.3B in size) has 66.7% in the USA and 16.8% in the UK . It has 28 holdings, and the top ten include some of the large USA companies that you will also see in SMT. However, its manager, Terry Smith has particular dislikes - no Amazon, and no Chinese investments. At his annual presentations he has explained why. 5year total return = 169%
Scottish Mortgage, which you hold, (£14.9B in size) has 43.8% in the USA, 16.7% in China, and no UK presence in its top ten. It has holdings typically ranging from 50 to 100. It has a very heavy bet on Tesla (11%), closely followed by Amazon (9.3%). 5year total return=314%
All Numbers from Hargreaves Lansdown.

[Urbandreamer]

I'm not sure that my advice will be welcomed, as I topped up the BMO trust mentioned at the start of this month.

I've held for five years, and yes recent performance has not been good.

Have you thought about emerging market IT's (or ETFS, or index trackers)?

How about something thematic, I hold IBT.

Then again if we want diversification, what about property? I've recently bought Civitas.

Ps I too hold SMT & FCIT.

[EthicsGradient]

I sold my BMO Global Smaller Cos in April, being similarly unsatisfied with recent performance. I considered adding it to my other global smaller cos holding - the Aberdeen Standard Global Smaller Cos fund: https://www.trustnet.com/factsheets/o/1 ... -companies . But I decided that would be too much in one fund, so went for a tracker instead: Vanguard Global Small-Cap Index: https://www.trustnet.com/factsheets/o/i ... ex-inc-gbp

[shawsdale]

For a replacement global smaller/mid-cap vehicle Smithson might be worth considering?

Depending on your other portfolio holdings perhaps now might be the time to increase exposure to 'value', albeit of course 'value' comes in many guises and a growth/value binary opposition is too simplistic.

To be specific, I keep not quite investing in AVI Global (AGT, British Empire Trust as was). I hesitate because I already have significant Japanese exposure - Japanese special situations is the major weighting in AGT - although there's no denying the distinctiveness of AGT's holdings compared to most other global trusts.

[ADrunkenMarcus]

For a replacement global smaller/mid-cap vehicle Smithson might be worth considering?

I'm a fan. 48% of my SIPP is in Smithson. I've held since inception in October 2018.

Best wishes

Mark.

[monabri]

Witan...their top holding by percentage is a Vanguard S&P500 ETF at 9.3%. To have an actively managed fund selecting a passive tracker is , to me, surprising! Shades of waving a little white flag ( expensively).

[longview]

Witan...their top holding by percentage is a Vanguard S&P500 ETF at 9.3%. To have an actively managed fund selecting a passive tracker is , to me, surprising! Shades of waving a little white flag ( expensively).

Witan are in the process of changing the investment managers they use so it should be temporary, from half year report:
"The proceeds from the liquidation of the Pzena global portfolio were partly invested in a US market ETF, as a low cost way to maintain equity exposure pending the selection of new global managers."

[scrumpyjack]

For a replacement global smaller/mid-cap vehicle Smithson might be worth considering?

I'm a fan. 48% of my SIPP is in Smithson. I've held since inception in October 2018.

Best wishes

Mark.

Bit risky to have such a high proportion with one manager? I mean many investors were convinced the sun shone out of Neil Woodford's a*se?

A manager can be brilliant - until he isn't!

[ADrunkenMarcus]

Bit risky to have such a high proportion with one manager?

'Don't try this at home'.

Best wishes

Mark.

[Avantegarde]

For a replacement global smaller/mid-cap vehicle Smithson might be worth considering?

Depending on your other portfolio holdings perhaps now might be the time to increase exposure to 'value', albeit of course 'value' comes in many guises and a growth/value binary opposition is too simplistic.

To be specific, I keep not quite investing in AVI Global (AGT, British Empire Trust as was). I hesitate because I already have significant Japanese exposure - Japanese special situations is the major weighting in AGT - although there's no denying the distinctiveness of AGT's holdings compared to most other global trusts.

Thanks for the Smithson tip. I had overlooked this new trust entirely. It has done very well in its first couple of years. It trades at a current premium of 3% which I wish to avoid but I think I'll keep a close eye and buy in when a discount appears or the premium softens to less than 1%. I appreciate I may have to wait some time.

[Pete675]

RIT, PNL and Witan would be my choices, have held all three for 5 years. You could also divide the capital and invest directly in high quality shares eg Pay Pal, Coca Cola, Nestle, Microsoft and so on.

[TUK020]

RIT, PNL and Witan would be my choices, have held all three for 5 years. You could also divide the capital and invest directly in high quality shares eg Pay Pal, Coca Cola, Nestle, Microsoft and so on.

Any particular reason that you would pick RIT Capital Partners over Caledonia?
I have just started small stakes in both (and FCIT, WItan and Alliance)

[Pete675]

RIT, PNL and Witan would be my choices, have held all three for 5 years. You could also divide the capital and invest directly in high quality shares eg Pay Pal, Coca Cola, Nestle, Microsoft and so on.

Any particular reason that you would pick RIT Capital Partners over Caledonia?
I have just started small stakes in both (and FCIT, WItan and Alliance)

.

I have a smaller holding in Caledonia too, both ITs have their similarities. But I prefer RIT Capital Partners as the preeminent 'old money' family trust, after all you can't get more preeminent in the financial world than the Rothschilds.

[Pete675]

Alliance Trust - ATST- is a consistently good performer that seems to fall under the radar somewhat. Global, with a fair chunk of US tech stocks.