John Laing Infrastructure Fund (JLIF) Bit of a bargain?

[Itsallaguess]

Any views or followers of JLIF here?

I've been keeping my eye on it for a while, but don't like the political risk involved with regards to Labour's threats over PFI contracts.

This article just about sums up the recent issues with the JLIF price-drop over recent months -

At Tuesday's closing price of 118.6p they stood nearly 2% below their estimated net asset value of 120.9p per share, according to Morningstar data.

This is the first time since its flotation in 2010 the shares have traded at a discount and is in stark contrast to the record 24% premium they reached last year immediately after the Brexit vote.

JLIF said it was monitoring the political situation ‘carefully’. It says its UK portfolio makes up 71% of JLIF’s total value but the breadth of its investments means it has ‘limited exposure to any single public sector client’.

http://citywire.co.uk/investment-trust- ... n/a1069439

One for the brave, probably....

Cheers,

Itsallaguess

[richfool]

Looking around for another cash cow investment to tuck away in the SIPP. Recently tempted by GSK but decided not to invest. Latest cash cow candidate is JLIF. Looks like (at last) it is available at par, trading at or very close to NAV. With a juicy yield getting on for 6% it's looking good. Any views or followers of JLIF here? I guess there are quite a few followers here.

As Itsallaguess said its been affected by the labour party's announcements about PFI projects.

I held JLIF and INPP and have since sold JLIF. I read a number of articles, one of which was highlighting how JLIF had more exposure to healthcare. JLIF also seemed to be suffering more from the adverse news. I stuck with INPP as I saw it better diversified, albeit at a lower yield of 4.2%. Note dividend is paid half yearly and I've just had one.

http://citywire.co.uk/investment-trust- ... w/a1065396

The danger posed to infrastructure investment companies from Labour’s hostility to private-finance initiatives (PFI) is limited, according to the latest analysis by broker Jefferies, although listed funds from John Laing, BBGI and HICL are the most exposed.

Note the comments after the article.

Fred, I've popped another suggestion for you on the Property REIT forum.

You could also look at JLEN - Environmental Assets.
http://www.hl.co.uk/shares/shares-searc ... -group-npv

[richfool]

You could also have a look at JLEN - John Laing Environmental Asset Group. Yield: 5.85% (Premium: 5.92%). Dividend paid Qtly.

or The Renewable Infrastructure Group (TRIG) - 6.07% yield. (Premium 6.05%) Dividend paid half-yearly.

http://www.hl.co.uk/shares/shares-searc ... -group-npv

http://www.hl.co.uk/shares/shares-searc ... ty_details

Both could be affected by Governmental action, tax subsidies etc.

I hold: JLEN

[forrado]

Was a holder of JLIF stock in the past before making an exit more than a year ago, but still keep a watching eye on happenings.

May appear a "bit of a bargain" at first sight but could become an even better bargain. As already referred to, at the mercy of which way the political wind happens to be blowing. For the past three years the fund has been diversifying overseas, following a successful capital raising rights issue, though has not found the process easy-going at times. Running projects outside the UK not being the management's area of expertise. Still has a 70% exposure to UK PPP projects and, since coming to the market in 2010, has annually raised twice yearly payouts to shareholders in-line with inflation.

Politics being the unpredictable game that it is, investor sentiment could turn against the sector, and in particular against such stocks, as JLIF, with large UK PPP exposures. With that in mind, I would be looking for a margin of safety, in form of a discount, before I’d be tempted to look again at the bargain possibilities.

[richfool]

I would be very conscious of the ongoing overhang of market sentiment that forrado refers to, affecting the sector and JLIF particularly. The political uncertainty currently is going to be hanging around for some time. There was also the mention by the Labour party of windfall taxes. Thus I wouldn't be too keen, at least until there was some conclusive political development.

[forrado]

What sort of discount do you think would make it attractive?

Back when JLIF first came to the market in November 2010 the shares were priced at 100p each with an annual starting payout of 6p (paid twice yearly), the last 12-month payouts coming in at 6.89p, that's an increase of 14.8% over the course of 7 years. Based on JLIF’s last closing price of 119.5p that represents a current annual running yield of 5.75%.

Therefore, speaking personally, my starting point would be to at least better that 6% yield as it was in November 2010. Because, in all the 7 years that JLIF has been around the yield has never been higher than 6%.

[Markab01]

If you are worried by the Marxist ramblings of the shadow Chancellor then try some global infrastructure IT's

How about Ecofin Global Utilities and Infrastructure (EGL) ? O.K. quite a new trust but with a good dividend .

Or how about Premier Global Infrastructure (PIGT). This was originally PEW but has recently changed its name and EPIC.
It is now less than 10% invested in UK.

Markab01

[richfool]

If you are worried by the Marxist ramblings of the shadow Chancellor then try some global infrastructure IT's

How about Ecofin Global Utilities and Infrastructure (EGL) ? O.K. quite a new trust but with a good dividend .

Or how about Premier Global Infrastructure (PIGT). This was originally PEW but has recently changed its name and EPIC.
It is now less than 10% invested in UK.

Markab01

Thank you. I was aware of Ecofin (EGL), I'll take another look. And thanks for the heads up on PIGT too, one to look at.

Yes, I hold EGL. I like the diversity of the utilities it holds and its holdings include some infrastructure.

A couple of other related thoughts, depending on how you feel about solar and wind power, could be: JLEN, TRIG, BSIF.
Their premia and SPs have dropped back a bit too, since the Labour party's pronouncements.

http://www.hl.co.uk/shares/shares-searc ... -group-npv

http://www.hl.co.uk/shares/shares-searc ... up-ord-npv

http://www.hl.co.uk/shares/shares-searc ... ed-ord-npv

[Alaric]

There's a new IPO which is intending to invest in infrastructure projects.

Tri-Pillar Infrastructure Fund Ltd.

It's going to be a Jersey based Investment Trust.

It claims that it will primarily invest in Europe and America, so perhaps less UK political risk.

This is what it says about dividends and fees

· Once the net issue proceeds have been fully invested, the targeted annual dividend will be 4.5p per share, starting from the financial
period beginning 1 April 2019**
· The targeted net total shareholder return is 8%-10% per annum over the long term**

· Annual fee: 1.25% of GAV up to £1bn;
1.1% above £1bn
· Performance fee: None
· Acquisition fee: 1% on all assets purchased

[richfool]

Well I bought back into JLIF yesterday, albeit it a smaller slice. I am hoping it had bottomed at 119p, and bought in at 120p. The premium had gone and the yield increased to 5.75%.

I took the view that the adverse publicity was overdone, and upon inspecting the Report & Accounts, the diversification of assets and sectors was better than I had previously thought.

[flyer61]

Any updated thoughts from previous posters? I am looking at an initial purchase of JLIF and HICL.

[flyer61]

Any of them float your boat Fred'? Trying to find a few income ideas for my ISA's. Have been derisking my SIPP from hi yield and buying Fundsmith shares direct.

[flyer61]

Take a thumbs up Fred....many thanks.

Most of my SIPP purchases are in the US market. EL, 3M, DIS, BA (BOEING), PEP, PM etc, then L'Oreal, Kone, Nestle etc I cannot predict anything but at least I can buy perceived quality.

But would still like a bit more 'income' out of the ISA's.

[flyer61]

yep, wilco...added to my post..

[BrummieDave]

This is a really fascinating thread, thank you to all who have contributed.

When I soon retire from work, my DB pension will be around two thirds of my income with the natural yield from my investments making up the rest. Everything is invested such that income will be free of tax (two sets of ISAs, remainder in non tax paying spouse's name) which leaves me with the remaining piece of the jigsaw, my own £2k tax free dividend allowance. As I will be a relatively young pensioner, hoping for a long retirement, almost everything is invested in LTBH equity income ITs, where I hope the income will steadily increase, and capital will modestly grow, should I ever need it (which I do not currently plan to do). So I started with L'Uni's B7a and have since added to it with more global ITs such as MYI, STS, HFEL, EAT etc. The only exceptions from equity ITs I currently hold are a small amount of HICL, RGL and Standard Life Property (SLI).

With regard to my £2k tax free dividend allowance, my thoughts are to treat this as more of a cash cow approach. I will be funding it from the 25% tax free portion of my DB Pension. If I buy further equity ITs yielding up to 4% it would cost £50k. But if I assume the allowance will always be there (I know Jeremy C could cut it if he makes it to No 10) and will only ever be increased modestly if at all, the chances are I will never want to access the capital. Hence I'm looking at varying my investment approach away from equities and instead go for higher yielding investments which could provide £2k of income from say, £30k. This would leave £20k for Premium Bonds for example (more tax free income and the capital readily accessible should I ever need or want it).

I could do this with £10k in each of RGL, JLIF and HICL.

Any views on the approach, or the three selections?

[monabri]

BrummieDave

Do you have any choice as to the level of the tax free lump sum?

If you take 25%, your "guaranteed" defined benefit would decrease by £xxxx. Could you make that decrease up by savvy investing at no risk?

(I'm guessing that the decrease would mean that your investment would have to yield ~8% after tax.....every year).

you say you will be a relatively youngish pensioner...even more reason to max your DB pension ...all those future years of increasing pension

compounding up.

Just a thought/observation.

[BrummieDave]

Thanks but the pension side of everything is sorted and wasn't looking for views on that tbh. Gosh, that sounds ungrateful which I don't mean to be. I only added that the capital is coming from there so you didn't all think I was Mr Minted with £30k or £50k lying around in a shoe box!

[richfool]

If it is of any interest, I am still holding JLIF and also INPP., (in the Infrastructure sector). The former seems to be performing better in that it has fallen less and it has a higher dividend yield.

I understand that both trusts have been trying to diversify their exposure away from PFI's and JC/McDonald related risks.

I also hold EGL, NG and RGL mentioned in the above posts.

[richfool]

Try Regional REIT, RGL. A screaming income bargain right now. Very out of fashion, hence the poor recent share price performance. Really, I have way too much in RGL right now, but just feel that dividend four times a year. I am now entirely out of UK infrastructure and utilities. This week I dumped National Grid on Boris's resignation at a small profit. I am a huge fan of NG but I am sitting on the sidelines until I know we are not getting a Labour government. For exposure outside the UK, try Ecofin Utilities. Only drawback is the horrible buy/sell spread on it but otherwise, with the UK government now in a mess over Brexit, it makes a lot of sense for utilities exposure with little UK exposure.

Edited to add - I am quite keen on HSBC for the above reasons too. I am maybe going to top up if we dip much below 700p. With China/greater China region presently a bit in the doldrums, it could be a shrewd buy with a decent enough divi.

Fred, NG seems to have recovered from the hiccough earlier this week, and resumed its upward recovery. IC also continues to recommend NG as a buy. Even the talks between Trump and May seem to be improving today, all of which makes the prospect of a JC/McDonald government nightmare less likely. I think this is a case of being influenced by excessive noise and overlooking "time in the market" and dividends arising.

I am continuing to hold my NG., infrastructure (JLIF & INPP) and utilities (EGL). I'm also a long term holder of HSBC.

[TheDove]

Surprise bid (well, to me at least) this morning offers the prospect of exiting with a hitherto unimagined capital gain, plus the chore of finding a replacement. Possibly LLOY in my case, although the exclusive UK focus leaves me a little wary. Meanwhile, in the light of the last two years' events, it's a wonder to me that anyone sees forward value in this sector.

Maybe more knowledgeable heads than mine have an answer.

Dove