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Swapping unit trustbfor investment trust
Swapping unit trustbfor investment trust
Need a bit of advice/opinion please.
I run my wife’s Sipp for her. Only two holdings fundsmith and lindsell uk equity. Circa £60k in each fund held in Hargreaves Lansdowne. I also service the fees by transferring in monthly. No other contributions are added or will be added for some time. The pot won’t be touched for another 20 years or so.
Should I swap Lindsell Train uk fund for the global equity trust to cut down on fees and also better performance? The reason I have held back so far is because of the Nav premium and gearing. I didn’t invest in a global tracker as I want some protection in falling markets.
My reasons for investing in the above was in the manager’s track records over the longer term more than anything else. I wanted something that was boring but consistent over the long term.
Any views would be very welcome thank you.
I run my wife’s Sipp for her. Only two holdings fundsmith and lindsell uk equity. Circa £60k in each fund held in Hargreaves Lansdowne. I also service the fees by transferring in monthly. No other contributions are added or will be added for some time. The pot won’t be touched for another 20 years or so.
Should I swap Lindsell Train uk fund for the global equity trust to cut down on fees and also better performance? The reason I have held back so far is because of the Nav premium and gearing. I didn’t invest in a global tracker as I want some protection in falling markets.
My reasons for investing in the above was in the manager’s track records over the longer term more than anything else. I wanted something that was boring but consistent over the long term.
Any views would be very welcome thank you.
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- Lemon Quarter
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Re: Swapping unit trustbfor investment trust
I believe HL charges 0.45% per annum for Funds and Investment Trusts in a SIPP - but limits the Investment Trust Charge to £200 max. So 60k in funds cost you £270, whereas in Investment Trusts its only £200 - but Investment Trusts have a transaction cost of £11.95 plus the 0.5% stamp duty (£300 on 60k). So there is probably a break even point in costs of approximately four years, if you only transfer 60k.
I'm currently a bit wary of ITs, particularly if they are at, or near, a premium. In such circumstances I fear a doubly whammy in a falling market - lower NAV and an increasing discount. But I'm sure others will say that for a long term investor who can ride out bumps, Its may give a superior return. If you want to move your Lindsell Train UK investment to a Global Investment, then you may want to think about Lindsell Train Global Equity - which is a fund, and not an Investment Trust.
I'm currently a bit wary of ITs, particularly if they are at, or near, a premium. In such circumstances I fear a doubly whammy in a falling market - lower NAV and an increasing discount. But I'm sure others will say that for a long term investor who can ride out bumps, Its may give a superior return. If you want to move your Lindsell Train UK investment to a Global Investment, then you may want to think about Lindsell Train Global Equity - which is a fund, and not an Investment Trust.
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- The full Lemon
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Re: Swapping unit trustbfor investment trust
Leaving aside the question of HL's charges, are you referring to the LT Investment Trust? It has always been at a big premium when I look at it and I cannot see it quoted in yesterday's Times so I do not know the current situation. If you want exposure to Nick Train, you could look at Finsbury Growth and Income where he is the investment manager. They have a Discount Control Mechanism where they keep the discount or premium within a narrow bound by issuing or buying in their own shares. Does well on the capital front with only a modest yield.
Dod
Dod
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Re: Swapping unit trustbfor investment trust
If you want to see data for particular ITs, theaic.co.uk is excellent. Here's the Lindsell Train IT entry:
https://www.theaic.co.uk/companydata/BWSAG
Premium of 12%, yield 1.9%.
https://www.theaic.co.uk/companydata/BWSAG
Premium of 12%, yield 1.9%.
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- Lemon Slice
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Re: Swapping unit trustbfor investment trust
Nick Train himself puts all his money into finsbury. Read into that what you will, but I take it as a positive.
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Re: Swapping unit trustbfor investment trust
Dod -
Over 5 years its performance almost exactly mirrors his Lindsell Train UK Equity Fund - so in this case its simply a question of fees. In an HL ISA, the Investment Trust fee maximum is £45 - so there is a greater incentive to hold the Finsbury Growth and Income Trust (which I do) - and as you remark there is a discount policy which appears to keep the cost close to NAV.
I agree with your caution on the Lindsell Train IT. So if he wants to gain global exposure with Lindsell Train, I think the more cautious option is their Global Equity Fund.
If you want exposure to Nick Train, you could look at Finsbury Growth and Income where he is the investment manager.
Over 5 years its performance almost exactly mirrors his Lindsell Train UK Equity Fund - so in this case its simply a question of fees. In an HL ISA, the Investment Trust fee maximum is £45 - so there is a greater incentive to hold the Finsbury Growth and Income Trust (which I do) - and as you remark there is a discount policy which appears to keep the cost close to NAV.
I agree with your caution on the Lindsell Train IT. So if he wants to gain global exposure with Lindsell Train, I think the more cautious option is their Global Equity Fund.
Re: Swapping unit trustbfor investment trust
Yes thanks for the comments. Sorry I meant the Lindsell Train global fund which is an income fund and I would need to pay to reinvest the dividends.
The more I look I don’t think I like trains investment trust for now anyway. I’m not keen on NAV’s and gearing.
When a market correction occurs I will switch the lot into a global tracker.
Again thanks.
The more I look I don’t think I like trains investment trust for now anyway. I’m not keen on NAV’s and gearing.
When a market correction occurs I will switch the lot into a global tracker.
Again thanks.
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- The full Lemon
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Re: Swapping unit trustbfor investment trust
FredBloggs wrote:Just another take on this. If the OP is quite happy with the investments he holds, and is just looking (sensibly) to trim platform costs then I recommend another approach. I do not advocate letting the charges tail wag the investment dog, I will not be constrained in my investment universe by platform charges. My suggestion in this case, therefore, is to continue to hold the same investments but on a much lower cost platform. There are quite a few to choose from, either % or fixed fee based whichever suits best. HTH.
That is another approach. I have used Alliance Trust Savings since about 1991 and more recently have been using what was TDInvesting where they made no charge, Now both managers/platforms make a flat annual charge, both fairly modest. Cannot understand why anyone would pay more.
Dod
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Re: Swapping unit trustbfor investment trust
Dod101 wrote: I have used Alliance Trust Savings since about 1991 and more recently have been using what was TDInvesting where they made no charge, Now both managers/platforms make a flat annual charge, both fairly modest.
TD (now Interactive Investor) make the same charges for ITs as holding shares. For OEICs there's an additional platform fee based on fund value. That's very common across the industry if lacking justification.
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Re: Swapping unit trustbfor investment trust
FredBloggs wrote:My red colour. Is there? That's big news to me? I pay GBP 20 a quarter (soon to be GBP 22) and it is credited against trades I would do anyway. I hold shares, OEICs and ITs all on II's platform and have no recognition of any extra charges for OEICS?
There was a regular platform charge on the TD Direct platform. Checking the statement of fees and charges as currently stated, it does indeed appear to have been abolished with the takeover. Not something they've promoted even though it's good news for ex-TD holders.
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Re: Swapping unit trustbfor investment trust
I hold a share dealing account with Jarvis Investment Mgt and an ISA with their X-O subsidiary. Neither charge any platform fees, nor are there any minimum number of trades. Jarvis charge £9.50 per trade. X-O charge £5.95 per trade.
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Re: Swapping unit trustbfor investment trust
richfool wrote:I hold a share dealing account with Jarvis Investment Mgt and an ISA with their X-O subsidiary. Neither charge any platform fees, nor are there any minimum number of trades. Jarvis charge £9.50 per trade. X-O charge £5.95 per trade.
I think focusing on the cheapest way to hold your chosen portfolio is a very good idea.
Now, the OP (Steak) is discussing a portfolio of two specific OEICs: Fundsmith & Lindsell Train Global Equity.
If suggesting alternate SIPP platforms it'd be useful if the platform (i) offered OEICs generally and (ii) offered the named OEICs specifically, else it won't help Steak (but may still help others...).
I was under the impression that X-O didn't offer any OEICs. Perhaps I'm wrong?
I think the Jarvis SIPP does offer OEICs. Does it offer the OEICs that Steak mentions?
(LT Global Equity seems not to be offered by some platforms that do offer other OEICs, including LT UK Equity!)
Thanks.
Re: Swapping unit trustbfor investment trust
Thanks all
Yes the idea was to minimise costs but still hold fundsmith and train.
HL charges do stick in the throat especially as it’s a buy and hold for the long term with very little trading. Like I said I would’ve went the tracker option but markets are all high at the moment so looking for some “protection” on the way down.
I do like using HL with my portfolio though. Good interface.
Yes the idea was to minimise costs but still hold fundsmith and train.
HL charges do stick in the throat especially as it’s a buy and hold for the long term with very little trading. Like I said I would’ve went the tracker option but markets are all high at the moment so looking for some “protection” on the way down.
I do like using HL with my portfolio though. Good interface.
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