UK mid-cap and small-cap investment trusts?

[Newroad]

Evening All.

To complement my pseudo-HYP, which is probably only a few months away from being full with 22 (mostly) FTSE stocks (11 sectors * 2), I'm considering whether to round it out (balance it) with both a UK mid-cap and a UK small-cap investment trust. These would not be expected to be HYP focused.

Any suggestions for either or both of these two asset sub-classes - investment trusts only please (not ETF's or OEIC's)?

Regards, Newroad

[ignotus20]

I briefly looked at Invesco Perpetual UK Small Companies (IPU) while trying to devise my own IT portfolio. This was more yield-oriented though so may not suit your requirements. I did not go with it in the end because I preferred a smaller selection of global ITs rather than a clutch of country or region-specific ones. Others may have better options for you to consider.

[BullDog]

I should think Throgmorton Trust would be on your radar. It's pretty bombed out along with all the other small and mid cap trusts.

[ADrunkenMarcus]

Blackrock Smaller Companies is another decent choice. Ongoing charge figure was about 0.7% and it trades at a c. 14% discount to NAV. NAV itself is depressed because of sentiment to smaller and mid caps IMHO.

You may not want a high dividend from it but it's currently yielding about 2.6% and has grown the dividend about 12% a year since 2003. One I hold in my dividend growth portfolio!

Best wishes


Mark

[Newroad]

Thanks All.

That's at least three to consider, in an area where I have little expertise (but probably need some sort of holding in to give some balance to a predominantly FTSE-100 sub-portfolio).

If anyone has relative opinions on these, further thoughts would be gratefully received?

Also, if anyone knows the mid-cap vs small-cap details of them, it would be appreciated (though I will also see if the available literature issued covers this).

Regards, Newroad

PS They are allowed to have a decent yield, it's just that one is not required.

[ignotus20]

Also, if anyone knows the mid-cap vs small-cap details of them, it would be appreciated (though I will also see if the available literature issued covers this).

You probably know this already, but I didn't find out until fairly recently. So for the benefit of anyone else who also wasn't aware, you can get the IT's main portfolio constituents from the AIC site by inserting the ticker into the URL like so: https://www.theaic.co.uk/companydata/[ticker] Then click the 'portfolio' tab.

Here are a few examples using the three ITs discussed on this thread:

https://www.theaic.co.uk/companydata/ipu
https://www.theaic.co.uk/companydata/brsc
https://www.theaic.co.uk/companydata/thrg

https://www.theaic.co.uk/companydata/in ... /portfolio
https://www.theaic.co.uk/companydata/bl ... /portfolio
https://www.theaic.co.uk/companydata/bl ... /portfolio

[Spet0789]

If you're a taxpayer, don't need to access the money for 5 years and already use up your ISA allowances, consider buying an AIM VCT. Basically a (relatively) expensive UK small-cap fund but with a discount on purchase and tax free thereafter.

[Lootman]

If you're a taxpayer, don't need to access the money for 5 years and already use up your ISA allowances, consider buying an AIM VCT. Basically a (relatively) expensive UK small-cap fund but with a discount on purchase and tax free thereafter.

Would it be potentially exempt from IHT in the same way that qualifying AIM shares currently are?

[Newroad]

Thanks Ignotus20.

I didn't know that re the AITC information. I got similar information from the annual reports (at least for the Blackrock ones) - Throgmorton is arguably small to mid cap, whereas Smaller Companies is more or less what it says on the tin. Quite an overlap in the top ten holdings for each (about half).

So, probably only worth owning one - so a question of whether to go for the one with the better performance or the greater discount. Perhaps Throgmorton (as a proxy for mid) plus the Invesco one (as a proxy for small) is best.

{Spet0789} Yes, those considerations apply to me in context. I haven't really thought about an AIM VCT (going smaller again of sorts). If I considered, say, Throgmorton plus one of those, any recommendations?

Regards, Newroad

[Spet0789]

Thanks Ignotus20.

I didn't know that re the AITC information. I got similar information from the annual reports (at least for the Blackrock ones) - Throgmorton is arguably small to mid cap, whereas Smaller Companies is more or less what it says on the tin. Quite an overlap in the top ten holdings for each (about half).

So, probably only worth owning one - so a question of whether to go for the one with the better performance or the greater discount. Perhaps Throgmorton (as a proxy for mid) plus the Invesco one (as a proxy for small) is best.

{Spet0789} Yes, those considerations apply to me in context. I haven't really thought about an AIM VCT (going smaller again of sorts). If I considered, say, Throgmorton plus one of those, any recommendations?

Regards, Newroad

Amati and Hargreave Hale are two I hold.

[Spet0789]

If you're a taxpayer, don't need to access the money for 5 years and already use up your ISA allowances, consider buying an AIM VCT. Basically a (relatively) expensive UK small-cap fund but with a discount on purchase and tax free thereafter.

Would it be potentially exempt from IHT in the same way that qualifying AIM shares currently are?

Good question. I’m not that focussed on IHT but I think you have to hold the AIM shares directly to benefit.

[Newroad]

Morning, All.

Anyone had a look at, or hold, SCP (Schroder UK Mid-Cap Investment Trust) or JMF (JP Morgan Mid-Cap Investment Trust)? Anyway, I've done a bit of analysis (source: TrustNet)



It sort of confirmed where I was likely to head anyway, i.e. probably

Schroder Mid-Cap (I like Andy Brough, though the expense ration is a bit high)
Blackrock Throgmorton (for the smaller)

Thoughts?

Regards, Newroad

[ignotus20]

JPMorgan Smaller Companies Investment Trust PLC (JMI) is another small-cap candidate.

https://www.trustnet.com/factsheets/t/f ... plc-ord-5p
https://www.theaic.co.uk/companydata/jp ... -companies

[Newroad]

Thanks, Ignotus20.

I'm now sort of settling in on

SCP: Mid-cap(ish)
THRG: Small-cap(ish)

to go with the 22 single FTSE stocks, making a nice round 24.

With the way the market is going and with some money coming in end of the month, could be (faster) buying time soon - hence I need to be good to go!

Regards, Newroad

[Newroad]

Evening All.

I never got around to adding SCP or THRG at the time.

However, with the market showing some short term weakness (and the share prices having dropped on these two* even before that) maybe the time is getting closer to being right.

Current thoughts anyone?

Regards, Newroad

* SCP 564p then to 488p now, THRG 574p then to 507p now

[fisher]

I own Mercantile (MRC) as my only UK mid and small cap trust. It has had a good reputation but has perhaps not done so well recently. I also have had Black Rock smaller companies on my watch list for some time, mainly because of this article about the oldest investment trusts together with 3 decades of performance data: https://www.itinvestor.co.uk/2023/04/re ... revisited/

Mercantile are also in that article.

[Arborbridge]

Another vote for MRC plus IPU. Mercantile, as fisher said, has lost it's mojo a little - the XIRR was always up in double figures, but during this year it has suffered - I guess as a consequence of this particular state of its target companies. That's confirmed by IPU dipping too.

Interestingly, MRC was at a fat discount which is now coming back to something more normal, (but still 14%) and the share price chart looks like it has come off a bottom. Whether this is a buy point is up to you, but I might well buy a small additional tranche in November.


Arb.

[Arborbridge]

I own Mercantile (MRC) as my only UK mid and small cap trust. It has had a good reputation but has perhaps not done so well recently. I also have had Black Rock smaller companies on my watch list for some time, mainly because of this article about the oldest investment trusts together with 3 decades of performance data: https://www.itinvestor.co.uk/2023/04/re ... revisited/

Mercantile are also in that article.

Thanks for that link. What a great hunting ground!

[Newroad]

Thanks Fisher and Arborbridge.

For the double nod to MRC - will have a look at it and compare to the current two in the frame. It seems plausible (including but not limited to reasonable ongoing charges).

Regards, Newroad

[Arborbridge]

Thanks Fisher and Arborbridge.

For the double nod to MRC - will have a look at it and compare to the current two in the frame. It seems plausible (including but not limited to reasonable ongoing charges).

Regards, Newroad

As it happens, I've just been checking my accounts this morning. All the medium or smaller company ITs and OEICS have fallen quite sharply. I know that's not news to many people here who are more attentive, but the point I'm making is that the whole sector has suffered, so when looking at a particular IT in that sector, just be aware that it is the relative performance you might like to pay attention to.

Some people might say it is too early to buy in to this part of the market - others like to be well ahead of the game!

Arb.