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Gadge GIP new investment options and half year review

Wider investment strategy discussions not dealt with elsewhere
Gadge
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Gadge GIP new investment options and half year review

#157402

Postby Gadge » August 5th, 2018, 9:48 pm

With nearly £4k sitting in notional dividends, I have started to give some thought on making a new investment in GIP.

In real life , I recently sold Woodford Income and reinvested in PLI to take advantage of the 12% discount available in PLI at that time. However, we started GIP with £20K invested in CTY and that makes GIP overweight UK Bluechips already (UK is roughly 7% of global market).

Sooooo I have been thinking about these options:-

NAIT - This will increase expose again to equities in what should be a well diversified portfolio but will increase our exposure to US Blue Chips, get a decent income and is not investing in US tech which I feel is due a pull back at least.

TRY - This would partner well with SLI, increase our property/diversity, get us income and hopefully help with growth.

FGT - This would increase our exposure to UK shares but buy us more growthy shares with growing dividends. I like Nick Train’s style. There is some cross over with CTY holdings though with Diageo/Unilever and maybe more.

Legal and General Global Inflation Linked Bond Income - This is a low cost fund which pays 2.2% yield. It has increased by about 9% since launch (2013) so it is definitely more whisky than water. But it will help with investment diversity.

Anyway, them’s my thoughts. If you guys have any input to other options then post 'em below.
All contributions to thinking are warmly welcomed.


GIP Half Yearly Review 2018 :-

I don’t normally do one but the news is exciting really so I can’t wait!!!

GIP got off to a real flyer in its first year but it's recently been caught up and passed by one of our benchmarks in the shape of Vanguard Lifestrategy 80/20 (although I do not monitor platform fees) which is now in a slight lead on a total return (TR) basis, having performed very well this year to date. This both fascinates me and inspires me to do better :-)

To be fair VGLS is 80% in equities so should do well in this market.
Or maybe it is those low costs gradually making a difference?

I invested all dividends received to Dec 2017 in BB Bion which is a biotech IT and it is finally in the black in capital terms as well as paying a 4% dividend. I think this will reward us eventually although this has not been a vintage year for biotech. I remain optimistic though for the future.
This of course, overweighted us more to equities than the original allocations.

At some point GIP may need rebalancing.

All other holdings are doing OK on a TR basis at this time.
Happy to provide numbers if anyone is interested in individual holdings results

All the best

Gadge



What the hell is GIP Anyway?????

Click below to read about and follow links on the story to date

viewtopic.php?f=8&t=9227

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Re: Gadge GIP new investment options and half year review

#157404

Postby HYPMonkey » August 5th, 2018, 10:06 pm

Super.

I am always interested to read about GIP.

Very much looking forward to end of year review and numbers.

Gadge
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Re: Gadge GIP new investment options and half year review

#157417

Postby Gadge » August 5th, 2018, 11:24 pm

TYPO alert (CAPS corrected) :-

Legal and General Global Inflation Linked Bond Income - This is a low cost fund which pays 2.2% yield. It has increased by about 9% since launch (2013) so it is definitely more WATER than WHISKY. But it will help with investment diversity.

richfool
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Re: Gadge GIP new investment options and half year review

#157945

Postby richfool » August 8th, 2018, 3:12 pm

Gadge wrote:NAIT - This will increase expose again to equities in what should be a well diversified portfolio but will increase our exposure to US Blue Chips, get a decent income and is not investing in US tech which I feel is due a pull back at least.

TRY - This would partner well with SLI, increase our property/diversity, get us income and hopefully help with growth.

FGT - This would increase our exposure to UK shares but buy us more growthy shares with growing dividends. I like Nick Train’s style. There is some cross over with CTY holdings though with Diageo/Unilever and maybe more.


Hi Gadge, If you recall I also run an IT portfolio, mine is growth and income focussed.

As I understood it your GIP portfolio is income focussed, and if so, I wonder therefore why you are considering adding NAIT, FGT and TRY.

NAIT (which I also hold) currently offers a yield of 2.9%. It has grown well over the last 3 years and I have top-sliced my holding and was even pondering whether to reduce it further, as the US is considered over valued and due a correction. (Noted the dividend income on cost (YOC), for an existing holder, is higher, but not for a new purchaser.

FGT (which I also hold), whilst it is in the UK G&I sector, (and holds quality stocks) again the yield is low, currently around 1.69%, mainly due to its good growth.

TRY I am aware is a European focussed property trust, with a middle of the road yield, - 2.86%. There are better income paying property stocks out there.

Indeed IF you are wanting to maximise dividend income, there are surely better choices out than all three of the above, or have I misunderstood your objective? Is your objective: growth with some income?

Gadge
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Re: Gadge GIP new investment options and half year review

#158261

Postby Gadge » August 9th, 2018, 3:57 pm

Hi Richfool

I remember your contributions very well to the formation of GIP inc your information on JPGI, which has done very well for both GIP and me in real life since.

To answer your question, GIP is intended to be a Global income portfolio BUT it is not just a retirement portfolio, total return is benchmarked and HIGHLY important to me, hence so is growth.

I take the view, that if it walks like a duck then it is one. In this case, if it offers an OVERALL yield above the market, it is an income portfolio! I therefore am not concerned about holding some individual stocks yielding below market rate, as long as they offer growth possibility.

I would though require special circumstances to consider IT’s with zero yield or let’s say less than 1%. An example of this would be Scottish Mortgage on offer at a discount and at £3.50 a share. Fat chance today but who knows in a bear market?

Re my suggestions, I think TRY partners very well with SLI to offer an overall market beating yield in that sector with real growth possibility. Indeed, I do hold exactly this in reai life and have been very pleased with the outcome in the last few years (unlike RGL which pays a fab discount but seems to lose as much capital as it pays out, which is about as much use as an ashtray on a motorbike!)

Likewise combining FGT with City of London makes a combo for the UK equity income sector.
We are though already overweight there so that is my reluctance.

As for NAIT, I agree with your points entirely but I am not necessarily spending the divs today so maybe we will get a chance for a better buy in point between now and Xmas?

I am also developing an interest in Mid Wynd (MWY) following my recent reading of the manager’s views on defensive growth in The Investment Trusts Handbook (a free download even in Kindle format and well worth a read). This also offer a low yield but may be a smart buy in today’s markets. Their Top ten is worth a read too, with it’s number 1 holding in LVMH etc. Over 1, 3, 5 and 10 years they have held up well compared with other Global ITs too.

I would highly value any suggestions that you or other Forum users may also have today.

Gadge

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Re: Gadge GIP new investment options and half year review

#158449

Postby richfool » August 10th, 2018, 10:09 am

Hi Gadge, Thanks for your comprehensive response. Noted that you are also focussing on TR and thus growth is included in the portfolio objectives.

Gadge
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Re: Gadge GIP new investment options and half year review

#159636

Postby Gadge » August 14th, 2018, 6:36 pm

Disappointing that no one is board with any ideas on this but I guess the audience here may be smaller than it used to be on the fool?

Took another look at TRY and if anything it looks like a good time to be selling it rather than buying from a quick look at a long term chart. Still it may be another story over the coming months.

I quite like John Barons recent idea of buying Japan Smaller Companies (JPS) now it is paying 4% on NAV annually. This income makes it a candidate for GIP and Japan / Small company focus would help with diversifying GIP and possible growth too.

Disclaimer....I bought JPS in real life for the same reasons.

I also quite like HICL too which would help with income and diversity.away from equities so that is another possible option. Of course, it does come with a large chunk of political risk. If Brexit is a cock up, which is certainly looking possible, then Corbyn could play havoc with the share price.

Gadge

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Re: Gadge GIP new investment options and half year review

#159731

Postby mickeypops » August 15th, 2018, 6:44 am

Hi Gadge.

It would be good to see an up to date list of holdings and their values within the GIP.

Just a thought - do you consider top ups to existing holdings, or are you specifically looking to expand the number of ITs in the portfolio?

Regards
MP

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Re: Gadge GIP new investment options and half year review

#159746

Postby OZYU » August 15th, 2018, 7:40 am

Gadge,

I am not up to date with the composition(last time I looked you had 14 holdings, many of which we hold in different portfolios), but if it is not in there, then I think IBT is worth considering on a long term basis, because Biotech might be volatile, but this field is bound to be increasingly lively on the corporate front and clinically productive in the future. If I was to chose between IBT and JPS, IBT would get my vote, but if there is room/funds, then holding both would do as two separate valid themes.


How is the basket performing?


Ozyu


Disc We held BIOG and switched to IBT a while ago when it switched policy.


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