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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.

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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?

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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.

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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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Re: Gadge GIP new investment options and half year review

#161125

Postby Gadge » August 21st, 2018, 10:54 pm

Hi Mickeypops.

I am not trying to hold more ITs so do consider top ups too.

Gadge

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Re: Gadge GIP new investment options and half year review

#161129

Postby Gadge » August 21st, 2018, 11:15 pm

Hi Ozyu

All income to date in GIP was invested last December in BB Bion to give us an income producing Biotech IT.

Since that time IBT have also joined in with several other ITs paying 4% of net asset value annually out as a "dividend". This happened too late for them to be considered for GIP. In real life I hold both these biotech It's. I have held IBT for some years now and quite like them.

I agree with you that income and biotech is an attractive proposition at this time.

GIP also holds EAT and JPGI. Both do the same thing with dividend payments calculated from NAV

GIP performance has been slow this year and will be reported on at Xmas. It is valued at 123k I think at the moment with about 4.2k in divs since Dec 17 waiting to be invested.

My watchlist of possible investments on the other hand have shot the lights out (JPGI, HICL, Monks and Merchants) which is a bit annoying, although I do hold 2 of these in real life.

Gadge

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Re: Gadge GIP new investment options and half year review

#165781

Postby Gadge » September 12th, 2018, 7:16 am

After reviewing emerging markets this morning, I have decided to add Blackrock Frontiers Investment Trust to the watchlist for a home for our 2018 divs in Dec.

Why?

I took a look at this video.
Liked the guy and would love to buy it but it is a Fund and my preference is for ITs where possible in GIP.

http://citywire.co.uk/investment-trust- ... st-insider

So took a gander at ITs in emerging markets and global smaller cap.
Over all winner over 5 years was Oryx but no divs payable so that's out for GIP.
Second was JP Morgan Emerging but small Divs.

Blackrock Emerging was up there with them and pays a decent dividend.

Emerging markets are suffering a terrible 2018 so prices have fallen quite a bit recently (and unlikely to rise much soon).
I find this buy in point quite attractive on a long term basis as an investment idea for GIP and we will collect those divs while we wait for a change in the economics/politics that affect them.

Gadge

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Re: Gadge GIP new investment options and half year review

#165786

Postby Gadge » September 12th, 2018, 7:41 am

Just reviewed Jupiter Emerging versus BR Frontiers and this year Jupiter have come off worse but over 5 and 10 years not much in it really,
Br is amazingly still on a premium to NAV. Yields slightly favour BR according to HL so probably BR still in the lead.

Anyone else got any thoughts on the two ???

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Re: Gadge GIP new investment options and half year review

#165791

Postby mc2fool » September 12th, 2018, 8:20 am

Gadge wrote:I took a look at this video.
Liked the guy and would love to buy it but it is a Fund and my preference is for ITs where possible in GIP.

Eh? It is an IT. Jupiter Emerging & Frontier Income (JEFI) investment trust.

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Re: Gadge GIP new investment options and half year review

#165805

Postby richfool » September 12th, 2018, 9:06 am

Hi Gadge, If you are bold enough to look at Emerging Markets currently, there is a JP Morgan Global Emerging Market Income trust (JEMI) with a 4.39% yield.

http://citywire.co.uk/money/investment- ... undID=3472

Sector:
http://citywire.co.uk/money/investment- ... ePeriod=12

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Re: Gadge GIP new investment options and half year review

#166005

Postby Gadge » September 13th, 2018, 6:09 am

mc2fool

I was talking about this fund ...

https://www.jupiteram.com/UK/en/Individ ... 00B4PF5918

Will take a look at the IT you suggest though thanks.
Gadge

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Re: Gadge GIP new investment options and half year review

#166006

Postby Gadge » September 13th, 2018, 6:10 am

Richfool

Will do

Cheers

Gadge

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Re: Gadge GIP new investment options and half year review

#166007

Postby Gadge » September 13th, 2018, 6:44 am

took a quick gander at all three...

Jupiter and BE are on a premium now. JP Morgan is on a discount.

Jupiter IT is run by the same guy as their fund.
Holding look similar but not identical from the information I have to hand.

Not had time to look at costs or performances and fed up trying to do this on a phone. Will do more later on a notebook when at home.

Thanks again for the suggestions.

're boldness comment. I looked at this yesterday for my real money and ended up opting for two technology trusts instead (Polar Cap and Allianz).
Conclusion: It is easier to be bold with theoretical dosh. :lol:

Gadge

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Re: Gadge GIP new investment options and half year review

#166009

Postby Gadge » September 13th, 2018, 6:55 am

Just spotted a massive problem with investing GIP into JEMI or emerging markets.

I already hold JEMI in GIP :shock:
it was part of my original selections.
After this terrible year, it may need a top up though.

Senior moment. :roll:

Back to the drawing board......

to be cont.

Gadge

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Re: Gadge GIP new investment options and half year review

#166068

Postby mc2fool » September 13th, 2018, 12:00 pm

Gadge wrote:I was talking about this fund ...

https://www.jupiteram.com/UK/en/Individ ... 00B4PF5918

Uh? You said:
Gadge wrote:I took a look at this video.
Liked the guy and would love to buy it but it is a Fund and my preference is for ITs where possible in GIP.

http://citywire.co.uk/investment-trust- ... st-insider

I don't know how you made the leap to "it" being that fund from the page with the video, especially as the page is headed "Investment Trust Insider" and the first words immediately below the video are:

"Jupiter Emerging & Frontier Income (JEFI) investment trust raised £90 million at its flotation last year. Fund manager Ross Teverson visited our studio to explain how he is looking to generate a 4% dividend yield from smaller and medium-sized companies in some of the fastest growing economies in the world." :!:

Gadge wrote:Senior moment. :roll:

Perhaps that should be moments :D


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