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Investment Trust Beginners Question

Investment discussion for beginners. Why you should invest your money, get help getting started
evilbungle
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Investment Trust Beginners Question

#419636

Postby evilbungle » June 15th, 2021, 11:16 am

Hi, I have been investing for a few years now but have recently started to look at ITs instead of Shares. I have dipped the toe in by buying some units in a couple of ITs -

Jupiter Income Trust I Acc (0P0000U20P.L) and Schroder Asian Income Maximiser Z Inc (GB00B52QVQ30.L)

My question is how do I find out about these? Essentially I am receiving payments from Schroder but nothing from Jupiter, I am sure that this is due to reduced payments because of the Pandemic etc... but wondered if there was somewhere I can see for sure? I have tried googling the IT name and followed links to Yahoo and HL etc... but these don't seem to say what payments we should be receiving (or not).

Sorry for the newbie queries but I have always avoided ITs because I wasn't sure how they worked.

pje16
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Re: Investment Trust Beginners Question

#419638

Postby pje16 » June 15th, 2021, 11:26 am

I have just done the same thing, like you, for the first time
My selection was Evenlode Global Equity
https://www.trustnet.com/factsheets/o/d ... bal-equity
Trustnets site is a good resource
though my intial recommendation came from a shares magazine write up

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Re: Investment Trust Beginners Question

#419641

Postby Alaric » June 15th, 2021, 11:33 am

evilbungle wrote: I have dipped the toe in by buying some units in a couple of ITs -

Jupiter Income Trust I Acc (0P0000U20P.L) and Schroder Asian Income Maximiser Z Inc (GB00B52QVQ30.L)


Are you sure these are Investment Trusts (ITs)? From the titles they sound rather more like OEICs (Open Ended Investment Companies) which were successors to Unit Trusts.

If searching for additional information, the websites of Jupiter and Schroder would be a starting point. You won't expect to see any income payments from the Jupiter Trust as the "Acc" in the title stands for accumulation. In other words all dividends are automatically reinvested. Be aware that if held outside an ISA or SIPP, holding Acc units introduces additional record keeping requirements for taxation.

pje16
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Re: Investment Trust Beginners Question

#419642

Postby pje16 » June 15th, 2021, 11:36 am

Correct, my one is an OEIC (and held in ISA)

doolally
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Re: Investment Trust Beginners Question

#419647

Postby doolally » June 15th, 2021, 11:47 am

evilbungle wrote:Hi, I have been investing for a few years now but have recently started to look at ITs instead of Shares. I have dipped the toe in by buying some units in a couple of ITs -

Jupiter Income Trust I Acc (0P0000U20P.L) and Schroder Asian Income Maximiser Z Inc (GB00B52QVQ30.L)

My question is how do I find out about these? Essentially I am receiving payments from Schroder but nothing from Jupiter, I am sure that this is due to reduced payments because of the Pandemic etc... but wondered if there was somewhere I can see for sure? I have tried googling the IT name and followed links to Yahoo and HL etc... but these don't seem to say what payments we should be receiving (or not).

Sorry for the newbie queries but I have always avoided ITs because I wasn't sure how they worked.

Pedants might disagree, but if you are used to buying single-company shares, ITs are really no different. ITs are basically companies who own shares in other companies. They are quoted on the London Stock Exchange just like single companies. They pay out dividends just like single companies. Prices are dynamic, potentially changing every second throughout the trading day, just like single companies.

What you have bought is an OEIC, previously known as a Unit Trust. There are some similarities to ITs, but prices are set once per day, and reporting and dividend payments may be less obvious than for an IT. Never really understood why people buy OEICs

doolally

evilbungle
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Re: Investment Trust Beginners Question

#419653

Postby evilbungle » June 15th, 2021, 12:01 pm

Alaric wrote:Are you sure these are Investment Trusts (ITs)? From the titles they sound rather more like OEICs (Open Ended Investment Companies) which were successors to Unit Trusts.


Not sure at all, Hence the questions. I got them from an article on good Investment Trusts for beginners but may have slipped up and brought the wrong thing, I will need to do some checking. Is there a way to tell if it is an OEIC?

I didn't know that about the ACC in the name, but it makes sense.

Anyone have any recommendations of good places to learn some basics as clearly my initial research was lacking?

pje16
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Re: Investment Trust Beginners Question

#419654

Postby pje16 » June 15th, 2021, 12:03 pm

doolally wrote:Never really understood why people buy OEICs
doolally

I did it because I have substantial share holdings of my own choices already, and thought that I would let the professionals decide what to invest on my behalf for a change
I did my research on what it holds already and can track it whenever I want to
I am not anti any suggestions as to why that might be wrong

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Re: Investment Trust Beginners Question

#419655

Postby Hypster » June 15th, 2021, 12:15 pm

evilbungle wrote:Anyone have any recommendations of good places to learn some basics as clearly my initial research was lacking?


This chap writes a lot about ITs.
https://www.johnbaronportfolios.co.uk/s ... cpage=FAQs

In addition to his own website, he also has a monthly column in the Investor's Chronicle (his next one should be in the issue published on Friday) and he's also written a book called 'Investment Trusts: Unlocking the City's Best Kept Secret'.

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Re: Investment Trust Beginners Question

#419660

Postby doolally » June 15th, 2021, 12:32 pm

pje16 wrote:
doolally wrote:Never really understood why people buy OEICs
doolally

I did it because I have substantial share holdings of my own choices already, and thought that I would let the professionals decide what to invest on my behalf for a change
I did my research on what it holds already and can track it whenever I want to
I am not anti any suggestions as to why that might be wrong

Sorry, I wasn't clear. I meant to say I never really understood why people buy OEICs rather than ITs

doolally (holder of quite a few ITs)

pje16
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Re: Investment Trust Beginners Question

#419663

Postby pje16 » June 15th, 2021, 12:38 pm

Ahh that makes perfect sense now - thanks
my choice was governed by the underlying investments, not the the type
and OEIC seems more common these days
pje16 holder of 1 OEIC (at the moment !)

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Re: Investment Trust Beginners Question

#419665

Postby mc2fool » June 15th, 2021, 12:47 pm

doolally wrote:What you have bought is an OEIC, previously known as a Unit Trust.

No, not "previously known as", OEICs and UTs are different, with the main difference from an investors point of view is that UTs have a bid-offer spread and OEICs don't. Here's one explanation (note the tax comments in the article are now out of date, but the rest is still good).

https://www.lovemoney.com/news/27554/unit-trusts-oeics-open-ended-investment-companies-difference

evilbungle wrote:Hi, I have been investing for a few years now but have recently started to look at ITs instead of Shares. I have dipped the toe in by buying some units in a couple of ITs -

Jupiter Income Trust I Acc (0P0000U20P.L) and Schroder Asian Income Maximiser Z Inc (GB00B52QVQ30.L)

My question is how do I find out about these? Essentially I am receiving payments from Schroder but nothing from Jupiter, I am sure that this is due to reduced payments because of the Pandemic etc... but wondered if there was somewhere I can see for sure? I have tried googling the IT name and followed links to Yahoo and HL etc... but these don't seem to say what payments we should be receiving (or not).

It's normally best practice to find out about an investment before you buy it. :D

As others have noted, neither of these is an Investment Trust, both are actually Unit Trusts. Trustnet is a reasonable source for information about UTs & OEICs.

Jupiter Income Trust I Acc https://www.trustnet.com/factsheets/o/09pu/jupiter-income-trust and
Schroder Asian Income Maximiser Z Inc https://www.trustnet.com/factsheets/o/izb5/schroder-asian-income-maximiser-z-inc

A note of caution about identifiers, Yahoo makes up its own identifiers for OEICs/UTs and 0P0000U20P.L is one. The proper, and much more universally recognised, identifier is the ISIN of which GB00B52QVQ30 is one. Note, no ".L" 'cos the GB identifies it as domiciled in the UK and in any case OEICs/UTs aren't traded on the London Stock Exchange (".L").

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Re: Investment Trust Beginners Question

#419667

Postby GrahamPlatt » June 15th, 2021, 12:49 pm

Surprised that no one has yet mentioned www.theaic.co.uk - wonderful resource.

pje16
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Re: Investment Trust Beginners Question

#419669

Postby pje16 » June 15th, 2021, 12:53 pm

Thanks @mc2fool
I didn't know about the spread, I saw the prices were the same and thought it was unusual !
Everyday's a schoolday :D

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Re: Investment Trust Beginners Question

#419675

Postby monabri » June 15th, 2021, 1:02 pm

GrahamPlatt wrote:Surprised that no one has yet mentioned http://www.theaic.co.uk - wonderful resource.


Yep...beat me to it!

(and of course, the providers own website & annual report(s) is always worth having a view).

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Re: Investment Trust Beginners Question

#419680

Postby monabri » June 15th, 2021, 1:28 pm

doolally wrote:
evilbungle wrote:Hi, I have been investing for a few years now but have recently started to look at ITs instead of Shares. I have dipped the toe in by buying some units in a couple of ITs -

Jupiter Income Trust I Acc (0P0000U20P.L) and Schroder Asian Income Maximiser Z Inc (GB00B52QVQ30.L)

My question is how do I find out about these? Essentially I am receiving payments from Schroder but nothing from Jupiter, I am sure that this is due to reduced payments because of the Pandemic etc... but wondered if there was somewhere I can see for sure? I have tried googling the IT name and followed links to Yahoo and HL etc... but these don't seem to say what payments we should be receiving (or not).

Sorry for the newbie queries but I have always avoided ITs because I wasn't sure how they worked.

Pedants might disagree, but if you are used to buying single-company shares, ITs are really no different. ITs are basically companies who own shares in other companies. They are quoted on the London Stock Exchange just like single companies. They pay out dividends just like single companies. Prices are dynamic, potentially changing every second throughout the trading day, just like single companies.

What you have bought is an OEIC, previously known as a Unit Trust. There are some similarities to ITs, but prices are set once per day, and reporting and dividend payments may be less obvious than for an IT. Never really understood why people buy OEICs

doolally


I guess that what doolally is saying that when it comes to buying selling ITs or single shares, one can (usually) buy/sell in an instant within trading hours and there is often a difference called "the spread" between buying and selling price. With OEICS, the price is set at a fixed point in time and you can't be absolutely sure what price you are buying/selling at the deal goes through because of the time lag.

I would offer that there is some things that one needs to note between "single shares" and "Investment Trusts".

- ITs are managed collectives of individual assets which might include individual shares (along with other assets such as cash, bonds etc) - your investment is spread out over many holdings.
- With ITs, you are delegating management to a.n.other and it's board of directors.
- ITs can borrow ("gear") to invest
- ITs can build up reserves to draw on in times of difficulty (eg continued dividend payments throughout things like Covid when many companies held and or cut dividends)
- ITs can trade about the value of the assets that they hold (above Net Asset Value, NAV) or even below their calculated NAV.
- ITs can offer the retail investor the opportunity to diversify into areas (countries, assets types, markets) readily at reasonable cost.
- ITs are "closed" - ie. there is a fixed number of shares (OEICS are open and new money generates new shares).

More on Investment Trust here...
https://en.wikipedia.org/wiki/Investment_trust

Dod101
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Re: Investment Trust Beginners Question

#419685

Postby Dod101 » June 15th, 2021, 1:43 pm

There are or have been numerous threads re the differences between OEICs, Unit Trusts and ITs and it would be well worth while for the OP to find them and read them. In fact now that I think about it it is a shame that there is not a permanent, easily accessible record on this site, because it is one of these subjects that crops up regularly.

Dod

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Re: Investment Trust Beginners Question

#419686

Postby monabri » June 15th, 2021, 1:48 pm

Dod101 wrote:There are or have been numerous threads re the differences between OEICs, Unit Trusts and ITs and it would be well worth while for the OP to find them and read them. In fact now that I think about it it is a shame that there is not a permanent, easily accessible record on this site, because it is one of these subjects that crops up regularly.

Dod



"Yes" and "Yes"

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Re: Investment Trust Beginners Question

#419687

Postby nmdhqbc » June 15th, 2021, 1:57 pm

evilbungle wrote:Anyone have any recommendations of good places to learn some basics as clearly my initial research was lacking?


i just searched "investment trust vs open ended fund" on youtube and watched the video below. seems like a pretty good overview. the only thing he fails to mention is that IT's do not have to pay out all of their income each year. they can hold some back for the bad years allowing many to have long records of increasing the dividend each year. to avoid confusion i had for a long time - they normally just keep the retained income invested, not in cash.

https://www.youtube.com/watch?v=jp7Pcs_Vk9E
Last edited by nmdhqbc on June 15th, 2021, 2:01 pm, edited 1 time in total.

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Re: Investment Trust Beginners Question

#419688

Postby Alaric » June 15th, 2021, 2:00 pm

mc2fool wrote:No, not "previously known as", OEICs and UTs are different, with the main difference from an investors point of view is that UTs have a bid-offer spread and OEICs don't.


If the "fund" has a historic track record and is now an OEIC, it likely used to be a Unit Trust and at some stage converted.

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Re: Investment Trust Beginners Question

#419690

Postby mc2fool » June 15th, 2021, 2:19 pm

Alaric wrote:
mc2fool wrote:No, not "previously known as", OEICs and UTs are different, with the main difference from an investors point of view is that UTs have a bid-offer spread and OEICs don't.

If the "fund" has a historic track record and is now an OEIC, it likely used to be a Unit Trust and at some stage converted.

Some UTs did convert to OEICs, and it is, of course, a given that any (now) OEIC that dates to before 1997 started off as a UT and converted, but that doesn't mean that what are called OEICs today were previously called UTs, which is the point I was answering.

In the OP's case both of the funds are UTs, with the Jupiter one being launched in 1987 and the Schroder in 2010.


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