Raptor wrote:How does this affect having it in my SIPP for tax purposes?
Raptor.
No affect whatsoever if inside the wrapper of an ISA or SIPP.
Though to be honest with you Raptor I think EAT is presently somewhat overvalued.
• In total returns the share price has risen 36.6% in last 12-month (in Sterling terms)
• In total returns the NAV has risen by 23.8% in the last 12-month (in Sterling terms)
• However, in Euro terms, the NAV total return has only been 15.6% in the last 12-month
• Was on an 8% discount 12-month ago, now on a slight premium
At this particular juncture in time, you’d do well to consider the added currency risk of 100% exposure to the Euro. Furthermore, EAT does not us gearing nor does it currency hedge.
As for the Canada registered Middlefield Income Trust:
• Very biased towards mostly Canadian energy and REIT stocks with a 20% exposure to the US
• Has experienced a very bumpy ride in the last 5 years
• 5-year share price and NAV total returns weighing in at a disappointing 25% and 44.7% respectively
• Currently on a discount of 10.7% and yield of 5%
• High ongoing charges of 1.26% per annum
• Considered by rating agencies to be of above average volatility and risk, which makes it more or less on par with your Henderson Far East Income holding
Unfortunately, in terms of ITs focused on Europe (ex-UK) income opportunities they are very few and far between. While there’s sufficient Europe (ex-UK) ITs with growth mandates I don’t think this is the kind of IT being considered as suitable on this occasion. This is why EAT has become more in demand with investors seeking income even though its ‘income’ is in fact being paid out of capital.
So Raptor, basically what to do? Delay plans to expand into ‘new’ territory for the time being or use funds to add to existing holdings.
BarrenWuffett wrote:You may be happy with DIG but I certainly would not.
Likewise, I would have gone for the ever dependable City of London (CTY).