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International Shares, how do you define HIGH YIELD

General discussions about equity high-yield income strategies
Wizard
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International Shares, how do you define HIGH YIELD

#166671

Postby Wizard » September 16th, 2018, 10:31 am

Not sure if this comment was meant generally about the discussion of the US shares Gadge has highlighted or any one of them specifically. But surely we should not be judging these non-UK shares against a UK benchmark yield to determine if they are high yield or not. The US typically gives a lower yield, the Wall Street Journal gives an average yield figure of 2.06% for the Dow Industrial Average at present (not sure how calculated). So surely that c.2% is a more reasonable benchmark for a US listed share to be discussed here, because by definition the holder / buyer is specifically looking for US exposure.

If that is accepted then some shares in the posts above may not clear that hurdle rate, but more will clear that than applying a FTSE 100 average yield hurdle. However, taking this thinking one step further, as this is not an HYP board an investor may have a strategy that accepts individual shares below a hurdle rate as long as the portfolio overall beats that hurdle level. Such an approach would allow them to address matters such as explicitly balancing yield and capital growth which HYP does not.

So if, somebody were to start a thread on just Nvidia (continuing my example) it would clearly not be right for this board. But if the post was about a basket of US shares that overall beat the average yield of the Dow Industrial Average and included Nvidia then I would have thought that is perfectly legitimate to discuss that on this board.

It would be interesting to understand what others think.

Terry.

Moderator Message:
Edited. Good question on how do you define "high yield" in non-UK shares, moved from "International Shares as part of High yield Portfolio. Created Seperate thread. Raptor.

tjh290633
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Re: International Shares, how do you define HIGH YIELD

#166714

Postby tjh290633 » September 16th, 2018, 1:25 pm

I think that, if you are building a portfolio, exclusively with US shares, it does make sense to use a relevant hurdle rate. I am not so sure if this applies if you are mixing shares from different countries, because decisions on topping up, for example, may be distorted.

TJH

Wizard
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Re: International Shares, how do you define HIGH YIELD

#166729

Postby Wizard » September 16th, 2018, 3:23 pm

tjh290633 wrote:I think that, if you are building a portfolio, exclusively with US shares, it does make sense to use a relevant hurdle rate. I am not so sure if this applies if you are mixing shares from different countries, because decisions on topping up, for example, may be distorted.

TJH

By that logic presumably you would use the appropriate yield from the highest yielding market, rather than just defaulting to the UK?

Terry.

tjh290633
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Re: International Shares, how do you define HIGH YIELD

#166737

Postby tjh290633 » September 16th, 2018, 4:57 pm

Wizard wrote:
tjh290633 wrote:I think that, if you are building a portfolio, exclusively with US shares, it does make sense to use a relevant hurdle rate. I am not so sure if this applies if you are mixing shares from different countries, because decisions on topping up, for example, may be distorted.

TJH

By that logic presumably you would use the appropriate yield from the highest yielding market, rather than just defaulting to the UK?

Terry.

Logical. Alternatively use the median yield of your own holdings as the minimum yield for topping up. I.e., create your own individual index.

TJH

Pastcaring
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Re: International Shares, how do you define HIGH YIELD

#166871

Postby Pastcaring » September 17th, 2018, 10:39 am

I don' t like silly acronyms but rules are rules

Local taxation needs to be taken into account,
IE different taxation treatment of dividend to capital gain.

In Australia it is tax advantaged to take dividends,thus high dividend yields.Some of my shares are on a gross yield of 9%.

In the US it is advantageous to take capital growth over dividends,thus low dividends.

This really distorts looking at yield only and using acronyms.

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Re: International Shares, how do you define HIGH YIELD

#166890

Postby Gengulphus » September 17th, 2018, 11:24 am

I basically find defining 'high yield' in a market-independent way rather too difficult a problem! And would suggest an alternative approach, namely to decide on the diversification by markets that you want, allocate your capital accordingly between them, and then choose a suitable level at which 'high yield' starts for each market.

Gengulphus


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