Diversification

[PinkDalek]

... If this means the sale is less than 4*allowance (£49200) they won't even need to mention it on their tax return. ...

That is one of the conditions for those who are required to fill in Tax Returns. Another is rather more important, effectively do you have CGT to pay!

See 7 Capital gains summary on page TRG 4:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874084/SA150_English_Notes.pdf [2019/20 figures]

[dealtn]

Gawd knows why people mention active funds when the O/P has decided on trackers.

Perhaps because the OP says "... I am thinking ...what would be the best approach?" followed by " ... I'm thinking ...diversify into some sort of index tracker..."

Now if that sounds like "has decided" to you the fair enough don't comment on it, but to others that may well sound like someone who hasn't decided and is looking for helpful advice!

[NearlyThere]

It is GSK shares. I just googled spreadbetting and now have a headache

I think that if I was in your position and was looking long-term, I would take a risk and gradually diversify. However, if it was a different share or my timescale was shorter, then I think I would go for it. It depends on a variety of things, including the capital gain tied up in the shares (which dictates the timescale over which this can be done).

Chris

!Thanks Sounds like a sensible approach.

[tjh290633]

To illustrate that trackers can only follow the market. Also that there are better investments available.

TJH

Your illustration shows that an IT with a Global spread would have beaten a FTSE 100 tracker so you were comparing apples and oranges. It does not demonstrate IT's are better investment vehicles than trackers.

If you want to make a more realistic comparison then you need to select a more realistic benchmark. Maybe a Global tracker? The FTSE has been a pretty poor cousin to most major markets over the past 20 years.

You also need to make sure dividend income is excluded or reinvested for both vehicles.

Making IT vs tracker comparisons is a worthwhile exercise but some care needs to go into selection criteria.

BoE

I quoted share price, which indicates that dividend income was excluded. That would not be the case for an index tracker in accumulation form.

There are trackers and trackers. Witan has currently a mix of two indexes as its benchmark, taken from its latest factsheet:

Witan’s benchmark is a composite of 85% Global (MSCI All Country World Index) and 15% UK (MSCI UK IMI Index).

I was merely pointing out to the OP that he has to beware of trackers.

TJH

[Bubblesofearth]

There are trackers and trackers. Witan has currently a mix of two indexes as its benchmark, taken from its latest factsheet:

Witan’s benchmark is a composite of 85% Global (MSCI All Country World Index) and 15% UK (MSCI UK IMI Index).

I was merely pointing out to the OP that he has to beware of trackers.

TJH

Not wanting to prolong the agony here but maybe you could have compared Witan with the benchmark provided rather than the FTSE 100? What does that comparison look like and would it still prompt you to 'beware of trackers'? And does it take into account any leverage employed by Witan which will increase risk?

BoE

[tjh290633]

Not wanting to prolong the agony here but maybe you could have compared Witan with the benchmark provided rather than the FTSE 100? What does that comparison look like and would it still prompt you to 'beware of trackers'? And does it take into account any leverage employed by Witan which will increase risk?

BoE

You can see that if you look at their key features document. https://www.witan.com/media/1662/witan- ... -final.pdf

TJH

[Bubblesofearth]

You can see that if you look at their key features document. https://www.witan.com/media/1662/witan- ... -final.pdf

TJH

Thanks. It seems, eyeballing the chart on page 2, that the benchmark has done better over the 5 year period reported.

Maybe 'beware of IT's' is an appropriate message??

BoE

[tjh290633]

You can see that if you look at their key features document. https://www.witan.com/media/1662/witan- ... -final.pdf

TJH

Thanks. It seems, eyeballing the chart on page 2, that the benchmark has done better over the 5 year period reported.

Maybe 'beware of IT's' is an appropriate message??

BoE

Only in the last 12 months, according to the latest copy that I have. They were level pegging a year ago and marginally ahead up til then.

TJH

[Bubblesofearth]

Only in the last 12 months, according to the latest copy that I have. They were level pegging a year ago and marginally ahead up til then.

TJH

OK, for the sake of argument let's say there is little difference between them. And it seems we can now agree on the appropriate benchmark for Witan, i.e. that used by the firm itself. Given that, can you see how comparing Witans performance to a FTSE100 tacker is apples and oranges? And therefore how the conclusion 'beware of trackers, there are better investment opportunities' should not be drawn from such a comparison?

BoE

[tjh290633]

can you see how comparing Witans performance to a FTSE100 tacker is apples and oranges? And therefore how the conclusion 'beware of trackers, there are better investment opportunities' should not be drawn from such a comparison?

BoE

If you prefer, you can compare one index with another. Bear in mind that trackers can only ever underperform their index.

TJH

[Bubblesofearth]

can you see how comparing Witans performance to a FTSE100 tacker is apples and oranges? And therefore how the conclusion 'beware of trackers, there are better investment opportunities' should not be drawn from such a comparison?

BoE

If you prefer, you can compare one index with another. Bear in mind that trackers can only ever underperform their index.

TJH

It's not a question of what I prefer. You compared Witan's performance to that of the FTSE 100 and drew the conclusion that one should beware of trackers. It seems to me that you are not prepared to admit that was an error of logic so I think we'll leave it there.

BoE

[xeny]

Bear in mind that trackers can only ever underperform their index.

TJH

Surely as a whole active instruments can only ever underperform by an even greater amount by "virtue" of their greater fees?

[tjh290633]

Bear in mind that trackers can only ever underperform their index.

TJH

Surely as a whole active instruments can only ever underperform by an even greater amount by "virtue" of their greater fees?

No. Some actively managed investments can outperform their appropriate index or market. A lot do underperform, but if you look at the whole market as individual shares, some will underperform and some will out perform. From year to year, last year's underperformers may be this year's outperformers.

So far this year, the FTSE100 has fallen by 13.4%, the FTSE350HY by 19.9%. Of the shares in my portfolio, 22 have fallen by less than that, or risen, while 14 have fallen by more than that:

Epic     Change    Yield
WMH       42.74%   0.00%
KGF       24.47%   0.00%
ADM       24.08%   5.15%
RIO       23.07%   5.36%
BHP        9.21%   4.73%
RB.        6.77%   2.67%
PSON       3.96%   2.94%
S32        3.67%   1.69%
SGRO       1.29%   2.34%
AZN        1.12%   2.81%
SSE        0.42%   5.54%
ULVR       0.29%   3.33%
IMI       -0.42%   2.87%
UU.       -1.23%   4.59%
SMDS      -3.12%   3.22%
PHP       -4.61%   4.07%
DGE       -6.45%   2.33%
NG.       -6.72%   5.56%
VOD      -10.62%   6.19%
BATS     -10.71%   7.29%
BA.      -10.76%   4.60%
TSCO     -11.32%   4.29%
TATE     -14.52%   4.56%
IMB      -16.32%   8.80%
LGEN     -17.85%   7.06%
TW.      -18.95%   0.00%
GSK      -21.71%   5.74%
CPG      -23.33%   0.00%
AV.      -23.50%   6.56%
BLND     -24.51%   3.48%
BT.A     -30.21%   0.00%
MKS      -36.89%   0.00%
RDSB     -41.53%   3.82%
BP.      -42.80%   7.50%
LLOY     -42.83%   0.00%
MARS     -45.99%   0.00%

Av.Chg    -9.05%   3.59%

In fact my portfolio has fallen by just over 6%, but that does include reinvested income. In the last financial year, my costs were 0.09% of the value of my portfolio at 5th April 2020. Costs were 1.25% of my dividend income. Were I to be investing in collective investments the costs would be considerably higher. From https://www.janushenderson.com/en-gb/in ... trust-plc/ I see that for City of London IT the annual management charge is 0.325% of net assets. It will have other charges, and the OCF is quoted as 0.39%, some 4 times my costs.

TJH