IanTHughes wrote:It really is not that difficult
Ian
So can you share that research then in that case?
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IanTHughes wrote:It really is not that difficult
Ian
Alaric wrote:IanTHughes wrote:What I do is investigate the returns achieved on publicly available HYP's and what might have been achieved if the same funds had been invested in a series of Investment Trusts.
How many "publicly available" HYPs are operated with safety margins? Particularly as maintaining payouts during 2008 would have involved either selling or holding cash reserves.
Alaric wrote:But that's not totally the point. The comparison is ITs against HYPs operated without safety margins. A series of articles last year about how to select shares for a HYP made no mention of a need to hold back part of the dividend income if using the HYP as an annuity replacement.
dealtn wrote:IanTHughes wrote:It really is not that difficult
So can you share that research then in that case?
Alaric wrote:On the other hand, if an investor's primary investment objective is a reasonably secure and rising income from dividends, a collection of ITs is likely to be better at delivering that than a strategy of selecting higher yielding shares with an added self imposition of not being willing to sell to supplement or maintain income.
IanTHughes wrote:dealtn wrote:IanTHughes wrote:It really is not that difficult
So can you share that research then in that case?
Sorry, but no.
A few months ago I did start such a thread but I had it pulled as a result of the anti-HYP Trolls that rather spoiled the exercise. You will just have to accept what I now call the Lootman proof. "It is true because I say it is"!
Also, I find it curious that you are asking me to provide my research but, when Alaric claims:Alaric wrote:On the other hand, if an investor's primary investment objective is a reasonably secure and rising income from dividends, a collection of ITs is likely to be better at delivering that than a strategy of selecting higher yielding shares with an added self imposition of not being willing to sell to supplement or maintain income.
You simply accept it as valid. Why is that?
Ian
IanTHughes wrote:You simply accept it as valid. Why is that?
Alaric wrote:IanTHughes wrote:You simply accept it as valid. Why is that?
Investing directly in ordinary shares gives no guarantee or certainty of any sort of maintenance of dividend income. Dividends are vulnerable not only to economic conditions but also the whims of boards of directors and to a lesser extent other shareholders. If security and maintenance of dividend income is a primary concern, investing in a collective that at least attempts this as a matter of policy takes some of the unknowns out of the picture. It's something ITs can offer, a unique selling point even, which parallel alternatives such as OEICs and ETFs are unable to deliver.
Alaric wrote:As far as IT past performance on dividends is concerned, are there not several long established ones with a history of dividend maintenance and dividend increases stretching back decades? They may come under pressure in the next year or two, but no immediate cuts unlike many other collective equity investments.
IanTHughes wrote:To be clear, I am not saying that HYP beats ALL ITs but, according to the ones that I have investigated, HYP beats most of them, sometimes in all of those three categories, enough for me to conjecture that HYP would beat a basket of ITs.
Arborbridge wrote:Wizard wrote:If, as Arb says, an HYP as described by PYAD or the TLF rules cannot include multiple ITs, why would HYPTUSS include ITs as an option to be tracked? Maybe to allow for the Breelander Convetion, but surely that does not need the now provided AIC sectoral granularity. I therefore formally object to the use of the name HYPTUSS, from now on that tool can only be called hypTUSS or HYTUSS. Alternatively, as we now have PYADic or pure HYP and TLF HYP I insist we also add HYPTUSSHYP to the lexicon, as it seems the parties behind the so called HYPTUSS believe ITs should be included in an HYP. Why else would they provide the functionality to allow it?
Please take this in the light hearted way it is intended
Well, it happens to be called HYPTUSS because it developed as a tool for that use. However, I use a HYPTUSS for all of my ITs and find it very useful. The IT basket is easily accounted for separately from the HYP by using this spreadsheet.
To conclude that the existence of a possibility of using the spreadsheet for ITs means that developers suggest ITs £should be included" as part of a HYP is wide of the mark. It developed because it was possible using the same software, so why not do it?
I may be wrong, but I think one might also train a HYPTUSS to pick up OIECs, though I;m not sure about that.
Arb.
Alaric wrote:IanTHughes wrote:To be clear, I am not saying that HYP beats ALL ITs but, according to the ones that I have investigated, HYP beats most of them, sometimes in all of those three categories, enough for me to conjecture that HYP would beat a basket of ITs.
How does your "HYP" handle dividend cuts and cancellations?
Alaric wrote:Gengulphus wrote: So very much like an IT's methods of dividend-smoothing in those respects, which is hardly surprising because the main difference between them is that the HYPer is managing the dividend-smoothing themselves and the IT investor is getting IT managers to do it for them.
My term "unmanaged HYP" was intended to describe the HYP run without IT style safety margins, which has been the case for the demonstration HYPs. Clearly that's more volatile in terms of income and thus less suitable as an annuity replacement than a set of ITs investing in at least some of the same stocks. That's presuming the ITs follow the usual practice of not distributing all the dividends received in normal circumstances but over distributing when there's a dividend shortfall. Without rules inhibiting selling, ITs would also be better able to maintain sector diversification if that formed part of their investment objectives.
Gengulphus wrote:If the answer to my question is that you're using "IT style safety margins" to mean something else, I'll need to know what before I can respond sensibly about it!
IanTHughes wrote:Alaric wrote:IanTHughes wrote:To be clear, I am not saying that HYP beats ALL ITs but, according to the ones that I have investigated, HYP beats most of them, sometimes in all of those three categories, enough for me to conjecture that HYP would beat a basket of ITs.
How does your "HYP" handle dividend cuts and cancellations?
Very easily!
Ian
Wizard wrote:IanTHughes wrote:Alaric wrote:How does your "HYP" handle dividend cuts and cancellations?
Very easily!
As presumably will any portfolio where income is not being drawn. My recollection is you are still in the build phase.
IanTHughes wrote:Alaric wrote:IanTHughes wrote:You simply accept it as valid. Why is that?
Investing directly in ordinary shares gives no guarantee or certainty of any sort of maintenance of dividend income. Dividends are vulnerable not only to economic conditions but also the whims of boards of directors and to a lesser extent other shareholders. If security and maintenance of dividend income is a primary concern, investing in a collective that at least attempts this as a matter of policy takes some of the unknowns out of the picture. It's something ITs can offer, a unique selling point even, which parallel alternatives such as OEICs and ETFs are unable to deliver.
Who ever said otherwise?Alaric wrote:As far as IT past performance on dividends is concerned, are there not several long established ones with a history of dividend maintenance and dividend increases stretching back decades? They may come under pressure in the next year or two, but no immediate cuts unlike many other collective equity investments.
Well, all I can do is repeat that, according to my research based on my records, HYP comes out ahead of many ITs for Income generation, capital appreciation and total return.
To be clear, I am not saying that HYP beats ALL ITs but, according to the ones that I have investigated, HYP beats most of them, sometimes in all of those three categories, enough for me to conjecture that HYP would beat a basket of ITs.
As I said, just do the research yourself, it really is not that hard to do.
Ian
Charlottesquare wrote:
What I do is forget the "rules" re individual holdings but instead blend them, effectively creating my own bespoke IT which holds both shares and IT's, covers most of the world, covers growth, emerging etc but also provides an income should I choose to take it.
I have no need that each and every holding has a high yield only that the portfolio as a whole has a 4% yield, that is I may have HFEL but I also have SMT or Fidelity China Spec Sits, both with pretty decent percentage gains over recent years.
In my opinion there is nothing that prevents a high yield strategy having a mix of high and low yielders providing the overall portfolio yield is above average (high), in my case that means overall aiming for 4% or higher and that includes the above two low yielders plus other low yielders like Monks, Mid Wynd and JP Morgan Emerging plus no yielders like Berkshire and JP Morgan Indian IT, despite holding these when last I checked my overall dividend yield was 4.05%.
Itsallaguess wrote:
One thing the HYP approach gets almost zero credit for, lost as it seems to be amongst the long stream of criticism over the years, is for acting as a stepping stone for many investors towards the more blended approach you've highlighted in your post, and I think that's a great shame really, because for many of us here that's exactly what it's been, and I think many of us are very grateful for that to have happened.
Itsallaguess
TopOfDaMornin wrote:The aim of the portfolio is steady annual income in 10 years time, mostly thru natural yield, but maybe thru part selling growth shares e.g. VWRL.
TopOfDaMornin wrote:Itsallaguess wrote:
One thing the HYP approach gets almost zero credit for, lost as it seems to be amongst the long stream of criticism over the years, is for acting as a stepping stone for many investors towards the more blended approach you've highlighted in your post, and I think that's a great shame really, because for many of us here that's exactly what it's been, and I think many of us are very grateful for that to have happened.
Itsallaguess
Well said. The HYP approach had helped me and others on the road to investing. Even if we now adopt other approaches.
TopOfDaMornin wrote:I have no need that each and every holding has a high yield only that the portfolio as a whole has a 4% yield, that is I may have HFEL but I also have SMT or Fidelity China Spec Sits, both with pretty decent percentage gains over recent years.
In my opinion there is nothing that prevents a high yield strategy having a mix of high and low yielders providing the overall portfolio yield is above average (high), in my case that means overall aiming for 4% or higher and that includes the above two low yielders plus other low yielders like Monks, Mid Wynd and JP Morgan Emerging plus no yielders like Berkshire and JP Morgan Indian IT, despite holding these when last I checked my overall dividend yield was 4.05%.
I too am now reaching this conclusion. Wish I had reached it 10 years ago.
Off course, it opens the question, what is a 'well choosen IT'?
I too suspect , going forward, a world tracker, with dividend and drawdown may out perform my HYP. I bought VWRL earlier this year.
From reading this thread, I am still unclear on my next course of actions.
1. Sell some HYPs to buy the existing ITs (I feel about 35% ITs is about right) ? If so, should I sell part of the highest value HYP shares to bring them down to the mean? I would have to 'move' approx £35k of HYP into ITs. That seems a lot of selling but maybe best for the long term.
2. Buy new ITs focused on growth, or world tracker?
3. Do nothing? This is what I have done for the last 9 months. Not sure if this plan has worked.
The aim of the portfolio is steady annual income in 10 years time, mostly thru natural yield, but maybe thru part selling growth shares e.g. VWRL.
TDM
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