The Lemon Fool

Dod101 wrote:Thanks. I did not know about the IT heading for the moon, but the fact is that many ITs are boring, which is surely good. We do not want excitement from investment trusts, but long term investment horizons leading to good results on the whole.

Dod

Sorry, what is this "we"? Is it the royal "we"? Sure this is the "High Yield...." board, but there was no remarks about yield in the OP or article linked.

Personally I wouldn't invest in as many IT's as I do if they were as limited as you suggest. YES I do invest in many I regard as boring to many, but come on, I know that you invest in Scottish Mortgage (SMT), JUST how much off market investments are they making?

Ok, they do tell investors, the point was that you and I invest in a IT that is "not boring", I do so because I enjoy the ride. However, given that this is the "High Yield" board, defend our actions!

Hell just defend your argument that IT's are "boring". There is everything from space craft to ships in the mix.

Ps Ship is a ticker for an IT, guess what it invests in.

moorfield wrote:Young investors are more inclined to opt for investment trusts over individual stocks.

Isn't limited size of portfolio going to correlate with a preference for funds and investment trusts? Commissions make it uneconomic to diversify in individual Company shares with relatively small amounts to invest. Arguably age and portfolio size correlate inversely.

Urbandreamer wrote:

Dod101 wrote:Thanks. I did not know about the IT heading for the moon, but the fact is that many ITs are boring, which is surely good. We do not want excitement from investment trusts, but long term investment horizons leading to good results on the whole.

Dod

Sorry, what is this "we"? Is it the royal "we"? Sure this is the "High Yield...." board, but there was no remarks about yield in the OP or article linked.

Personally I wouldn't invest in as many IT's as I do if they were as limited as you suggest. YES I do invest in many I regard as boring to many, but come on, I know that you invest in Scottish Mortgage (SMT), JUST how much off market investments are they making?

Ok, they do tell investors, the point was that you and I invest in a IT that is "not boring", I do so because I enjoy the ride. However, given that this is the "High Yield" board, defend our actions!

Hell just defend your argument that IT's are "boring". There is everything from space craft to ships in the mix.

Ps Ship is a ticker for an IT, guess what it invests in.

Good Heavens. You are not suggesting that we are in the interplanatery mix are you? That would get a bit OTT for me.

Dod

moorfield wrote:Young investors are more inclined to opt for investment trusts over individual stocks.

https://www.dailymail.co.uk/money/inves ... demic.html


Jolly sensible. No HYP nonsense for them.

Discuss.

Some interesting figures in the article.

My portfolio has increased by 19% (no new money other than some reinvested dividends) over the past 18 months. Some good individual stocks and a lot in Investment Trusts. 18 months ago I had 34% in ITs (similar to the 18-24 age group - I wish!) and the figure is now 55%. My ITs have served me well.

csearle wrote:Maybe I'm missing something here but (admittedly with hindsight) investment trusts can have a particular advantage over individual share holdings during a dividend-cutting pandemic because the trust manager can maintain the dividend.... Chris

For me this is just a minor advantage of ITs and the 2 main advantages to me are:
1) geographical and sector diversification, i.e. it's easier to invest in non-UK shares with ITs, and you can also target specific sectors e.g. tech, healthcare, resources, renewables
2) several more ITs have recently changed their dividend policy to pay a %NAV dividend (typically 4%) so you can effectively own a growth IT paying a decent yield out of capital, so a TR approach without having to manage which shares to top-slice for income. And more importantly for me, a yield that will hopefully grow faster than a typical high yield share or IT.

I do remember in approx 1969 buying into a Save & Prosper Unit trust that invested in Investment trusts, I think it was known as S&P ITU's. Although I've dabbled with endowment policies and directly held stocks, I've stuck with IT's ever since (though not the S&P ITU's). So they have spanned the age range as far as I'm concerned.

I think the advantages of ITs over 'funds' have been quite well discussed elsewhere but include also:

No worry about redemptions and having to keep cash for that 'in case'

Can more safely invest in unquoted companies as there cannot be forced redemptions and sales

Lower charges (often)

Can have some gearing

etc etc.
There was a link to a good article in the IC recently setting out more advantages, which Dod pointed out.
https://www.google.com/search?q=investo ... safe+hands

richfool wrote:I do remember in approx 1969 buying into a Save & Prosper Unit trust that invested in Investment trusts, I think it was known as S&P ITU's. Although I've dabbled with endowment policies and directly held stocks, I've stuck with IT's ever since (though not the S&P ITU's). So they have spanned the age range as far as I'm concerned.

I invested in those from 1959 to 1977, investing a small sum each month (£3 initially then £5 from 1967). Based on the subscriptions and the final resuilt, the IRR was 5.88%, not much to write home about. I found that funds with higher yields did better, M&G Dividend, for example, giving me 8.43% from 1975 to date. Some of the Commodity Funds did very well. Ebor Commodity, became Save & Prosper Commodity and is now JP Morgan Natural Resources, has given me 11.60% since 1970.

This effect is what led me to investing in higher yield shares, and thence to the HYP.

TJH

I'm new to ITs, so forgive my ignorance, I am asking in order to gain understanding. These two points below struck me as strange and I wouldn't mind someone explaining please.

scrumpyjack wrote:I think the advantages of ITs over 'funds' have been quite well discussed elsewhere but include also:
No worry about redemptions and having to keep cash for that 'in case'

But ITs often hold cash spare so they can continue to deliver dividends during lean times, so how is that different to holding cash for redemptions?

scrumpyjack wrote:Lower charges (often)

Fidelity Index World Fund P has 0.12%, but CTY is 0.38%, MYI is 0.65%. Quite the difference. I understand there's a difference that the Fidelity example is an index and the ITs in my example are active, but surely this still seems like higher charges unless active OEICs are much much more expensive compared to ITs?

stacker512 wrote:I'm new to ITs, so forgive my ignorance, I am asking in order to gain understanding. These two points below struck me as strange and I wouldn't mind someone explaining please.

scrumpyjack wrote:I think the advantages of ITs over 'funds' have been quite well discussed elsewhere but include also:
No worry about redemptions and having to keep cash for that 'in case'

But ITs often hold cash spare so they can continue to deliver dividends during lean times, so how is that different to holding cash for redemptions?

scrumpyjack wrote:Lower charges (often)

Fidelity Index World Fund P has 0.12%, but CTY is 0.38%, MYI is 0.65%. Quite the difference. I understand there's a difference that the Fidelity example is an index and the ITs in my example are active, but surely this still seems like higher charges unless active OEICs are much much more expensive compared to ITs?

They do not usually hold cash 'spare', indeed , most have modest gearing. The retained undistributed income is normally invested, not left sitting around as cash.

stacker512 wrote:I'm new to ITs, so forgive my ignorance, I am asking in order to gain understanding.

You might prefer to repost your question on the dedicated IT/UT board, perhaps rephrased to be a general question. You might find a wider audience there whose focus is IT/UT investing. viewforum.php?f=54

Frankly, I'm unsure how an IT thread ended up on the high yield shares board in the first place - I couldn't see anything 'high yield' in the OP.

Alternatively, others may pop along here to answer you questions. I can't as I don't typically invest in IT/UT. Good luck.

JohnnyCyclops wrote:Frankly, I'm unsure how an IT thread ended up on the high yield shares board in the first place - I couldn't see anything 'high yield' in the OP.

Lazy journalism on my part, I'll admit. Investment Strategies might be better and seems to have attracted a few disillusioned HYPP contributors of late. Although I have already been accused of posting "inflammatory" newspaper headlines over there, I'm warming to that board.

moorfield wrote:Lazy journalism on my part, I'll admit. Investment Strategies might be better and seems to have attracted a few disillusioned HYPP contributors of late. Although I have already been accused of posting "inflammatory" newspaper headlines over there, I'm warming to that board.

There's pretty much a board for everything - finance, saving, investment related.