The Lemon Fool

Good Evening

I have a small pension being transferred into my SIPP (60K)

I am looking to max the yield with ITs and was thinking of investing in up to 10 ITs with a sustainable high yield.

I am looking for your thoughts on the which would be recommend by you guys? to help me narrow my research.

Many Thanks
Steve

ReallyVeryFoolish wrote: But...... 10 ITs with a high and sustainable yield? That's a tough call.

Depends on the definition of sustainable. ITs, when their managements want to do it, are able to maintain and increase dividends regardless of whether they are receiving enough from their invested assets. Where necessary they can sell or borrow to make up shortfalls. Provided the market is rational, it doesn't do wonders for their total return.

ReallyVeryFoolish wrote:

Snorvey wrote:Itsallaguess. Does a rather nice monthly table of higher yielding IT s from across various sectors. In fact there was an update a few days ago.

It's not too hard to find.

Indeed excellent place to start. But...... 10 ITs with a high and sustainable yield? That's a tough call.

RVF

I thought that too. But more specifically, the OP is going to need a crystal ball to be able to identify ITs with a sustainable future yield.

The trouble is, the two things do not appear to me to go hand-in-hand. High yield investments of any type are going to be inherently higher risk, and therefore less likely to turn out to be sustainable in the long term. If this were not the case, why would anybody ever invest in low yield equities? Or is this is just me being naïve?

Off the top of my head and to give you something to look at, research and take your own decision:

I hold virtually all of these, plus a couple I intend to buy shortly.

They are held as part of a specific chunk of savings used to generate income, other strategies are used for different chunks. Some are higher yielding than others, I tend to view the overall yield rather than individual elements - the overall yield is around 5.6-5.7%.

As you have specifically asked for ITs, I will leave out preference shares and high yielding individual shares and VCTs which I also use in this income part of an overall portfolio.

VSL, HONY, iHR, THRL, WHR, EPIC, SREI, SHED, DGI9, SEIT, FSFL, SEQI, JLEN, UKW, HFEL, MRCH, ASEI, UKW, CTY, BSIF, GABI, GCP, INPP, GRID, GSF, AEWU, BBGI, NCYF, MCT, NESF, SUPR, AGR, PHP, BPCR, HICL, BIPS, RECI, RAVP, RGL, BBOX.

Please do your own research and understand the iTs yourself.

rebsamsuz wrote:I am looking to max the yield with ITs and was thinking of investing in up to 10 ITs with a sustainable high yield.

I suspect you mean a sustainable high dividend on your purchase price, rather than a sustainable high yield.

The AIC maintains a list of "dividend hero" ITs, being ones that have raised their dividends for at least 20 years. There's currently 19 ITs on that list, and not all will be "high" yield (whatever your definition of that is), but it's certainly a starting point.

https://www.theaic.co.uk/aic/news/press-releases/the-investment-company-dividend-heroes

Additionally they've recently published a list of "next generation" dividend heroes, 23 ITs that have raised dividends for 10-19 years.

https://www.theaic.co.uk/aic/news/commentary/seven-investment-companies-join-the-next-generation-of-dividend-heroes

rebsamsuz wrote:...up to 10 ITs with a sustainable high yield.

For this exact purpose I hold a mixed bag.

They all have a decent yield, or did when I bought them last year.
Most have long records of no cuts.
Most have good reserves.
Some were chosen for diversity despite having shorter records and fewer reserves.
Those that have weathered the downturn without cuts may be expected to offer minimal increases while they rebuild their reserves.

ASEI
AXI
BERI
BIPS
CTY
HFEL
JCH
JETI
LWDB
MCT
MRCH
MUT
NCYF
SEQI
SHRS

My largest holdings are in ASEI, HFEL, NCYF, SHRS.
My smallest JCH, MUT, SEQI.
I suspect AXI will see a declining share price as interest rate rises loom.

I also have an HYP, and some Fixed Interest. The ITs are about 25% of our overall portfolio.

V8

88V8 wrote:

rebsamsuz wrote:...up to 10 ITs with a sustainable high yield.

For this exact purpose I hold a mixed bag.

They all have a decent yield, or did when I bought them last year.
Most have long records of no cuts.
Most have good reserves.
Some were chosen for diversity despite having shorter records and fewer reserves.
Those that have weathered the downturn without cuts may be expected to offer minimal increases while they rebuild their reserves.

ASEI
AXI
BERI
BIPS
CTY
HFEL
JCH
JETI
LWDB
MCT
MRCH
MUT
NCYF
SEQI
SHRS

My largest holdings are in ASEI, HFEL, NCYF, SHRS.
My smallest JCH, MUT, SEQI.
I suspect AXI will see a declining share price as interest rate rises loom.

I also have an HYP, and some Fixed Interest. The ITs are about 25% of our overall portfolio.

V8

Swerving off topic briefly, but a question the OP might find useful too, is there a reverse lookup facility for IT EPICs anywhere please?

I find it easy enough to find out the EPIC for an IT, but when people list the EPICs for their investments, I have found no easy way of finding out which ITs all these EPICs relate to.

Thanks!

Mike4 wrote:
Swerving off topic briefly, but a question the OP might find useful too, is there a reverse lookup facility for IT EPICs anywhere please?

I find it easy enough to find out the EPIC for an IT, but when people list the EPICs for their investments, I have found no easy way of finding out which ITs all these EPICs relate to.

The method I use which is both the most reliable and the most useful from a point of then having the secondary option of digging a little deeper into a particular IT itself once you've found it, is to use a Google search incorporating both the EPIC and the word AIC, as in the example below for Merchants (MRCH) -

https://www.google.com/search?q=mrch+aic

If you open the above URL, you'll see the search term 'MRCH AIC', and the first returned link is to the Merchants page of the AIC website, from where a number of tabs within the AIC page can then be used to look at things like Overview, Performance, Underlying portfolio holdings, Charges, etc..

If there's any odd difficulties with the above AIC-related process, then I do the same thing but replace 'AIC' with either 'Trustnet' or 'Sharecast', and I can't recall an incident where I've failed to find what I'm looking for using those processes.

Cheers,

Itsallaguess

Mike4 wrote:Swerving off topic briefly, but a question the OP might find useful too, is there a reverse lookup facility for IT EPICs anywhere please?

You can go to almost any page on the AIC site, https://www.theaic.co.uk/, and enter the EPIC* into the Company search box on the right.

*Note that "EPIC", while still used by just about everyone (inc. me), is outdated. Nowadays it's "TIDM" (Tradable Instrument Display Mnemonic).

Also, a little known feature of the AIC site is that you can get to an IT's page by entering "www.theaic.co.uk/<TIDM>" into your browser.
E.g. https://www.theaic.co.uk/CTY

If I know the ticker, but not the name of the share, I usually go to the HL website, link, here:
https://www.hl.co.uk/shares/share-research

... then key in the ticker, about a quarter of the way down the page, and lo and behold, up pops the name of the share and a "click-on" link to the fact sheet. That works for IT's or shares. If it's an ETF or something more obscure, then use the small search box, top right of the first link.

richfool wrote:If I know the ticker, but not the name of the share, I usually go to the HL website, link, here:
https://www.hl.co.uk/shares/share-research

... then key in the ticker, about a quarter of the way down the page, and lo and behold, up pops the name of the share and a "click-on" link to the fact sheet. That works for IT's or shares. If it's an ETF or something more obscure, then use the small search box, top right of the first link.

Another thing I've found works well if you want to go to the HL website to view a particular company is to type:
Company Name or ticker and 'hl' into Google, such as myi hl or lowland hl and the first returned link will almost invariably provide a link to the company on the HL site.

RC

One problem is that you will probably find the high yield ITs have holdings in many of the same companies, so having 10 ITs will not give you the spread of risk you may think you have.

Murray International is probably a good one to have as it is primarily non UK and has a good long term record.

Henderson Far East Income yields about 7.1%. Just don't expect capital growth as well as a high income.

Like Murray International it provides excellent diversification, as it doesn't invest in the same things as the alphabet soup of EPIC codes in this thread (most of which are probably UK Equity Income ITs). These tend to fish in a very similar pool of large cap. high yielders in the FTSE100.

I would go for a mixture of UK dividend heroes (Eg CTY, ASEI), overseas IT's (Eg HFEL, MYI), and some more specialist IT's (Commodities, Renewable infrastructure, healthcare, property). This would provide good diversification.

I am sure you can find high-ish yielding IT's in these categories that have a good track record of maintaining dividends.

My own IT portfolio consists of:

UK IT's:
CTY (City of London)
DIG (Dunedin Income & Growth)
BCI (BMO Capital and Income)
ASEI (Aberdeen Standard Equity Income)

Overseas IT's
MYI (Murray International)
HFEL (Henderson Far East)
SAIN (Scottish American)

Specialist IT's
UKW (Greencoat UK Wind)
BRWM (Blackrock World Mining)
GCP (GCP Infrastructure)
NESF (NextEnergy Solar Fund)

Good hunting!

FD

Mike4 wrote:Swerving off topic briefly, but a question the OP might find useful too, is there a reverse lookup facility for IT EPICs anywhere please?

Not o/t at all, as it's relevant to many topics.
I use LSE https://www.lse.co.uk/ where the lookup is very quick.

Oddly enough, one aspect of the AIC site that irritates, is that the Dividend Heroes page does not include the EPICS...

V8

88V8 wrote:

Mike4 wrote:Swerving off topic briefly, but a question the OP might find useful too, is there a reverse lookup facility for IT EPICs anywhere please?

Not o/t at all, as it's relevant to many topics.
I use LSE https://www.lse.co.uk/ where the lookup is very quick.

Oddly enough, one aspect of the AIC site that irritates, is that the Dividend Heroes page does not include the EPICS...

V8

As others have said HL is handy https://www.hl.co.uk/shares/share-research, the handy HYPTUSS offers https://www.sharecast.com/ - not my fav info site.
Using google.co.uk I find typing LON:EPIC can point you in the right direction. Google ha finance too https://www.google.com/finance/

Take a look at this 8 Investment Trust dividend portfolio - this provided dividend growth even after the 2008 crisis https://www.retirementace.co.uk/2020/04 ... lio-8.html

AshleyW wrote:Take a look at this 8 Investment Trust dividend portfolio - this provided dividend growth even after the 2008 crisis https://www.retirementace.co.uk/2020/04 ... lio-8.html

Interesting and useful link, thank for posting.


Arb.

thebarns wrote:Off the top of my head and to give you something to look at, research and take your own decision:

I hold virtually all of these, plus a couple I intend to buy shortly.

They are held as part of a specific chunk of savings used to generate income, other strategies are used for different chunks. Some are higher yielding than others, I tend to view the overall yield rather than individual elements - the overall yield is around 5.6-5.7%.

As you have specifically asked for ITs, I will leave out preference shares and high yielding individual shares and VCTs which I also use in this income part of an overall portfolio.

VSL, HONY, iHR, THRL, WHR, EPIC, SREI, SHED, DGI9, SEIT, FSFL, SEQI, JLEN, UKW, HFEL, MRCH, ASEI, UKW, CTY, BSIF, GABI, GCP, INPP, GRID, GSF, AEWU, BBGI, NCYF, MCT, NESF, SUPR, AGR, PHP, BPCR, HICL, BIPS, RECI, RAVP, RGL, BBOX.

Please do your own research and understand the iTs yourself.

Surely this is spreading your jam too thin? You must have thousands of individual holdings here so are bound to be introducing diworsification by the back door. A tracker would do the job much more cheaply. Personally I’d cull that list to 3 or 4 tops from each sector with a max of 10-15.

By holding 40 ITs you are basically backing every horse in the race.

I hold 21 ITs. They include some of the usual higher yielding suspects such as Murray Int, Shires, Aberdeen Standard Equity Income, Merchants, Henderson Far East, European Assets, Blackrock Energy and Resources and Blackrock World Mining. I also include some high yielders which are less correlated with high yielding equities such as Princess Private Equity, Triple Point Social Housing, Gore Street Energy, Regional REIT and Invesco Bond Income. The others are more growth orientated and fish in a different equity pool to the high yield ITs. Although 21 is a highish number of ITs to hold I do not perceive a problem with duplication.Elsewhere my Fixed Interest and individual shares also do not overlap significantly with my ITs. I think it is possible to have a largish number of holdings without becoming a closet tracker.