How best to wind out HYP?

[moorfield]

I do not feel particularly inclined to separate out HYP shares and ITs into separate pots as my main focus is simply the overall income and yield that all investments produce collectively. I lump everything together into one portfolio which is settling into a mixture of high yield blue chips (FTSE100), preference shares, and non-UK Equity ITs (HFEL being the first I have added recently).

[Arborbridge]

What you're saying is that instead of holding individual shares, you want to move to a scenario where you're holding what will probably be substantially the same shares, but held inside ITs at higher cost.

What exactly are the maintenance issues that you're trying to avoid???

MDW1954

There's an implicit assumption here that those extra costs are not worth paying, and that investing in similar shares brings about similar results: but that may not be true.

In practice, I have found it very difficult to produce better performance than professional managers in the same area of investment. It is also noticeable that managers fishing in the same pond do not produce similar results.

I would also say that my IT basket requires less admin than my HYP.

Arb.

[Dod101]

I have 40 ITs in my ISA, perhaps some would consider it overkill but i get a nice spread of dividends every month should i decide to withdraw them automatically on retirement as a tax free income. I buy 2 new ITs every year.

However, going forwards I will put all my ISA subs and dividends into something like VHYL because I am running out of sensible dividend paying ITs to invest in.

An interesting idea putting your future investments into VHYL which doesn't yield much, when you have so many which yield more. So the obvious question is why not buy more of the ones you already have?

I do rather agree with Dod - 40 seems quite a high number. Nothing wrong with that, though it depends if you do much record keeping. If you just in effect ignore them and get on with life, then 40 is no problem.

I cut down on numbers over the past few years: I would prefer book substantial dollops of dividends coming in, rather than mess about with many more small amounts.


Arb.

I have an Excel spreadsheet full of all my ISA and SIPP transactions (all cash flows) going back to about 2003/2004.

It also shows assumed future dividends that I marked as received when they are paid.

Clearly you are dedicated but to what end? As a hobby I can just about understand it although I could think of lots of other things I would rather do.

I suspect that you would be better off with a couple of trackers as you have more or less built your own tracker anyway and that must be costing you in terms of fees and your own time.

Dod

[Myfyr]

I have 40 ITs in my ISA, perhaps some would consider it overkill but i get a nice spread of dividends every month should i decide to withdraw them automatically on retirement as a tax free income. I buy 2 new ITs every year.

However, going forwards I will put all my ISA subs and dividends into something like VHYL because I am running out of sensible dividend paying ITs to invest in.

An interesting idea putting your future investments into VHYL which doesn't yield much, when you have so many which yield more. So the obvious question is why not buy more of the ones you already have?

I do rather agree with Dod - 40 seems quite a high number. Nothing wrong with that, though it depends if you do much record keeping. If you just in effect ignore them and get on with life, then 40 is no problem.

I cut down on numbers over the past few years: I would prefer book substantial dollops of dividends coming in, rather than mess about with many more small amounts.


Arb.

I have an Excel spreadsheet full of all my ISA and SIPP transactions (all cash flows) going back to about 2003/2004.

It also shows assumed future dividends that I marked as received when they are paid.

Clearly you are dedicated but to what end? As a hobby I can just about understand it although I could think of lots of other things I would rather do.

I suspect that you would be better off with a couple of trackers as you have more or less built your own tracker anyway and that must be costing you in terms of fees and your own time.

Dod

You are probably right, but what’s done is done. It’s probably at the stamp collecting stage now.

I could simplify by selling half and doubling up on the other half. But then which ones and then also stamp duty and dealing costs etc etc etc. Best leave alone and only sell holdings if I need the cash (cars, home improvements etc).

However the dividend yield on current value is about 3.5% and the intention is to auto withdraw these as tax free income at some point once I do retire (no later than summer next year, maybe this year, however I have been saying this for three years )

[absolutezero]

You are probably right, but what’s done is done. It’s probably at the stamp collecting stage now.

I could simplify by selling half and doubling up on the other half. But then which ones and then also stamp duty and dealing costs etc etc etc. Best leave alone and only sell holdings if I need the cash (cars, home improvements etc).

However the dividend yield on current value is about 3.5% and the intention is to auto withdraw these as tax free income at some point once I do retire (no later than summer next year, maybe this year, however I have been saying this for three years )

If your portfolio is yielding 3.5% then Vanguards cheap FTSE 100 tracker (VUKE) yields 3.86%.
More dividend income and you hold every FTSE 100 share.

[Myfyr]

You are probably right, but what’s done is done. It’s probably at the stamp collecting stage now.

I could simplify by selling half and doubling up on the other half. But then which ones and then also stamp duty and dealing costs etc etc etc. Best leave alone and only sell holdings if I need the cash (cars, home improvements etc).

However the dividend yield on current value is about 3.5% and the intention is to auto withdraw these as tax free income at some point once I do retire (no later than summer next year, maybe this year, however I have been saying this for three years )

If your portfolio is yielding 3.5% then Vanguards cheap FTSE 100 tracker (VUKE) yields 3.86%.
More dividend income and you hold every FTSE 100 share.

No thanks. That is too concentrated for me - by company and geography. I would consider VHYL at about 3.25% yield but I don’t really want everything with one investment house. As an addition to my portfolio yes, to replace my portfolio no.

[Dod101]

You are probably right, but what’s done is done. It’s probably at the stamp collecting stage now.

I could simplify by selling half and doubling up on the other half. But then which ones and then also stamp duty and dealing costs etc etc etc. Best leave alone and only sell holdings if I need the cash (cars, home improvements etc).

However the dividend yield on current value is about 3.5% and the intention is to auto withdraw these as tax free income at some point once I do retire (no later than summer next year, maybe this year, however I have been saying this for three years )

If your portfolio is yielding 3.5% then Vanguards cheap FTSE 100 tracker (VUKE) yields 3.86%.
More dividend income and you hold every FTSE 100 share.

Which he probably just about does anyway!

Anyway that is just my opinion and clearly we all make our own decisions.

Dod

[Dod101]

You are probably right, but what’s done is done. It’s probably at the stamp collecting stage now.

I could simplify by selling half and doubling up on the other half. But then which ones and then also stamp duty and dealing costs etc etc etc. Best leave alone and only sell holdings if I need the cash (cars, home improvements etc).

However the dividend yield on current value is about 3.5% and the intention is to auto withdraw these as tax free income at some point once I do retire (no later than summer next year, maybe this year, however I have been saying this for three years )

If your portfolio is yielding 3.5% then Vanguards cheap FTSE 100 tracker (VUKE) yields 3.86%.
More dividend income and you hold every FTSE 100 share.

No thanks. That is too concentrated for me - by company and geography. I would consider VHYL at about 3.25% yield but I don’t really want everything with one investment house. As an addition to my portfolio yes, to replace my portfolio no.

I would certainly agree with you there, but IF you wanted to reduce the number of holdings you could for instance take Edinburgh, Temple Bar and City of London and consolidate them. I guess you could do the same with the Far East ITs and no doubt others, but of course it is your portfolio.

Dod

[Arborbridge]

You are probably right, but what’s done is done. It’s probably at the stamp collecting stage now.

I could simplify by selling half and doubling up on the other half. But then which ones and then also stamp duty and dealing costs etc etc etc. Best leave alone and only sell holdings if I need the cash (cars, home improvements etc).

However the dividend yield on current value is about 3.5% and the intention is to auto withdraw these as tax free income at some point once I do retire (no later than summer next year, maybe this year, however I have been saying this for three years )

If your portfolio is yielding 3.5% then Vanguards cheap FTSE 100 tracker (VUKE) yields 3.86%.
More dividend income and you hold every FTSE 100 share.

No thanks. That is too concentrated for me - by company and geography. I would consider VHYL at about 3.25% yield but I don’t really want everything with one investment house. As an addition to my portfolio yes, to replace my portfolio no.

If your portfolio only yields 3.5% then you might well be better off with VHYL plus a couple of satellites. THe VHYL capital growth would make it favourite over the VUKE despite higher yield. I concur with your sentiments about one investment house, but there are other similar instruments to VHYL you could buy.
In my view you could reduce the number of holdings, but still achieve what you need.

Arb.

[Myfyr]

You are probably right, but what’s done is done. It’s probably at the stamp collecting stage now.

I could simplify by selling half and doubling up on the other half. But then which ones and then also stamp duty and dealing costs etc etc etc. Best leave alone and only sell holdings if I need the cash (cars, home improvements etc).

However the dividend yield on current value is about 3.5% and the intention is to auto withdraw these as tax free income at some point once I do retire (no later than summer next year, maybe this year, however I have been saying this for three years )

If your portfolio is yielding 3.5% then Vanguards cheap FTSE 100 tracker (VUKE) yields 3.86%.
More dividend income and you hold every FTSE 100 share.

No thanks. That is too concentrated for me - by company and geography. I would consider VHYL at about 3.25% yield but I don’t really want everything with one investment house. As an addition to my portfolio yes, to replace my portfolio no.

If your portfolio only yields 3.5% then you might well be better off with VHYL plus a couple of satellites. THe VHYL capital growth would make it favourite over the VUKE despite higher yield. I concur with your sentiments about one investment house, but there are other similar instruments to VHYL you could buy.
In my view you could reduce the number of holdings, but still achieve what you need.

Arb.

This is my main crystallised SIPP, equal weightings in 12 ETFs, worth more than the ISA. May show I am not fully into dividends as this is intended to be a total return approach portfolio.

Some of these will be sold as necessary to wind the SIPP down over a 35 year period.

Company Name Ticker
Vanguard ESG Global All Cap ETF USD Inc GBP V3AM
SPDR S&P Global Div Aristocrats ETF GBP GBDV
L&G Quality Eq Div ESG Exclsns UK ETF LDUK
SPDR S&P UK Dividend Aristocrats ETF UKDV
Vanguard FTSE AllWld HiDivYld ETF $Dis GBP VHYL
iShares Core MSCI World ETF GBP H Dist (IWDG) IWDG
SPDR S&P Euro Dividend Aristocrats ETF GBP EUDV
iShares MSCI World ETF USD Dist GBP IWRD
Lyxor MSCI World ETF Dist A/I GBP WLDL
HSBC MSCI World ETF GBP HMWO
Vanguard FTSE Dev World ETF $Dis GBP VEVE
Vanguard FTSE All-World UCITS ETF GBP VWRL

[88V8]

If your portfolio only yields 3.5% then you might well be better off with VHYL plus a couple of satellites.

Arb, you're getting very bold.

There's not a lot of choice; One would have to be Seraphim SSIT, but that was only launched 7 months ago.
As to the other, are you becoming a Muskovite?

V8

[Arborbridge]

If your portfolio only yields 3.5% then you might well be better off with VHYL plus a couple of satellites.

Arb, you're getting very bold.

There's not a lot of choice; One would have to be Seraphim SSIT, but that was only launched 7 months ago.
As to the other, are you becoming a Muskovite?

V8

I haven't checked, but there are presumably simiilar investments to VHYL in other "stables". As for satellites, he can pick various others to supplement to his heart's content. or to spice it up a bit.

Arb.

[Charlottesquare]

I have 40 ITs in my ISA, perhaps some would consider it overkill but i get a nice spread of dividends every month should i decide to withdraw them automatically on retirement as a tax free income. I buy 2 new ITs every year.

However, going forwards I will put all my ISA subs and dividends into something like VHYL because I am running out of sensible dividend paying ITs to invest in.

An interesting idea putting your future investments into VHYL which doesn't yield much, when you have so many which yield more. So the obvious question is why not buy more of the ones you already have?

I do rather agree with Dod - 40 seems quite a high number. Nothing wrong with that, though it depends if you do much record keeping. If you just in effect ignore them and get on with life, then 40 is no problem.

I cut down on numbers over the past few years: I would prefer book substantial dollops of dividends coming in, rather than mess about with many more small amounts.


Arb.

There is a slight logic for a higher number of ITs than might be expected, if one moves from just UK equities in a HYP to ITs that mainly cover UK equities then a limited number is likely possible, but if you want to cover other overseas markets/sectors then the number can grow quite a lot, especially if you do not just want to rely on one IT per market/sector:

I have 26 holdings, two individual companies (Berkshire and Shell) and 24 ITs and Reits covering a fair swathe of the globe and the odd niche sector like fulfillment warehousing/music royalties/mining. They probably cannot qualify as any form of High Yield play (some have no dividends at all) but they do currently in total knock out an overall 3.06% dividend yield (will be slightly higher today)

Abrdn Asian Income Fund Limited Ordinary NPV Shares
Abrdn China Investment Company Limited ORD GBP0.01
Abrdn European Logistics Income Plc Ord 1p
Abrdn UK Smaller Companies Trust Plc Ordinary 25p Shares
Berkshire Hathaway Inc Class B USD0.0033 *1 *R
Blackrock Sustainable American Income Trust plc Ordinary 1p Shares *2
BlackRock World Mining Trust plc Ordinary 5p
Canadian General Investments Ltd Nil Par Value (CDI)
Edinburgh Investment Trust plc Ordinary 25p Shares
European Assets Trust plc GBP0.10
Fidelity China Special Situations PLC Ordinary Shares 1p
Henderson Far East Income Ltd Ordinary NPV
Hipgnosis Songs fund Ltd Ord NPV
JPMorgan Emerging Markets Investment Trust plc ORD GBP0.025
JPMorgan Global Growth & Income plc Ordinary 5p
JPMorgan Indian Investment Trust plc Ordinary 25p
Middlefield Canadian Inc - GBP PC Part Pref Shs Npv *1
Murray International Trust plc Ordinary 25p Shares
North American Income Trust plc ORD GBP0.05
Polar Capital Technology Trust plc Ordinary 25p
Schroder Oriental Income Fund Ordinary 1p
Scottish Mortgage Investment Trust plc Ordinary Shares 5p
Shell plc Ordinary EUR0.07
Urban Logistics REIT plc Ordinary 1p
VinaCapital Vietnam Opportunity Fund Ltd USD0.01
Warehouse REIT plc ORD GBP0.01