The Lemon Fool

Thanks for the links DavidM13

Hi All.

I don't know if this is directly related to the preceding conversation, but ...

... today I went on to IBKR to top-up my SCP holding (purchased in December). I got a message that to buy (any more) SCP - or THRG or any other Investment Trust - I would need to apply for CLP Trading Permissions (i.e. a Complex or Leveraged Product). This seems crazy - Investment Trusts, notwithstanding they often use modest leverage, are more akin to a Mutual Fund than a Derivative.

I've updated my account information and applied for the next level or permissions up (it goes, in short form, Capital Preservation -> Growth -> Hedging -> Speculation): I'm currently classified as Growth and have applied for Hedging. This goes to show the absurdity - Investment Trusts have little to do with hedging As we sit here now, I am waiting for a decision.

Crazy stuff IMO.

Regards, Newroad

Newroad wrote:I've updated my account information and applied for the next level or permissions up (it goes, in short form, Capital Preservation -> Growth -> Hedging -> Speculation): I'm currently classified as Growth and have applied for Hedging. This goes to show the absurdity - Investment Trusts have little to do with hedging As we sit here now, I am waiting for a decision.

That would seem to be the Broker gold plating FCA requirements, although perhaps it's the fault of the FCA in the first place showing a lack of understanding of Investment Trusts.

It is not just IBKR. AJ Bell is doing the same:

https://moneyforums.citywire.com/yaf_po ... tment.aspx

I have not checked iWeb, but I expect they are doing the same.

Alaric wrote:

Newroad wrote:I've updated my account information and applied for the next level or permissions up (it goes, in short form, Capital Preservation -> Growth -> Hedging -> Speculation): I'm currently classified as Growth and have applied for Hedging. This goes to show the absurdity - Investment Trusts have little to do with hedging As we sit here now, I am waiting for a decision.

That would seem to be the Broker gold plating FCA requirements, although perhaps it's the fault of the FCA in the first place showing a lack of understanding of Investment Trusts.

Sounds to me it is likely more to do with the nature of the IBKR broker - which seems to be a US based 'trading' platform.

https://www.interactivebrokers.com/en/home.php

Then I see "SCP" isn't an investment trust.

XFool wrote:

Alaric wrote:That would seem to be the Broker gold plating FCA requirements, although perhaps it's the fault of the FCA in the first place showing a lack of understanding of Investment Trusts.

Sounds to me it is likely more to do with the nature of the IBKR broker - which seems to be a US based 'trading' platform.

https://www.interactivebrokers.com/en/home.php

Then I see "SCP" isn't an investment trust.

Is there confusion here due to use of initials? This 'SCP' - Schroder UK Mid Cap Fund plc - says it is an investment trust: https://www.schroders.com/en-gb/uk/indi ... -fund-plc/

The citywire.com thread about SCP and AJ Bell is 3 years old.

EthicsGradient wrote:

XFool wrote:Then I see "SCP" isn't an investment trust.

Is there confusion here due to use of initials? This 'SCP' - Schroder UK Mid Cap Fund plc - says it is an investment trust: https://www.schroders.com/en-gb/uk/indi ... -fund-plc/

The citywire.com thread about SCP and AJ Bell is 3 years old.

So it is! The word "fund" threw me...

I have just come accross this Post. Reading an article Sunday Mail March 3 page 84 Headline
Investment Trusts are battered by Bizarre EU Rules.
I buy investment Trusts. Have done so for over 25 years. Did not understand the current higher discount and yield on quality Trusts. Now I know why . This is part two of Corruption at its finest. Part one was KID That wiped out the US and Global closed funds markets. This is part 2 British Investment Trusts. The Big Fund houses do not like them, not money makers. That is why we are unlikely to get a murmur out of them. To them less IT,s more Unit Trusts. The money makers. The individuals in the Government promoting this should be identified and outed, ensure they never get employed by the UNIT Trust Industry as a reward for their corruption.

A UNIT Trust Index is usually OK A Fund run by a Fund Manager is always at risk. If a run starts they have to sell shares to pay the investor. At some point they have to stop and freeze the Fund. Thats when you really lose, as it can take years to gather funds to pay you off. Property Funds are the worst once, buyers know that its a forced sale, they cut and cut their offers.

An Investment trusts buys shares.; You pay the market rate. They do not have to sell anything to pay you. In fact if the market crashes they can borrow and buy cheap shares. Great for those who invest for income. A down market is a buying opportunity.