My IT (Income & Growth) Portfolio - July Update

[richfool]

In posting the update, I was also rather hoping it might draw out a few comments from more experienced investors about the two new bond IT's that I added, i.e. - NCYF (New City High Yield Fund) and - SMIF (Twenty Four Select Monthly Income Fund).

I’ve held NCYF on and off over the last few years. I would never consider it a long term buy and hold due to the slow erosion / return of capital via the high dividend. What it does do is trade in a reasonable tight range and if you can time the troughs with a holding period of 3-6 months to wait for recovery and a couple of dividends then it’s usually worth 10% a trade.

Yes, I am not without some concern as to what will happen to the SP's of the above, when the next 2 interest rate increases are announced. I am hoping that they are mostly already built in to the SP's, or this week's (increase) at least. I was thinking that a yield of 9% should give some margin.

My portfolio is still a long way short of 60/40 or even 80/20! The 2 bond holdings account for 2.6% of my portfolio, with MYI's FI holdings accounting for a tiny bit more.

[richfool]

Ok I've re-written the updated portfolio, along with the percentages (as at 31st October) that each holding represents of the overall portfolio, to make it a bit more digestible:

UK Grth & Inc trusts:
DUNEDIN INCOME 4.4%
LAW DEBENTURE 2.9%
MERCHANTS TRUST 2.6%

Global G&I trusts:
JPMORGAN GBL G&I 10.7%
MURRAY INTL TRUST 4.7%
SCOT AMERICAN INV 3.2%
SECURITIES of SCOTLAND (STS) 3.0%

Global Growth trusts:
BRUNNER 3.7%
F&C IT (FCIT) 2.2%

Global Multi-Asset/Defensive/Hedge Funds:
PERSONAL ASSETS 1.8%
RUFFER INVEST 3.0%
BH MACRO (BHMG) 1.1%

Asian Pacific trusts:
ABERDEEN ASIAN INC 4.6%

North American trusts:
BLACKROCK SUSTAINABLE 2.9%
MIDDLEFIELD CAN INC PRF 9.3%

European Trusts:
EUROPEAN ASSETS 2.0%
JPMORGAN EURO G&I 5.5%

Commercial Property/REIT's:
ABDN PROP INC 2.1%
EDISTON PPTY INV 2.5%
PRIMARY HLTH PROP 1.6%
WAREHOUSE REIT 1.6%

Utilities and Infrastructure:
ECOFIN GBL UTILS & Infra 3.0%
HICL INFRASTRUCTURE 1.3%

Renewables:
BLUEFIELD SOLAR INC 1.3%
DOWNING RENEWABLES 1.5%
GORE STREET ENERGY 2.2%
GRESHAM HOUSE ENGY 2.7%
JLEN ENVIRONMENTAL 1.9%
NEXTENERGY SOLAR 2.3%

Corporate Bonds/Fixed Int:
CQS NEW CITY HIGH YIELD (NCYF) 1.2%
TWENTYFOUR SELECT MI (SMIF) 1.4%

Gold/Resources/Energy:
BLACKROCK ENGY & RES (BERI) 3.7%
CITY NATURAL RESOURCES G&I (CYN) 1.4%
WOODSIDE ENERGY (WDS) 0.7%

[Dod101]

At today's prices, what sort of overall yield are you getting from that significant number and spread of investments?

Dod

[richfool]

At today's prices, what sort of overall yield are you getting from that significant number and spread of investments?

Dod

I couldn't tell you that at today's prices. Ask me again on 31st March next and I'll give you an accurate/actual figure.

[Dumbo]

Wow what a Portfolio, overall I'm v.impressed.

As for NCYF (New City High Yield Fund) and - SMIF (Twenty Four Select Monthly Income Fund). Not particularly impressed with either of these. Personally I would not want to buy trusts at a premium and the ongoing costs for these two are quite high as well. I use OEIC's for my fixed interest which can be purchased at NAV and ongoing costs considerably cheaper.

Otherwise love the Portfolio.

Eddie

[yieldhog]

Re: NCYF and SMIF

I currently own NCYF and have held it in my SIPP for several years. I'm quite happy with the the fund as it suits my objectives and I plan to maintain the position going forward. Clearly, when interest rates rise their will be some decline in the price of the fund assets but also an opportunity to replace maturing bonds with higher yielding assets. Because this type of fund tends to have a relatively short average duration profile then we can expect the fund to show an increasing yield on NAV as long as rates continue rising. The main risks that I see are 1) the default risk of some of the bonds in the portfolio 2) funding problems for the fund leverage and 3) liquidity risks in the event of another general market meltdown.

I held SMIF in my Eqi SIPP when it as transferred to ii at the time ii took over Eqi accounts. When I tried to buy more SMIF under ii I was told I could not because the fund could not be sold to retail investors. However, ii said I could continue to hold them but not buy any more. At the time, I wrote on TMF:

"I discovered by chance today that an IT that I hold in my portfolio (SMIF) is not on the ii list of acceptable investments. It seems ii will allow me to sell it but not buy it. Apparently, the reason I cannot buy it is because the KID document for this fund states: "The Fund may be appropriate for professional investors or professionally advised retail investors.......". Similar ITs (NCYF, BIPS etc) have differently worded KIDS and can be traded with ii. I suppose it's at the discretion of ii what they allow and what they don't but to me it makes little sense to differentiate in this way beween funds that have similar structures and risk profiles."

Has anyone with and ii account had a similar problem with SMIF?

Y

[88V8]

Has anyone with an ii account had a similar problem with SMIF?

I bought some in the last two weeks via ii, and so did OH.

They can be a paperwork pain sometimes, they blocked AXI for quite a while and then allowed its purchase again.

Away from ITs, they still block NATW because they say there is no KID, but I could buy it on HL.
And if one tries to buy NWBD the system pretends not to recognise it, but if one ploughs on, it is possible to make the purchase.

On the whole though I have been able to buy what I want through ii, but there is more than hitherto that they no longer trade online.

V8

[yieldhog]

Thanks for that V8. I might have another go at buying SMIF through ii when the time comes. I like this fund because as far as I know it doesn't use leverage to enhance yield but on the other hand the dividend cover seems to vary widely from one year to the next compared with similar funds e.g. BIPS. But at least SMIF pays a dividend appropriate to a fund of this type, unlike BIPS which, in my opinion, doesn't come close to offering a yield that compensates for the risk involved.

Y

[richfool]

I had no issues buying SMIF and NCYF through Jarvis X-O., in an ISA, though Jarvis did have problems with KID's on their computer system a few weeks back, which prevented trades on IT's generally. However that is resolved now.

In addition to SMIF (Twenty Four Select Monthly Income), there is a Twenty Four Income Fund (TFIF) which pays dividends quarterly, and invests in the UK and Europe. It has a slightly lower yield (c 7.11%) than SMIF., and is trading at a very slight premium of 0.84%. Though it is SMIF that I have seen most often mentioned in articles.

[richfool]

Did you hang on for the ex div on MWY? I see they have a special as well as regular one about to pay.

I’ve been a holder for two years. Not been a great performer and I’ve been considering ditching in favour of more FCIT or a global tracker or S&P500 tracker.

Yes, I did, the final and the special dividend.

I/we hung on to MWY in my wife's longer term more growth focused portfolio. I got frustrated by the weak SP and the negligible dividend yield in my more income focused portfolio..

[HillManMill]

Ok I've re-written the updated portfolio, along with the percentages (as at 31st October) that each holding represents of the overall portfolio, to make it a bit more digestible:

UK Grth & Inc trusts:
DUNEDIN INCOME 4.4%
......
Gold/Resources/Energy:
BLACKROCK ENGY & RES (BERI) 3.7%
CITY NATURAL RESOURCES G&I (CYN) 1.4%
WOODSIDE ENERGY (WDS) 0.7%

I was interested to read about your portfolio Richfool. Looking at you updated breakdown I make the total 90% is there another 10% lurking elsewhere?

[richfool]

Ok I've re-written the updated portfolio, along with the percentages (as at 31st October) that each holding represents of the overall portfolio, to make it a bit more digestible:

UK Grth & Inc trusts:
DUNEDIN INCOME 4.4%
......
Gold/Resources/Energy:
BLACKROCK ENGY & RES (BERI) 3.7%
CITY NATURAL RESOURCES G&I (CYN) 1.4%
WOODSIDE ENERGY (WDS) 0.7%

I was interested to read about your portfolio Richfool. Looking at you updated breakdown I make the total 90% is there another 10% lurking elsewhere?

They* add up to 100% on my Xcel spreadsheet and just checking them on my small calculator I got 100% there also.

*(As listed on post #543104)

[dundas666]

Hi richfool, why did you ditch HINT (Henderson International) from your portfolio?
(I hold HINT and MYI (Murray Int'l) btw)
Thanks, d6

[richfool]

Hi richfool, why did you ditch HINT (Henderson International) from your portfolio?
(I hold HINT and MYI (Murray Int'l) btw)
Thanks, d6

Hi Dundas,

I sold HINT for two reasons really. Partly to help reduce the number of holdings I had, but mainly because of it's relatively poorer capital performance compared to its peers. Whilst I like its holdings, they didn't seem to be performing that well.

I already held: JGGI, SAIN and MYI in that sector.

https://www.hl.co.uk/shares/shares-sear ... rd-gbp0.01

https://citywire.co.uk/funds_insider/in ... ePeriod=12

[richfool]

Has anyone with an ii account had a similar problem with SMIF?

I bought some in the last two weeks via ii, and so did OH.

They can be a paperwork pain sometimes, they blocked AXI for quite a while and then allowed its purchase again.

Away from ITs, they still block NATW because they say there is no KID, but I could buy it on HL.
And if one tries to buy NWBD the system pretends not to recognise it, but if one ploughs on, it is possible to make the purchase.

On the whole though I have been able to buy what I want through ii, but there is more than hitherto that they no longer trade online.

V8

I thought those following this theme might be interested in this article. (It looks like we got the timing about right):
"Artemis’ Snowden: The bond market has passed ‘peak fear’
24 November 2022

The manager of the Artemis Corporate Bond fund recommends locking in corporate bond yields of 6% to beat inflation over the medium to long term.
By Anthony Luzio,
Editor, Trustnet Magazine

The bond market in the UK has already bottomed out, with all the interest rate hikes in this tightening cycle more than priced in already, according to Stephen Snowden, manager of the Artemis Corporate Bond fund.

In a recent Trustnet article, Bruce Stout of the Murray International said equity markets had yet to reach “peak fear”, as we hadn’t seen any forced selling.

However, Snowden claimed it is a different story in the UK fixed income market, where the FTSE Actuaries UK Conventional Gilts All Stocks index is already up 14.3% since the height of the panic over former chancellor Kwasi Kwarteng’s disastrous mini-Budget."

https://www.trustnet.com/news/13345183/ ... -peak-fear

[toofast2live]

The manager of the Artemis Corporate Bond fund recommends locking in corporate bond yields of 6% to beat inflation over the medium to long term.

The cynic might say “he would say that”. But not if he said dump bonds in January. Can’t find that quote though....

[88V8]

The manager of the Artemis Corporate Bond fund recommends locking in corporate bond yields of 6% to beat inflation over the medium to long term.
By Anthony Luzio, Editor, Trustnet Magazine
The bond market in the UK has already bottomed out, with all the interest rate hikes in this tightening cycle more than priced in already, according to Stephen Snowden, manager of the Artemis Corporate Bond fund.

Barring unforeseens, I agree,
Prices are on the up.
I am now pretty well fully invested, with a lot more FI than is really sensible given current inflation, but a pretty well guaranteed rise in prices.

A small caveat... I'm always bothered by the notion that one can 'lock in' a yield. Yield-at-time-of-purchase is a meaningless comfort blanket which may provide a nice reminder of a good entry point, but the yield at any time is the yield.

V8

[richfool]

This is an update on my Investment Trust portfolio as at 5th April 2023. Note it includes income and growth trusts with the main focus on income (88% of the total value, (growth 12% of the total value).

The percentages quoted are the percentages of the total portfolio (not the current yields).

UK GROWTH & INCOME TRUSTS - % of p'folio
DUNEDIN INCOME GROWTH 4.8%
LAW DEBENTURE CORP 4.5%
MERCHANTS TRUST 3.2%

GLOBAL G&I IT's
HENDERSON INTL INC 3.3%
JPMORGAN GBL GTH & INC 11.4%
MURRAY INTL TRUST 6.2%
SCOT AMERICAN INV 4.3%

GLOBAL GROWTH TRUSTS
BRUNNER INV TR 5.4%
F&C INVESTMENT TST 3.4%

GLOBAL MULTI-ASSET IT's
RUFFER INVEST TST 2.9%

ASIAN PACIFIC INV TRUSTS
ABERDEEN ASIAN INC 5.3%

NORTH AMERICAN IT's
BRSA - BLACKROCK SUSTAINAN 3.1%
MIDDLEFIELD CAN INC 8.0%

EUROPEAN INV TRUSTS
EUROPEAN ASSETS TR 2.6%
JPMORGAN EURO G&I 6.1%

COMMERCIAL PROPERTY/REIT IT's
ABDN PROP INC 2.0%
EDISTON PPTY INV 2.4%
PRIMARY HLTH PROP 1.9%
WAREHOUSE REIT 1.9%

UTILITIES & INFRASTRUCTURE
ECOFIN GBL UTILITIES & Infra 3.0%

CORPORATE BONDS
CQS NEW CITY HIGH INC 1.4%

ENVIRONMENT/RENEWABLES
BLUEFIELD SOLAR INC 1.3%
GRESHAM HOUSE ENGY 2.2%
JLEN ENVIRONMENTAL 2.2%
NEXTENERGY SOLAR 2.2%

RESOURCES/ENERGY/COMMODS/GOLD
BLACKROCK ENGY & RES 3.0%
BLACKROCK WORLD MINING 1.3%
CQS NATURAL RESOURCES 0.8%

During the year, I have moved slightly more back towards income and have sought to reduce the number of holdings. I plan to (try and) leave the portfolio untouched over the coming year.

Over the year the total value of the portfolio increased by: 9.56%
The dividend income received in the year increased by 9.96% over the previous year.
The yield, based on the current value of the portfolio was 4.34% (noting that the portfolio includes some growth trusts).

[richfool]

Some additional notes re the above portfolio. I went back into HINT because of its value focus and global income exposure. I increased my holding of MYI for similar reasons and its diversified holdings which include some fixed interest, Emerging and Latin American market exposure and Bruce Stout's more defensive posture. I disposed of STS.

Re my bond holdings, I was a bit unnerved by the recent banking crisis/scare and possible implications re the financial holdings within those bond funds, so sold SMIF and kept just NCYF.

I shed GSF because there wasn't much growth taking place, versus GRID, and kept GRID as my sole battery IT. (Other trusts within that sector do have some battery exposure). I also shed DORE as its yield was lower, there wasn't much growth taking place and I felt I had too high an exposure to renewables.

In the growth/defensive area, I have added to BUT and FCIT, and shed PNL and BHMG (and kept RICA).

Oh, and I added a small piece of BRWM, which I don't expect to do much for a while yet, but it has a good dividend.

I had been thinking of buying back into JAGI for its Asia Pacific, technology and China exposure, but have shied away from doing so for the time being.

[scotia]

This is an update on my Investment Trust portfolio as at 5th April 2023. Note it includes income and growth trusts with the main focus on income (88% of the total value, (growth 12% of the total value).


Over the year the total value of the portfolio increased by: 9.56%

Looking over this portfolio, I am somewhat surprised by the increase. However I noticed that you didn't use the word "gain". Did you inject new money to your portfolio during the year? Otherwise I'm puzzled at the increase.
Your large traditional UK and Global ITs did reasonably well - with total returns in the 1 to 7% range - with MYI an outlier at 11.3%. But your property ITs tanked - from around -11% to -35%. And yes there were some other wins, but also losses. I just couldn't work out where an overall gain of 9.5% could come from.
PS thanks for the list. I'm much more heavily loaded with US and world Index ETFs - and they are all in negative territory by around 1% to 5% over the past year.