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Personal Assets v Capital Gearing v RICA?

Closed-end funds and OEICs
mc2fool
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Re: Personal Assets v Capital Gearing v RICA?

#418334

Postby mc2fool » June 9th, 2021, 11:29 am

richfool wrote:Personal Assets Results:
Over the year to 30 April 2021 PAT's net asset value per share ("NAV") rose by 9.1%. This compares to a rise of 22.1% in the FTSE All-Share Index.


Yeah, but ...

Image
https://uk.advfn.com/stock-market/london/personal-assets-PNL/share-price

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Re: Personal Assets v Capital Gearing v RICA?

#418361

Postby scotia » June 9th, 2021, 12:21 pm

According to HL, the top ten investments of Personal Assets are

Gold Bullion 9.70%
United States Treasury Notes 8% 5.65%
Microsoft Corp 5.32%
United States Treasury Notes 2% 5.27%
United States Treasury Bonds 8% 5.22%
Alphabet Inc A 5.03%
United States Treasury Bonds 8% 4.78%
United States Treasury Notes 8% 4.73%
Unilever plc Ordinary 3.11p 4.22%
United States Treasury Notes 8% 3.96%

and its top 5 countries are

United States 66.58%
United Kingdom 8.72%
Switzerland 3.85%
Canada 2.61%
France 0.54%

And yet it uses the FTSE all shares as its benchmark.
Perhaps a world tracker would be a more appropriate performance comparator ?

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Re: Personal Assets v Capital Gearing v RICA?

#418394

Postby mc2fool » June 9th, 2021, 1:50 pm

scotia wrote:And yet it uses the FTSE all shares as its benchmark.
Perhaps a world tracker would be a more appropriate performance comparator ?

Given that according to their latest quarterly report cum factsheet they have just 43% in equities (Intl 35% + UK 8%) and 57% in Fixed Income + Gold Related + UK T-Bills + Cash, I don't think that either is appropriate. Not sure what would be though ...

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Re: Personal Assets v Capital Gearing v RICA?

#421443

Postby 1nvest » June 22nd, 2021, 6:51 pm

mc2fool wrote:
scotia wrote:And yet it uses the FTSE all shares as its benchmark.
Perhaps a world tracker would be a more appropriate performance comparator ?

Given that according to their latest quarterly report cum factsheet they have just 43% in equities (Intl 35% + UK 8%) and 57% in Fixed Income + Gold Related + UK T-Bills + Cash, I don't think that either is appropriate. Not sure what would be though ...

Flexibile investment trusts have great optionality and as such I guess the best benchmark is the average of all similar funds. Consider a DIY version of a third each US stock, Gold, 10 year Gilt Ladder, $, £, global currencies (gold), stock, bond, commodity assets. Extend that to be able to diversify/rotate into other stocks, maybe global, UK, whatever, and the same for gold or silver or cash, and the same for bonds, index linked, short, long dated, domestic/foreign ...etc. Add in the option to vary weightings rather than 33% to each, and also factor in the option to leverage/deleverage (gearing). In other words great flexibility. When the Dow/Gold ratio was down at 1.0 levels in 1980 I suspect that little gold/more stock would be preferred. In 1999 when the Dow/Gold was up at 40 levels less stock, more gold. When real yields are 4% then lock into longer dated gilts/bonds, at present low yields opt for short dated instead ..etc. etc.

Historically at times for most asset allocations/blends 5% annualised real losses have occurred across a decade long period of time, when you're also drawing perhaps a 4% SWR income that further pulls down the portfolio value ... to around less than 30% of the former inflation adjusted portfolio remaining at the end of 10 years, 25% or perhaps less when the next years income is also pulled. From there the worry is high and the sustainable outlook - 'very concerning'. In contrast the likes of Personal Asset Trust have the potential to sustain a 4% SWR and likely leave residual value remaining after 30+ years. In effect short term comparisons are irrelevant, its the longer term outlook/outcome that is key. Strive to avoid those bad periods when -5% annualised real total returns compounded with -4% (and rising as portfolio value declines) income withdrawals that can draw down portfolio values to levels where the forward prospects even if great gains occur are bleak. But where the prospect of greater protection comes at the cost of shorter term deviation/drift compared to the alternatives.

More for those that are looking to preserve their wealth, as Harry Browne used to say ... for the money you can't afford to lose.

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Re: Personal Assets v Capital Gearing v RICA?

#421531

Postby forrado » June 23rd, 2021, 10:15 am

While I feel this post would be more suited to the Portfolio Management & Review pages of this site I’ve included it as part of this thread because sections concern the Capital Gearing Trust (CGT).

From the off I’m going to nail my colours firmly to the Capital Gearing Trust mast, and it’s all due to the efforts one man – Peter Spiller. We're both of the same age and I’m old enough to remember Peter Spiller back in the late 1980s when he was single-handedly running Capital Gearing with assets of less than £3-million to play with. It’s nothing short of staggering that after 39 years Peter Spiller is still in place running the trust (with the help of two co-managers who very much think like he does), but with a now market capitalisation of £746.5-million when last I looked. His highly idiosyncratic style of portfolio construction has always intrigued me, and has been very much informed by the work of Harry Markowitz. Spiller readily admits that, as an inexperienced thirty-something, his then employer Capel Cure & Meyers took a chance on letting him run the then distressed Capital Gearing, the only other alternative in 1982 being to wind the trust up.

For more than 25 years, while I was happy to watch from the sidelines, I always backed away from getting involved with Capital Gearing as a shareholder because …
(i) I was ultimately investing with an early retirement goal in mind, and the need to establish sustainable dividend cash flows, rather than seek total returns, to help bridge a pension gap.
(ii) Until the introduction in 2015 of an aggressive Discount/Premium Control Policy Capital Gearing shares always traded on a double-digit premium to the NAV which tended to put me off.

In 2006 I was able to start drawing my DB pension, my State Pension not coming on-stream until 2011. Also, by 2011, I had accumulated £150,759.97 in what were referred to as Free Standing Additional Voluntary Contributions (FSAVCs). Fortunately, with help of a shared inheritance, a steady flow of ISA sheltered dividends from a stable of usual IT income paying suspects, underpinned by DB and State Pension payments, I didn’t need to make a call on my FSAVCs. In due course, that transfer value of £150,759.97 was moved to a SIPP with Alliance Trust Savings (ATS), and invested accordingly along total return lines – as referenced in this Lemon Fool post of 21st February 2019.

Now residing with ii, following the acquisition of ATS, this is what my SIPP looks like at the close of yesterday's business – Click Here

Slide 1 - Overview
• Current Portfolio Value: £460,179.69
• 205.2% gain since 29/10/2011
• Represents a 12.3% CAGR over a duration of 9.6 years
• No funds added or drawn down since established
• Current Holdings … HSBC FTSE All World Index Fund (Acc Units) –and– Capital Gearing Trust (Dividends Reinvested) 50/50 split

Slide 2 - Asset Allocation (using Morningstar Instant X-Ray Tool)
• 63.17% Stocks
• 21.66% Bonds (mostly US and UK inflation linked with some short-dated)
• 3.46% Cash
• 11.71% Other (mostly REITs of the Beds & Sheds variety and some Gold)

Slide 3 - Geographic Allocation (using Morningstar Instant X-Ray Tool)
• 29.90% Greater Europe
• 47.92% Americas
• 22.17% Greater Asia

Slide 4 - Fees (using Morningstar Instant X-Ray Tool)

Slide 5 - Performance of the current two holdings (using Morningstar Instant X-Ray Tool)
• Measured from 31/07/2014 when HSBC launched its FTSE All Word Index Fund
• Note the low Standard Deviation numbers for 3 and 5 Years
• Also note the corresponding Alpha and Beta numbers for 3 and 5 Years. Ideally, I’m looking for an Alpha number above 0 and a Beta number below 1.

In my post of 21st February 2019 the question I was asking myself is still the question I’m asking myself 28 months later. I know a market “reversion to the mean” is waiting out there somewhere; the unknown is where and when. Unfortunately, with each passing year I'm acutely aware that I’ve got less and less time available to me to recover. Furthermore, I just can’t convince myself that going forward developed economies will continue on their merry way debasing currencies by printing money in order to inflate their way out of the debt pile they are under. Over the next ten years I’ve come to believe that I have next to no prospect of generating on-going SIPP returns of anything like the 12.3% per annum of the previous 10 years.

Turning the clock back to 29/10/2011 I set my SIPP the task of quadrupling the opening balance of £150,759.97 to £603,039.88 (effectively the Rule of 72 applied twice) over a 20-year period at an implied CAGR of 7.2%. Obviously, after 9.6 years an annual performance of 12.3% is way ahead of that 7.2% schedule. So much so, a CAGR of 2.6% is all that is required over the remaining 10.4 years to hit the target of £603K. While I confidently expect a shorter wait than 10.4 years, one never knows, the markets will do what the markets will do, and there’s not a thing anyone can do about it. So I made the call to circle the wagons into a defensive position as best I could by diversifying across asset classes and geographic locations at relatively low cost.

Before anybody asks what I intend to do with hoped for proceeds of £603K, it’s earmarked to buy an annuity that will self-fund my social care dotage to a comfortable standard. In the event I should fall off my perch before then, with no legacy issues for me to consider, a certain charity will be in for a nice payday.

Anyone interested can download the most recent Capital Gearing Annual Report and Financial Statements for the year ending the 5th April 2021 – Click Here

Interesting to note – substantial shareholders listed on page 24
• 7.1% LGT Vestra (which I’ve discovered is the banking and asset arm of the Princely House of Liechtenstein)
• 2.9% Peter Spiller (aka Skin in the Game)

Also available to download is the most recent Capital Gearing factsheet for the month ending 31st May 2021 –Click Here

I had vainly hoped to be in attendance at London’s Moorgate for the 58th AGM scheduled for Tuesday, 6th July 2021, but sadly its in closed session for the second year running due to Covid-19 restrictions. I will just have to make do with a shareholder video presentation set to be posted on the Capital Gearing Trust website shortly following the AGM.

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Re: Personal Assets v Capital Gearing v RICA?

#421952

Postby Dumbo » June 24th, 2021, 3:18 pm

Forrado,

You are going to take the 25% Tax Free Lump sum for Whisky and Whores, right. 25% of £600,000 equals a lot of fun :twisted:

Best wishes,

Eddie

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Re: Personal Assets v Capital Gearing v RICA?

#438728

Postby Aminatidi » August 31st, 2021, 6:31 pm

Portfolio as of now pretty much.

Stock name % Weight Sector
1 Fundsmith Equity Class I 29.7% Global
2 Ruffer Investment Company Red Ptg Pref Shs GBP0.0001 28.8% [N/A]
3 Capital Gearing Trust Plc Ord GBP0.25 20.8% [N/A]
4 Buffettology General 10.2% UK All Companies
5 Smithson Investment Trust Plc Ord GBP 10.0% [N/A]
6 Cash 0.5% [N/A]

RICA and CGT are unwrapped and everything else is in an ISA.

New money from salary is going in the ISA at around £2K/month so there's a few pennies that will end up in the unwrapped account as and when.

I sleep at night with that big chunk in RICA but looking at RICA's past it's been a bit of an erratic ride.

I'm contemplating selling that holding and opening an account with Vanguard direct and dumping that 30% into LifeStrategy 60.

Clearly a higher equity risk but also possibly easier to drip small amounts into plus clearly much cheaper.

Appreciate the two might seem a little chalk and cheese but interested in views.

I think I've mentioned but I'm mid 40's and the pot is a shade under £275K as of today

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Re: Personal Assets v Capital Gearing v RICA?

#438738

Postby richfool » August 31st, 2021, 7:13 pm

Aminatidi wrote:RICA and CGT are unwrapped and everything else is in an ISA.

New money from salary is going in the ISA at around £2K/month so there's a few pennies that will end up in the unwrapped account as and when.

I sleep at night with that big chunk in RICA but looking at RICA's past it's been a bit of an erratic ride.

I would be interested in the reasoning why the choice was RICA and CGT as opposed to PNL?

I was put off by Ruffer's foray into Bitcoin earlier this year. I note CGT dabbles in holdings of IT's and ETF's to get certain exposures.

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Re: Personal Assets v Capital Gearing v RICA?

#438740

Postby Aminatidi » August 31st, 2021, 7:26 pm

richfool wrote:
Aminatidi wrote:RICA and CGT are unwrapped and everything else is in an ISA.

New money from salary is going in the ISA at around £2K/month so there's a few pennies that will end up in the unwrapped account as and when.

I sleep at night with that big chunk in RICA but looking at RICA's past it's been a bit of an erratic ride.

I would be interested in the reasoning why the choice was RICA and CGT as opposed to PNL?

I was put off by Ruffer's foray into Bitcoin earlier this year. I note CGT dabbles in holdings of IT's and ETF's to get certain exposures.


Mostly because I see the stocks in PNL as being similar to those in Fundsmith.

The Bitcoin thing didn't put me off as it was actually a very small amount and it actually made it simpler than trying to buy Bitcoin directly in a sensible manner though I get that for some people it was a bit marmite and more about how it changed their view of Ruffer in terms of trusting them to manage their money.

I like CGT as they do stuff that I couldn't (the discount plays plus have you ever looked at the whole holdings - it's insane) so that one won't be going anywhere.

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Re: Personal Assets v Capital Gearing v RICA?

#438761

Postby richfool » August 31st, 2021, 9:35 pm

Aminatidi wrote:
richfool wrote:
Aminatidi wrote:RICA and CGT are unwrapped and everything else is in an ISA.

New money from salary is going in the ISA at around £2K/month so there's a few pennies that will end up in the unwrapped account as and when.

I sleep at night with that big chunk in RICA but looking at RICA's past it's been a bit of an erratic ride.

I would be interested in the reasoning why the choice was RICA and CGT as opposed to PNL?

I was put off by Ruffer's foray into Bitcoin earlier this year. I note CGT dabbles in holdings of IT's and ETF's to get certain exposures.


Mostly because I see the stocks in PNL as being similar to those in Fundsmith.

The Bitcoin thing didn't put me off as it was actually a very small amount and it actually made it simpler than trying to buy Bitcoin directly in a sensible manner though I get that for some people it was a bit marmite and more about how it changed their view of Ruffer in terms of trusting them to manage their money.

I like CGT as they do stuff that I couldn't (the discount plays plus have you ever looked at the whole holdings - it's insane) so that one won't be going anywhere.

Thanks for your reply.

I have looked at CGT and all its various holdings. In fact I noticed previously that he tends to jump in and out of various (presumably value) themes quite often. Last year I remember seeing he been into and then exited renewables amongst others. His current themes include "Beds and Sheds". In my portfolio I do have quite bit of diversity, which includes, REITS, including Supermarket Income (SUPR) and Warehouse REIT (WHR) (sheds) and some energy efficiency related holdings (SDCL), along with INPP (infrastructure) and MATE, all of which CGT holds. CGT is at a premium with a negligible yield and its charges all add up to a disincentive to me. Though I did envy his holdings of stuff like Pershing Square.

I thought Ruffer was a bit irresponsible investing in Bitcoin, bearing in mind its wealth preserving mandate, and it too has a negligible yield, so I have stuck with some PNL and a larger piece of MATE.

MATE - J P Morgan Multi-Asset trust
SDCL _ SEIT Energy Efficiency trust

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Re: Personal Assets v Capital Gearing v RICA?

#438997

Postby Aminatidi » September 1st, 2021, 5:56 pm

Well I'm trying to keep it simple as I know my limitations and they don't go down to the level of awareness that the CGT team appear to have let alone the granularity :)

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Re: Personal Assets v Capital Gearing v RICA?

#452425

Postby Aminatidi » October 23rd, 2021, 9:32 am

RICA up 8% in a month.

Mostly premium v NAV and I have no idea why it's gone on a tear but that'll do quite nicely if it holds up!

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Re: Personal Assets v Capital Gearing v RICA?

#452436

Postby richfool » October 23rd, 2021, 10:14 am

Aminatidi wrote:RICA up 8% in a month.

Mostly premium v NAV and I have no idea why it's gone on a tear but that'll do quite nicely if it holds up!

Maybe due to fears that inflation may be more than just transitory, which is why I bought some earlier this month. It's SP has already overtaken my existing holding of PNL. The downside is I wanted to add some more, but its SP is now 4% higher than I previously bought at.

I note Ruffer holds some cyclical stuff and banks.

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Re: Personal Assets v Capital Gearing v RICA?

#452458

Postby XFool » October 23rd, 2021, 11:28 am

richfool wrote:
Aminatidi wrote:RICA up 8% in a month.

Mostly premium v NAV and I have no idea why it's gone on a tear but that'll do quite nicely if it holds up!

Maybe due to fears that inflation may be more than just transitory, which is why I bought some earlier this month. It's SP has already overtaken my existing holding of PNL. The downside is I wanted to add some more, but its SP is now 4% higher than I previously bought at.

Quite so. I had earlier alighted on RICA as a proxy cash holding (to solve that long discussed problem: "How should I hold cash in an ISA/Share portfolio?") and was even going to transfer external cash into my share portfolio. But I dillied and dallied over this, proving a bad mistake.

Still, as it's now at a premium, as a cash proxy holding, perhaps I ought to be thinking of selling? ;)

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Re: Personal Assets v Capital Gearing v RICA?

#452476

Postby Aminatidi » October 23rd, 2021, 12:09 pm

XFool wrote:
richfool wrote:
Aminatidi wrote:RICA up 8% in a month.

Mostly premium v NAV and I have no idea why it's gone on a tear but that'll do quite nicely if it holds up!

Maybe due to fears that inflation may be more than just transitory, which is why I bought some earlier this month. It's SP has already overtaken my existing holding of PNL. The downside is I wanted to add some more, but its SP is now 4% higher than I previously bought at.

Quite so. I had earlier alighted on RICA as a proxy cash holding (to solve that long discussed problem: "How should I hold cash in an ISA/Share portfolio?") and was even going to transfer external cash into my share portfolio. But I dillied and dallied over this, proving a bad mistake.

Still, as it's now at a premium, as a cash proxy holding, perhaps I ought to be thinking of selling? ;)


That's the dilemma but I already have a decent chunk in Capital Gearing Trust and Personal Assets is a bit too similar to Fundsmith in terms of equity exposure so in the absence of a better home for the money I think for now it's a hold.

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Re: Personal Assets v Capital Gearing v RICA?

#452524

Postby toofast2live » October 23rd, 2021, 6:34 pm

Personal assets has nowhere near the exposure to equities that Fundsmith has. FS is 90% equitiies. PA is about 40%. If equities sink by 20% expect FS to sing by c20%, PA more likely to sink by 5% to 10%.

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Re: Personal Assets v Capital Gearing v RICA?

#452529

Postby Aminatidi » October 23rd, 2021, 6:42 pm

Thanks, I should have been clearer I meant the type of stocks in PNL are closer to Fundsmith type stocks and there's a reasonable amount of duplication/overlap last time I did an x-ray.

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Re: Personal Assets v Capital Gearing v RICA?

#454965

Postby forrado » November 1st, 2021, 8:29 pm

Re: Capital Gearing

Today sees the release of Capital Gearing's Third Quarter Report

Peter Spiller's individual take on investment matters is always worth a read. One wouldn't really expect otherwise of a fund manager who has been doing things his way for near 40 years. This time round Spiller's musings concern inflation and the increasing number of investment companies involved in capital raising exercises.

[Quote] "The scale of issuance in the Investment Companies sector has been something to behold. We stopped counting the number of secondary placings in the quarter as it moved into double digits but the result was £4.2bn of new capital raised. Year to date there has been £11bn raised which has helped to grow the total net assets of the sector to £247bn. In all likelihood 2021 will be the second largest year ever for issuance by Investment Companies, after only 2006. That is not an altogether comforting fact given 2006 proved to be an extremely poor investment vintage." [Unquote]

Or, to use a Charlie Munger-type acerbic turn of phrase, "After the Lord Mayor's show comes the dust-cart".

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Re: Personal Assets v Capital Gearing v RICA?

#458231

Postby forrado » November 15th, 2021, 3:37 pm

Re: Ruffer Trust (RICA)

Announced today (15/11/2021)

Ruffer trust launches first share issue in 11 years

Having witnessed the growth of Personal Assets (PNL) and Capital Gearing (CGT) assets under management thanks to the success of rigorously applied discount-premium control policies by these two trusts over the course of several years. It seems to me Ruffer are using the present buoyant demand by UK investors for such wealth preservation trusts as an opportunity to play catch-up in terms of the trust's AUM. A quick look at market caps of the three trusts, and one sees Personal Assets and Capital Gearing are valued at £1,763m and £931m respectively, while Ruffer stands at £685m.

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Re: Personal Assets v Capital Gearing v RICA?

#458235

Postby XFool » November 15th, 2021, 3:49 pm

...Not too surprising, given their recent share price performance and continuing premium - presumably due to continuing demand.

Now, IF I am given a chance to tender my Lloyds preference shares, perhaps there will be an opening here. All about "IF" and timing, though.


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