Personal Assets v Capital Gearing v RICA?

[richfool]

A trust I hold as well as PNL is MATE (JP Morgan Multi- Asset trust). It is in the Flexible multi-asset class sector, and holds equities, bonds, infrastructure etc and has performed better than PNL or CGT or RICA, since the falls early this year. Though as a relatively new (and small) trust it doesn't have the track record of the others and doesn't hold TIPS or index linkers like the big three. It does however offer c 4.49% dividend yield at a discount to NAV of c11.7 %

https://www.hl.co.uk/shares/shares-sear ... ary-shares

Thread on MATE here:

viewtopic.php?f=54&t=15401&p=359949#p359949

[Aminatidi]

Yes I just posted a comment in the MATE thread.

I can't quite work out why it's on such a large discount and if there's much expectation of it closing.

It doesn't look like it's full of crap but it also doesn't look especially defensive either given its performance in March.

[toofast2live]

Yes I just posted a comment in the MATE thread.

I can't quite work out why it's on such a large discount and if there's much expectation of it closing.

It doesn't look like it's full of crap but it also doesn't look especially defensive either given its performance in March.

No it won’t be “defensive”. It’s stuffed with over 60% in equities. Expectation would be If equites go down 20% MATE Would decrease by maybe 10%. Au contraire the likes of PNL are only about 35% equity.

[Aminatidi]

Anyone have any thoughts on RICA these days?

I have around 5% in it whilst I have around 80% split evenly between CGT and PNL.

I keep wavering between topping up RICA monthly v doing a bit of a rebalance to get a more even split between the three.

My perception of RICA is it's "bursty" and doesn't seem quite as smooth a line as the others which has me cautious of lump summing with it.

[Rooky102]

Re: Anyone have any thoughts on RICA these days?

I've just dumped all my RICA due to their move into Bitcoin:
https://www.ruffer.co.uk/2020-portfolio-update

[Eboli]

Depends what you want each for. For example, I use PNL as a cash substitute and given I would earn so little on cash in my ISA I am very happy I held a large sum (for me) with PNL about 18 months ago. I gradually converted this into more racy ITs last summer and have been more than happy with the result.

Eb.

[Lootman]

Re: Anyone have any thoughts on RICA these days?

I've just dumped all my RICA due to their move into Bitcoin:
https://www.ruffer.co.uk/2020-portfolio-update

Why would bitcoin reserves need to be custodied in cold storage? Does it go off?

Personally I do not try and second guess what a fund manager does. If I did then I might have sold Scottish Mortgage when it bought Tesla and that would have been a bad move.There is an argument that it is a safer way to take some bigger risks.

[toofast2live]

Bitcoin is like a lottery ticket. Massive upside, but you could lose your stake. In reality you’d probably lose 50%-60% of your stake. I’m happy with the RICA move.

[Rooky102]

IMHO, RICA going into Bitcoin is a "canary in the coal mine" moment.
Like Woodford buying into cold fusion, or Alexander Darwall persisting with Wirecard etc etc

To me Bitcoin has no underlying value, is not an investment, but gambling on there being a greater fool. If I'm ever tempted, I remind myself that, at purchase, I am the greatest fool of the moment.

I held RICA for years as a dull but safe pair of hands: Bitcoin speculation is the exact opposite of that!

[toofast2live]

And that’s what makes a market. Buyers and sellers.

But remember nothing has “underlying value”. Only the value that buyers and sellers ascribe to it at any particular point in time.

Long dated gilts currently have no “underlying value”. They guarantee you will lose money when they are redeemed.

[scrumpyjack]

IMHO, RICA going into Bitcoin is a "canary in the coal mine" moment.
Like Woodford buying into cold fusion, or Alexander Darwall persisting with Wirecard etc etc

To me Bitcoin has no underlying value, is not an investment, but gambling on there being a greater fool. If I'm ever tempted, I remind myself that, at purchase, I am the greatest fool of the moment.

I held RICA for years as a dull but safe pair of hands: Bitcoin speculation is the exact opposite of that!

I have read their comments on why they bought Bitcoin. I can see the theoretical attraction of a digital currency that is secure, cannot be forged, is outside the control of any government and has a strictly limited supply.

The main problems I see with Bitcoin are that

it is so inefficient it cannot be used as a mass market medium of exchange. It needs huge quantities of electricity to be operated and the incentive for entities to do that will slowly expire as it is mined. It is highly contrary to the green agenda.

Much of it is held by a few people who never trade it (eg the Winklevoss twins) so there may well be a false market

If it becomes too big, governments may respond to it by making it impossible for their citizens to use. They may well do that if they see it as threatening their currencies or providing too easy a route for money laundering or for unreported transactions

So, yes, very much modern tulips, I think!

Ps don’t hold RICA and won’t after this

[dealtn]

And that’s what makes a market. Buyers and sellers.

But remember nothing has “underlying value”. Only the value that buyers and sellers ascribe to it at any particular point in time.

Long dated gilts currently have no “underlying value”. They guarantee you will lose money when they are redeemed.

True, but that doesn't mean they have no "underlying value" does it? It means the underlying value is below the current market price. Until and unless Gilts redeem ay zero, and not par, (and pay no coupons) it is ridiculous to claim they have no value.

[Aminatidi]

Depends what you want each for. For example, I use PNL as a cash substitute and given I would earn so little on cash in my ISA I am very happy I held a large sum (for me) with PNL about 18 months ago. I gradually converted this into more racy ITs last summer and have been more than happy with the result.

Eb.

Broadly speaking the same thing which is to slowly make me money without (hopefully) losing it.

The racy IT stuff is held in Scottish Mortgage Trust and Baillie Gifford US Growth.

I had a bit of a reshuffle today and sold down a little Capital Gearing and Personal Assets and added to an existing Ruffer holding so it now looks like this.

Stock name % Weight Sector
1 Capital Gearing Trust Plc Ord GBP0.25 37.2% [N/A]
2 Personal Assets Trust PLC Ord GBP12.50 36.2% [N/A]
3 Ruffer Investment Company Red Ptg Pref Shs GBP0.0001 11.0% [N/A]
4 Baillie Gifford US Growth Trust plc Ord GBP0.01 8.5% [N/A]
5 Scottish Mortgage Investment Trust Plc Ord GBP0.05 6.9% [N/A]

I do find Bitcoin wonderfully Marmite in how it divides people.

I don't know whether Ruffer's move is a sensible one but I did see Blackrock have announced/approved dealing in Bitcoin futures so it seems it may be getting a little more mainstream.

[XFool]

Well, I just bought 5000 more RICA (despite, not because of, Bitcoin), so...

I too was rather taken aback at the announcement. OTOH, in my understanding, it isn't so much that RICA has invested in Bitcoin as the RICA holding of Ruffer Multi-Strategy Funds who now hold Bitcoin. Thereby RICA have a small, indirect holding in Bitcoin.

But, as they say, RICA has a somewhat unusual and unorthodox approach. This has always been so, that's the deal with RICA.

[richfool]

(Besides Bitcoin) I didn't and don't like Ruffer's exposure to some of its UK Equity holdings, UK banks (3) and major Oilies (2). So I only use PNL for my modest buffer.

More recently I took some profit off the table from SMT, and bought into ASLI (European Logistics) and SUPR (UK supermarket properties) and added to commodities (BERI and CYN), which should also boost dividends.

[Aminatidi]

(Besides Bitcoin) I didn't and don't like Ruffer's exposure to some of its UK Equity holdings, UK banks (3) and major Oilies (2). So I only use PNL for my modest buffer.

More recently I took some profit off the table from SMT, and bought into ASLI (European Logistics) and SUPR (UK supermarket properties) and added to commodities (BERI and CYN), which should also boost dividends.

Their equity choice (Ruffer) isn't one I'd choose myself so I have to admit I'm in "trust the managers" territory and of course I'll be the first to admit that what little I've learned in 3 years of investing doesn't mean I have a clue how an economy beaten up by a pandemic should come back to life.

I still hold CGT and PNL equally but PNL has gone pretty much sideways for about six months now - preserving so doing what it says on the tin but that's where I find I quite like the "and grow" part too if possible

[XFool]

The fact remains that, come March last year, RICA did what it said on their tin.

[richfool]

The latest Personal Assets January Quarterly Report is out. I access it here:

https://www.patplc.co.uk/Portals/0/Lite ... 0Clean.pdf

[XFool]

A quick couple of questions here that hopefully somebody may know the answer to:

Ruffer IT (RICA) shares are classed as 'Redeemable Participating Preference' shares. I wonder why they are Preference shares rather than Ordinary shares. Also, what is the significance of the term 'Participating'?

TIA

[richfool]

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. PAT's share price rose by £38.00 during the year and at 30 April 2021 was £471.00. An analysis of performance is provided in the Chairman's Statement and Investment Manager's Report below.

Since PAT became independently managed in 1990 its NAV has increased by 720.8% compared to the FTSE All-Share's 281.9% and the RPI's 140.7%.

https://www.investegate.co.uk/personal- ... 00032361B/