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Basket of Seven: 2020 review

Closed-end funds and OEICs
Luniversal
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Basket of Seven: 2020 review

#314953

Postby Luniversal » June 4th, 2020, 12:03 am

The Basket of Seven (B7) was devised in 2010 for the ignorant and apathetic investor who needs to pay bills as they fall due. The portfolio tries for a flow of income from equity-based investment trusts whose purchasing power should grow sedately over time. Capital growth or the reverse is a very minor consideration. As far as feasible it should be 'fire and forget'.

Results of the seven chosen ITs are aggregated to a common Mar. year end, since this best fits their various accounting dates. Trends since the B7's backtested launch on Nov. 10, 2000 (also when 'HYP 1' began) are reviewed.

The B7 houses an increasingly eclectic mix of big and small, British and overseas stocks in all lines of business. The trusts are to be bought in equal amounts: Bankers (BNKR), BMO Capital and Income (BCI-- formerly FCI), JPMorgan Claverhouse (JCH), Lowland Investment (LWI), Mercantile (MRC), Murray International (MYI) and Perpetual Income & Growth (PLI). Latest results are for financial years ended between Aug. 2019 and Mar. 2020.



INCOME
The B7 lifted dividends per share by 5.9% (2018-19: 9.1%), or by 3.5% (6.2%) after retail price inflation (RPI). This was below the average real rise of 4.3% pa during 19 complete years (1).

The portfolio's yield in 2019-20, based on historic or officially forecast payouts, averaged 3.5% (2019: 3.6%). Such is a little above the 3.4% of its lifetime. The gap doubled last year to a full point below the FT All-Share Index yield; these trusts have become more desirable for income, since launch. (In Mar. their dearness was wiped out by the market's collapse, as explained in 'Derisking' below.)

Cover for payouts was 1.09 times, above the B7's whole-life average of 1.04 times. The basket has not distributed uncovered income since the wake of the global financial crisis in 2011-12. Average revenue reserve has been steady at about 13 months of current payout since the crisis. This is below the 15-17 months of the early years before the Global Financial Crisis. but cover from current earnings was usually thinner back then.

On the whole these trusts' divi rates, safety margins and backup look braced for the crunch in earnings threatened by an epidemic of cuts and suspensions among their portfolio picks. Moreover the Ongoing Charges Ratio was 0.56% (0.61%) of year-end net asset value (NAV): as low as it has ever been, against a 2000-19 average of 0.80%.

Dividends per share since the putative Nov. 2000 launch have increased by 247%, up by 114% in real terms. income's purchasing power grew every year... but will 2020-21 break the run? Trusts imposed real cuts, year on year, on twelve of a possible 70 occasions in the past decade, averaging 1.5%.


CAPITAL
Market values have responded over time to the income stream's steadiness. They are far from proof against general fluctuations and there is no simple correlation. In 2018-19 NAVs and share prices had taken their biggest hits since the GFC: value stocks lost ground relative to speculative and momentum punts, despite strong income advances. Contrariwise, last year values recovered while dividend growth slowed.

For 2019-20 the composite NAV swelled by 7.5% (2018-19, down 7.7%) nominal, or by 5.1% real (previously down 10.0%). Share prices were 9.9% (previously -6.3%) to the bad in money terms or 7.6% better (-9.2%) after inflation. Real changes between year ends since the launch have averaged +4.6% for assets per share, +4.9% for the share price, so last year was good.

During it the B7's share prices outperformed the All-Share Index by 8.4 points-- by an average 4.0 points throughout its life, embracing victories in 13 of 18 years. Only in 2016-17 did the basket lag by more than three points, and that in an up year all round. However three of five occasions of underperformance happened in the last six years. That indicates some qualms about the value-centred Income & Growth mandate, even if these tend to be exaggerated by Momentum and Growth apostles.

Doubts did not stop the average discount narrowing from 6.1% to 4.0% between financial year ends. It is now some way below the lifetime 6.4%. The Basket of Seven is not yet back to its dearest. The tightest 2.2% discount was in 2013-14, before jitters about the sustainability of income from 'bond proxy' blue chips set in.

Four of seven members beat the Index in latest accounting years, after three the year before. The norm is for four to outdo the All-Share, but the divergence was wider than normal: two trusts (see the next section) lagged badly.


CONSTITUENTS
Briefly, individual trusts' contributions over the latest ten years:

First, four income metrics: compound annual dividend growth after inflation (2); number of real cuts year on year; average cover; and months' worth of latest payouts in revenue reserve:

BNKR: 3.2%, 1, 1.04x, 21
BCI: 0.2%, 4, 1.09x, 16
JCH: 2.8%, 2, 1.06x, 19
LWI: 5.4%, 1, 1.04x, 14
MRC: 3.5%, 3, 1.08x, 19
MYI: 4.2%, 1, 1.04x, 13
PLI: 2.6%, 0, 1.09x, 12
--------------------------------
B7: 3.5%, 0, 1.05x, 16

Capital metrics: share price change in decade to latest financial year end; number of years trailing the index in last ten; average yield; discount/(premium):

BNKR: +166.9%, 2, 2.6%, 6.5%
BCI: +63.3%, 6, 3.7%, -1.8%
JCH: +82.6%, 4, 3.8%, 6.5%
LWI: +109.8%, 4, 3.4%, 4.9%
MRC: +204.7%, 4, 2.9%, 12.4%
MYI: +64.6%, 4, 4.2%, -3.6%
PLI: -8.9%, 4, 4.0%, 7.2%
-----------------------------------------
B7: +138.3%, 3, 3.4%, 6.1%

BCI is still the dog for both dividend and capital growth, yet inexplicably sells on a premium. Perpetual and Lowland were miscreants on share price last year, underperforming the index by 17.0% and 13.9% respectively. PLI's malaise under the departed manager Mark Barnett has been well covered, but its income record remains tolerable. Lowland, despite or because of jacking up its payout, became a casualty of the perception that smaller UK companies, in which it increasingly trafficks, are bad news COVID-wise. Yet Mercantile, with its midcaps focus, had a strong year. Overall it remains the basket's star turn if one can stomach its jagged swings.


Murray International's penchant for Wall Street and smaller Far Eastern markets did not stop it being perceived as a Value play in the doldrums. Bankers perhaps has been sturdy because despite its unremarkable yield or income growth rate, it keeps firm defences in these nervous days: 21 months in the revenue reserve. Ditto JPMorgan Claverhouse with 19 months.


One can pick apart the components till the cows come home, but the B7 is a unity: bet on one, bet on all. True, it is an eternity-buy-and-hold job merely illustrating a method, so I have been inspecting potential alternates from the wider field of trusts with growth-of-income aspirations. Apart from an innate aversion to thematic or geographically focused trusts, I unearthed hardly any with an adequate 10-year track record save possibly Schroder Oriental Income. BCI now looks a misfit; Scottish American or Troy might fit a lucky-seven selection better. Still, these are marginal factors.


OUTLOOK
It is already accepted wisdom that British dividends may halve in 2021. If they then rally, will that be with a feeble L trendline, a more robust U or a hearteningly rapid V? Will directors, often accused of overdistributing earnings since the GFC, seize the opportunity to 'reset' at permanently lower levels?


All is up in the air. 'We will reconsider dividends when the situation is clearer... we understand their importance to shareholders' is the mood music that became a choral unison within days of William Hill and Weir pulling the plug on Feb. 26, a day that will live in infamy.


In contrast, most IT boards utter soothing noises about how their revenue reserves can take quite a battering; why not, since it is for such a black-swan event as the Chinese plague that they are accumulated. Reserves cannot last for ever, but Dividend Hero status is cherished. Most directors' inclination must be to add to their laurels by keeping calm and carrying on raising the rate, if only by token subinflationary amounts. Since RPI inflation is under 2%, such a dodge is more pardonable.


If the pickup from the present paralysis in corporate payouts is slow, 'hero' might be redefined to salute trusts which peg but do not cut their nominal dividend amounts. It could be a wispy straw in the wind that BMO Capital and Income has announced a second interim below the rate for the first: nothing was said about whether the total will be trimmed, and this could be just a safe-side move, but BCI never before cut a divi in 15 years of paying quarterlies. One more reason to dislike it.


B7 members were not ideally placed to withstand a bear raid. Last year their year-end cash covered 69% of dividends declared, against 92% in 2018-19 and 86% over the last decade. Managers had been piling into stocks, and buying back their own equity faster than at any point during the basket's lifespan. No doubt the extreme cheapness of their borrowings and lousy rates on their deposits urged such courses. They foresaw the crash no more clearly than any of us. All the same, their liquidity and the near-liquidity of their other assets positions them to keep dividends going more comfortably than most sorts of public company.


Income trusts have several expedients besides their kitties for avoiding reductions. They can shell out realised capital gains, though none of my basket picks do so and I prefer it that way. They can avail of cheap debt, since their credit is excellent. Their clampdown on revenue expenses and performance fees has been fierce and may not have much scope for further economising; OCRs used to be 1% before open-ended funds and exchange traded funds applied competitive heat. The gradual reorientation of portfolios overseas, where dividends are 'growthier', could quicken. Discount control and writing options are other means of securing payouts.


Above all the case for an income basket rests simply on this industry's 150-year history of steering through storms. ITs may not have endured exactly this crisis before, but they surmounted as big threats. And the B7's species of trust has a stouter buttress against cuts than the more domestically oriented, FTSE 100-based portfolios of the higher-yielding Basket of Eight. On balance the crisis is fortifying the case for the tortoise against a hare more prone to running injuries.


One caveat: whatever happens, it will affect ITs later, possibly after their investments begin to revive. There is a pipeline lag of a year or two before revenue is received and passed on to trust holders. It was so in the dotcom bust of the early 2000s and the fallout from the GFC. The keenest frost from flu may be felt by the B7 in 2022 and after.


PERFORMANCE 2000-19
Let us see how the basket would have developed in actual pounds. An investor places the same £75,000 lump sum as Pyad's HYP1, with the same equal weighting and 1% acquisition costs and on the same date: Nov. 10, 2000.

The basket would have collared £7,029 of income last year (1), a 6.9% increase. (HYP1 got £10,557 in the year to Nov. 2019.) The B7's yield on last Apr. 1's opening capital was 3.8% (3.5%). This is competitive with deposits or fixed interest, if the collection is viewed as a savings account with some inflation protection for interest and principal. Since 2006 the basket has on average yielded on purchase slightly less than the FTAS, although interestingly it now promises a little more-- for the first time in almost eight years.


Receipts are free of income tax to the basic-rate payer, or to all within an Individual Savings Account or by using the £2,000 dividend allowance. After 19.5 years the basket's £75,000 investment would have dispensed £80,292 of regular dividends, including £794 in one-offs (1). At last it has recouped the initial stake, nominally.


The latest annual valuation coincided with the nadir of the CO-VID panic; in the year to Mar. 31 it collapsed by 25.6% to £137, 102. The B7 had hit a new high of £210,000 three months before, and is now back over £150,000. At the unfortunate anniversary the compound annual growth rate since launch was down from 5.0% at Mar. 2019 to 3.1%, barely above inflation. The portfolio has lost value during seven of 20 periods, the All-Share Index during nine. Average annual outperformance of the Index has been 4.0 percentage points.

Capital worth is aethereal to a never-seller, but signals that the income stream is not being bought at the principal's expense. However faith in the stream may in the nearer term be more about security than expansion of its purchasing power.


DERISKING
Added safety can be obtained by 'derisking' the income. One mimics an index-linked bond and an income reserve backs it up.

The £75,000 basket here illustrated could have been derisked to pay a 2.5% yield in its first year as spendable income. The initial withdrawal rate was meagre due to 'dividend drag', but the B7's growthiness would have enabled three revisions at calendar year ends: in 2007 (+30%), 2012 (+25%) and 2018 (+30%).

The quasi-bond would thereafter pay 5.3% plus uplifts for inflation. It lolls on a reserve worth 23 months of payout at that level, which in two decades has been used for one tiny deduction (£18) the last time the spendable rate was raised.

HYP1's income has been substantially bigger but more erratic; it could be derisked to a 6.0%+RPI withdrawal rate with 20 months in its income reserve. If this comparison is representative, it tells us that ITs with much lower initial income than directly held bunches of high-yielding shares can become competitive over time if stabilisation of income is a must. That said, all British equity payouts were richer before the GFC. In the 2020s the ball game could be much tougher, with a two-year reserve less luxurious a cushion than it would have seemed before the bug struck.

Derisking would have required one-sixth of the B7's receipts to be held back, over and above the ~5% which trusts retained. It is a hypercautious stratagem for our troubled times, if you cannot let your income's buying power wobble.

All B7 members pay out quarterly. A cost-effective lump sum would be £10,000 or more gross. With stamp duty of 0.5% and commission of, say, £12.50 a share, on May 28 ten grand would have got a starting income of £480 pa, averaging £17 once a fortnight. As said before, this is the first time since Jul. 2012 that a basket's income is no dearer than the All-Share's.

No corporate actions would have required a response since 2000. Doris's days and nights are unruffled, but she wears her face mask in bed.

----------------------------------------------------------------------------------------------------------
(1) Over the years four members declared ten special dividends, total £794: BCI £49 (two), JCH £73, PLI (six) £603, MRC £69. There have been no specials since 2017-18.

(2) Dividends' compound annual growth rate is measured from Apr. 2001, to eliminate arbitrarily different payment dates and numbers during the first five months.

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Re: Basket of Seven: 2020 review

#314961

Postby Dod101 » June 4th, 2020, 1:05 am

L'Uni
You may well be or have been a writer but with your very distinctive style, I doubt that much has been published. What a wonderful summary of the B7 for 2020. I am actually more taken by your style of writing and the insights you have provided to us mere mortals than the results of the portfolio.
But they do not look that bad, although I totally agree that there is a lot of water to pass under the Covid 9 bridge in the next year before we can see the real effects in terms of income for ITs in general and for capital values.

Dod

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Re: Basket of Seven: 2020 review

#315841

Postby TUK020 » June 6th, 2020, 3:57 pm

Luniversal wrote:The Basket of Seven (B7) was devised in 2010 for the ignorant and apathetic investor who needs to pay bills as they fall due. The portfolio tries for a flow of income from equity-based investment trusts whose purchasing power should grow sedately over time. Capital growth or the reverse is a very minor consideration. As far as feasible it should be 'fire and forget'.

Results of the seven chosen ITs are aggregated to a common Mar. year end, since this best fits their various accounting dates. Trends since the B7's backtested launch on Nov. 10, 2000 (also when 'HYP 1' began) are reviewed.

The B7 houses an increasingly eclectic mix of big and small, British and overseas stocks in all lines of business. The trusts are to be bought in equal amounts: Bankers (BNKR), BMO Capital and Income (BCI-- formerly FCI), JPMorgan Claverhouse (JCH), Lowland Investment (LWI), Mercantile (MRC), Murray International (MYI) and Perpetual Income & Growth (PLI). Latest results are for financial years ended between Aug. 2019 and Mar. 2020.



Luni,
Tracking your reporting of this over the last few years has been an education! Thank you.
The B7 selection is a decade old. If you were to start over now, with a new selection for a basket for the next couple of decades, what would the leading candidates be?
And would you consider adding a couple of growth ITs to the mix for long term performance?
tuk020

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Re: Basket of Seven: 2020 review

#315869

Postby Luniversal » June 6th, 2020, 5:59 pm

As I wrote:

"One can pick apart the components till the cows come home, but the B7 is a unity: bet on one, bet on all. True, it is an eternity-buy-and-hold job merely illustrating a method, so I have been inspecting potential alternates from the wider field of trusts with growth-of-income aspirations. Apart from an innate aversion to thematic or geographically focused trusts, I unearthed hardly any with an adequate 10-year track record save possibly Schroder Oriental Income. BCI now looks a misfit; Scottish American or Troy might fit a lucky-seven selection better. Still, these are marginal factors."

The B7 has fulfilled the growth-of-income-without-fuss mandate well enough not to require diluting the initial yield by stirring in designated Growth ITs. Typically these return less than half the income of the All-Share, whereas (for the time being) the B7 matches it.

Scottish American (SAIN) is an exception, since it carries an unusually high running yield for an official 'growth' trust. In fact it was briefly considered for the B7 back in 2010*, which is why old TMF posts call the final selection the B7a.

Troy I&G has a low yield for the 'juicy' Basket of Ten type it used to be back when Glasgow Investment Managers ran it. Now Francis Brooke is in charge, it leans more to wealth preservation (cf Conviction Five) but is yielding 3.7% on a solid footing. It might fit the B7 bill going forward, though not in Nov. 2000.

For the record, newer candidates I appraised and rejected last month were

Aberdeen Asian Income- inadequate reserve
Aberdeen Diversified Income & Growth- erratic record
Baring Emerging Europe- too small
BlackRock Energy & Resources- too small
BlackRock World Mining- cutter
Diverse Income- too new, but worth watching
Henderson Far East Income- inadequate reserve
Henderson International Income- inadequate reserve
JPMorgan European Income- inadequate reserve, too small
Majedie- too small, erratic record

I seek £100m+ in net asset value, at least a year of revenue reserve and a superinflationary dividend growth rate over five, preferably ten years. Other investors may be less choosy.

*But had SAIN been picked instead of BCI, income for 2000-20 would have totalled £77,317 rather than £80,292. Baillie Gifford had taken over in 2004 and appeared to be revamping the old warhorse to become like Murray International, a globalist highish-yielder. I did not want to duplicate such objectives in a seven-stock portfolio; besides, SAIN's dividend growth over ten years to 2010 was bad, below BCI's. So it was benched. Today the verdict might well swing the other way, now income prospects abroad look brighter. (I hold SAIN, but not in a baskets context.)

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Re: Basket of Seven: 2020 review

#315874

Postby monabri » June 6th, 2020, 6:08 pm

"Troy Income & Growth (TIGT) has cooled investors’ hopes that all UK equity income trusts can be a safe haven during the coronavirus dividend drought, warning it is ‘almost certain’ to cut payouts before the end of the year."

https://citywire.co.uk/investment-trust ... ider+Daily

Dividend cover ( AIC definition) was low at 0.6 years.

https://www.theaic.co.uk/companydata/0P00008ZND

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Re: Basket of Seven: 2020 review

#315878

Postby monabri » June 6th, 2020, 6:14 pm


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Re: Basket of Seven: 2020 review

#315879

Postby GrahamPlatt » June 6th, 2020, 6:18 pm

Here you go then,

Divi 11% cover 5.66 years

https://www.theaic.co.uk/companydata/0P00008ZMM

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Re: Basket of Seven: 2020 review

#315890

Postby DavidM13 » June 6th, 2020, 7:19 pm

GrahamPlatt wrote:Here you go then,

Divi 11% cover 5.66 years

https://www.theaic.co.uk/companydata/0P00008ZMM



That does not look right to me. I believe Morningstar are counting the 25p special dividend as recurring, hence the inflated yield. I believe it should be nearer 1.8%. (5p normal dividend / 264p share price ) and have made the change manually for now while they investigate.

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Re: Basket of Seven: 2020 review

#315892

Postby monabri » June 6th, 2020, 7:37 pm

DavidM13 wrote:
GrahamPlatt wrote:Here you go then,

Divi 11% cover 5.66 years

https://www.theaic.co.uk/companydata/0P00008ZMM



That does not look right to me. I believe Morningstar are counting the 25p special dividend as recurring, hence the inflated yield. I believe it should be nearer 1.8%. (5p normal dividend / 264p share price ) and have made the change manually for now while they investigate.


Here's the dividend history...I know nothing about DNE. They've paid some stonker specials in the last few years out of capital.



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Re: Basket of Seven: 2020 review

#315900

Postby GrahamPlatt » June 6th, 2020, 7:52 pm

Guilty as charged. Of course you’re right there monbari. In fact I had checked it out on Stockopedia beforehand (yield 1.89%)
It was tongue-in-cheek. Perhaps I should warn people when I’m doing that.

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Re: Basket of Seven: 2020 review

#316066

Postby everhopeful » June 7th, 2020, 12:34 pm

DNE is winding up and pays out capital as holdings are sold. It is not really relevant to this discussion.

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Re: Basket of Seven: 2020 review

#316323

Postby Luniversal » June 8th, 2020, 10:40 am

https://www.investegate.co.uk/law-deben ... 00071773P/

Law Debenture confirmed this morning that its dividend will at least be maintained at 26p a share, in equalised quarterly payments. The prospective yield is 4.9% or more at 534p. The fiduciary services business, not closely correlated with corporate earnings trends, is anchoring revenue in these fraught times. The trust thus becomes a possible substitute for BMO Capital & Income in a Basket of Seven.

Law Deb. is in my 'Growth Ten;, but on this yield it might almost suit the Basket of Eight.

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Re: Basket of Seven: 2020 review

#316385

Postby monabri » June 8th, 2020, 12:40 pm

Luniversal wrote:https://www.investegate.co.uk/law-debenture-corp--lwdb-/rns/dividend-declaration/202006080700071773P/

Law Debenture confirmed this morning that its dividend will at least be maintained at 26p a share, in equalised quarterly payments. The prospective yield is 4.9% or more at 534p. The fiduciary services business, not closely correlated with corporate earnings trends, is anchoring revenue in these fraught times. The trust thus becomes a possible substitute for BMO Capital & Income in a Basket of Seven.

Law Deb. is in my 'Growth Ten;, but on this yield it might almost suit the Basket of Eight.


It was the 'dividend cover' ( and yield) that attracted me to Law Deb.

https://www.theaic.co.uk/companydata/0P00008ZOC

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Re: Basket of Seven: 2020 review

#317272

Postby toofast2live » June 10th, 2020, 6:33 pm

Thx Luni. Do miss your regular musings, but a few times a year is better than nothing....

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Re: Basket of Seven: 2020 review

#317323

Postby monabri » June 10th, 2020, 9:25 pm

Basket of Seven 2019
viewtopic.php?p=225773#p225773

Basket of Seven 2018
viewtopic.php?p=145627#p145627

The history
viewtopic.php?p=120011#p120011

Basket of 8 2019
viewtopic.php?p=254212#p254212

The Growth 10
viewtopic.php?p=278607#p278607

A HYP-othetical review
viewtopic.php?p=275629#p275629

(there, that should hold you for a while!!) ;)

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Re: Basket of Seven: 2020 review

#317352

Postby XFool » June 10th, 2020, 11:37 pm

Just a slight correction to this, which I presume is a slight mis-wording on your part which I feel could mislead newcomers to investment:

Luniversal wrote:Receipts are free of income tax to the basic-rate payer, or to all within an Individual Savings Account or by using the £2,000 dividend allowance.

They are course not automatically "free of income tax to the basic-rate payer". The dividends are free of income tax if the shares are held in an ISA (or SIPP). Otherwise they are subject to the usual income tax rules.

For dividends, no tax is charged on total dividends below £2000. Above that, for a basic-rate payer, tax is charged at the rate of 7.5%; for a higher-rate payer, at the rate of 32.5%; for an additional-rate payer, at the rate of 38.1%

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Re: Basket of Seven: 2020 review

#317537

Postby Luniversal » June 11th, 2020, 12:32 pm

Monabri, XFool-- thank you for the links and the clarification.

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Re: Basket of Seven: 2020 review

#320505

Postby Eboli » June 22nd, 2020, 7:00 pm

IMHO the most important observation was given by TUK020 who said
The B7 selection is a decade old. If you were to start over now, with a new selection for a basket for the next couple of decades, what would the leading candidates be?

This has always been my complaint about these historical statistics. No one - well perhaps only a few brave souls - would have ever held Pyad's HYP1 throughout because of the over-concentration on two shares within the portfolio. I would doubt whether you would have been wise to hold onto the constituents of Bo7 throughout - indeed if you were starting a basket (whether of 7 or another number) with the Bo7 objectives in 2020 you would have to be very persuasive to argue the merits of BCI and PLI. The former (ex-FCI) has underperformed by comparison with 5 other members of Bo7 for a decade now and PLI could be anything since sacking its manager last season as we have no idea what it's future will be from the latest Chairman's statement. I would be hard placed to find two other trusts to fit the requirements of the basket - the somewhat quirky Scottish American was an original contender and indeed was a Bo7 constituent for a few weeks when L'uni dithered with it (and that is not intended as an animadversion). Though whether a Bo5 or a Bo7 minus BCI and PLI some less UK orientated trust or two is, to my mind, a far more interesting discussion.
Eb.

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Re: Basket of Seven: 2020 review

#323293

Postby taken2often » July 2nd, 2020, 3:55 pm

Very pleased to see that Luni is still on the go and maintaining his usual high standards. Someone asked, do people really buy shares and keep them that long ago. Well the answer is yes. I have PIBS, Prefs and Shares that I bought 20 years ago and still have them. In a pension where you are only able to reinvest during the early years the effects of compounding really show up if you invest for income. The income curve is nearly always up, even when the growth is down. There are a lot of very sick people now who only opted for growth. On my pension fund for 2019 the yield on current price was 6.25%. Yield on cost 19.1%.

Back to the Basket of 7. Choice buy an non indexed annuity for 75k or the basket of 7. The annuity the money is gone when you buy. When you die the pension has gone. Income from the 7 could roll on for ever. It has already covered initial cost.

I did not follow Luni as I am a wee bit of a yield chaser, see capital gain as capital at risk, so I trim off and buy more yield. Now have 128 items
38 UK It's and 22 US CEF's. I would buy more of these but the EU, Unit Trust and the CEF industry has killed all purchases except EU funds due to KID
( Key Information Data). An agreed rubbish document that other countries will not put out due to legal liabilities.

Finally on income growth through time 10 years ago I expected to draw my pension. I fought hard for UFPLS thinking I would only draw on the growing income. I now find I will never draw on my Sipp as I have had similar income growth in my ISA and Taxable accounts. The crash has saved my LTA bacon.

Regards to Luni
Bob

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Re: Basket of Seven: 2020 review

#323358

Postby tjh290633 » July 2nd, 2020, 7:03 pm

taken2often wrote:Someone asked, do people really buy shares and keep them that long ago.


I inherited ICI, Marks & Spencer and Brooke Bond Liebig in 1970. BBL were taken over by Unilever for cash not long after. Ironically I bought them (ULVR) in 2010. I still hold a descendant of ICI (AstraZeneca) and Marks & Spencer. I also held another offshoot of ICI, IMI in 1977, which I sold in 1988 to invest in my then new PEP. I bought back into IMI in 2009.

It's a funny old world.

TJH


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