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changes to ARBIT

Posted: November 21st, 2020, 9:25 am
by Arborbridge
Following a request on another thread, I've decided to put up the latest version of my Inome IT basket. This also is conveniently timed to record the change made last week: namely that the PLI holding was converted to a holding in MUT, by merger/takeover.



Notice that I have included my holding of 3iN due to its IT like properties and my feeling that it sits more happily here than in my HYP. I know others would disagree, but as far as I can see, it's a moot point.

The ratio between the capital weight of ARBIT:HYP is now 1:1.25. Originally it was nearer to 1:2, but over the years the ARBIT price has improved, and I have also probably reinvested more in it than HYP.

Arb.

Re: changes to ARBIT

Posted: November 21st, 2020, 9:34 am
by ReallyVeryFoolish
A nice selection, I can see why you would be satisfied with it. If it were mine I'd be tempted to eject one of the more canine trusts in favour of Smithson, just add a bit of additional potential growth twist to it.

RVF

Re: changes to ARBIT

Posted: November 21st, 2020, 9:44 am
by Dod101
In the last year I have ditched Edinburgh and Temple Bar but by the nature of these things they will no doubt come good again. You now hold both the Murray Trusts. I do too and have been happy with both.

Do you hold any growth trusts?

Dod

Re: changes to ARBIT

Posted: November 21st, 2020, 9:56 am
by everhopeful
Thanks for sharing. I would be concerned about a lot of cross holdings among some of these. CTY, EDIN, MRCH, MUT, LWBD and IVI all hold the FTSE 100 big beasts such as tobacco and pharma in their top holdings. If you also have a HYP this may well hold similar stocks. If the FTSE 100 stages a recovery with more good vaccine news and perhaps a BREXIT deal you would do well. The international and particularly the Far East trusts give diversity of course.

Re: changes to ARBIT

Posted: November 21st, 2020, 10:27 am
by monabri
Because ARBIT contains some 'foreigners', I wonder how much future income might be protected / affected? We all can readily see when a LSE share cuts a dividend (summarised on Dividend Data website, for example) but it is more difficult to know what is happening dividend wise to companies held by HFEL, SOI. That brings the question round to should ARB v ARBIT only take into account the unit incomes from the likes of CTY, MRCH (mainly UK). After all, ARBIT has a bigger pond to fish in....is ARB at a disadvantage and thus the manager has some mitigation to his possible reprimand for recent poor performance of ARB HYP ! ( :) ).

Re: changes to ARBIT

Posted: November 21st, 2020, 10:53 am
by Itsallaguess
monabri wrote:
Because ARBIT contains some 'foreigners', I wonder how much future income might be protected / affected?

We all can readily see when a LSE share cuts a dividend (summarised on Dividend Data website, for example) but it is more difficult to know what is happening dividend wise to companies held by HFEL, SOI.

That brings the question round to should ARB v ARBIT only take into account the unit incomes from the likes of CTY, MRCH (mainly UK).

After all, ARBIT has a bigger pond to fish in....is ARB at a disadvantage and thus the manager has some mitigation to his possible reprimand for recent poor performance of ARB HYP ! ( :) ).


When one income-strategy chooses to tie one hand behind it's own back in terms of the market that it's 'allowed' to fish in, I'm not sure a fair comparison with another income-strategy would be to ask that second income-strategy to cripple itself in the same manner too...

One of the main aspects of looking at different markets is to introduce increased diversification. That's a benefit stamped on the ARBIT boilerplate...

ARB vs ARBIT seems like a completely valid ongoing comparison between two different income-strategies to me...

Cheers,

Itsallaguess

Re: changes to ARBIT

Posted: November 21st, 2020, 12:02 pm
by monabri
Itsallaguess wrote:[

ARB vs ARBIT seems like a completely valid ongoing comparison between two different income-strategies to me...

Cheers,

Itsallaguess


I certainly agree it is two different income strategies but I "thought" ARB was comparing his HYP versus "leaving it to the professionals" but he has "allowed" the professionals an advantage. What I am contending is that the income contribution to ARBIT from the likes of HFEL/SOI should be removed to level up the ARB v ARBIT playing field? But then, it's probably getting too much hassle?

Re: changes to ARBIT

Posted: November 21st, 2020, 1:00 pm
by Arborbridge
everhopeful wrote:Thanks for sharing. I would be concerned about a lot of cross holdings among some of these. CTY, EDIN, MRCH, MUT, LWBD and IVI all hold the FTSE 100 big beasts such as tobacco and pharma in their top holdings. If you also have a HYP this may well hold similar stocks. If the FTSE 100 stages a recovery with more good vaccine news and perhaps a BREXIT deal you would do well. The international and particularly the Far East trusts give diversity of course.


If you also have a HYP this may well hold similar stocks.

Well, that as the whole point of buying them originally. THe fact that they were "HYPlike" was the attraction. The question to resolve was whether buying the standard UK Trusts would give a better performance than a HYP. Of course, the question was never really answered, and possibly wasn't answerable - mainly because I drifted off into adding foreign diversity.
I am not worried about the cross holdings because even though they fish in the same pond, these ITs produce different results. Although similar, some of UK ITs do things differently: LWBD, MRC in particular.

37% of my income here comes from foreign investments.

Arb.

Re: changes to ARBIT

Posted: November 21st, 2020, 1:03 pm
by Arborbridge
ReallyVeryFoolish wrote:A nice selection, I can see why you would be satisfied with it. If it were mine I'd be tempted to eject one of the more canine trusts in favour of Smithson, just add a bit of additional potential growth twist to it.

RVF


I'm recommending Smithson on a shortlist for my daughter, but in my case I am primarily interested in an income basket. I retired in 2010 and live on this basket plus my HYP, some OEICS and the State Pension.

Arb.

Re: changes to ARBIT

Posted: November 21st, 2020, 1:05 pm
by Itsallaguess
monabri wrote:
Itsallaguess wrote:[

ARB vs ARBIT seems like a completely valid ongoing comparison between two different income-strategies to me...


I certainly agree it is two different income strategies but I "thought" ARB was comparing his HYP versus "leaving it to the professionals" but he has "allowed" the professionals an advantage.

What I am contending is that the income contribution to ARBIT from the likes of HFEL/SOI should be removed to level up the ARB v ARBIT playing field?

But then, it's probably getting too much hassle?


I think Arb's probably best placed to answer that one then...

I thought it was a simple long-term comparison of income-units between ARB (HYP dividends) vs ARBIT (IT dividends), and that was that, with ARBIT not only of course relying on the managers of the ARBIT Investment Trusts themselves, but also enabling a wider investment universe from which to draw those more diverse ARBIT dividends...

Cheers,

Itsallaguess

Re: changes to ARBIT

Posted: November 21st, 2020, 1:08 pm
by Arborbridge
Dod101 wrote:In the last year I have ditched Edinburgh and Temple Bar but by the nature of these things they will no doubt come good again. You now hold both the Murray Trusts. I do too and have been happy with both.

Do you hold any growth trusts?

Dod


Not many. Some growth ITs and OEICS but don't ask me what percentage as I haven't checked for a long while. It's a peripheral activity, and some have been converted in to income trusts over the years.

I did notice the other day that my Fidelity South East Asia is my biggest growth holding, bigger than CTY. This might cause some embarassment if they alter the CGT threshold as I've never bothered to put it in a tax shelter.

Re: changes to ARBIT

Posted: November 21st, 2020, 1:12 pm
by Arborbridge
monabri wrote:
Itsallaguess wrote:[

ARB vs ARBIT seems like a completely valid ongoing comparison between two different income-strategies to me...

Cheers,

Itsallaguess


I certainly agree it is two different income strategies but I "thought" ARB was comparing his HYP versus "leaving it to the professionals" but he has "allowed" the professionals an advantage. What I am contending is that the income contribution to ARBIT from the likes of HFEL/SOI should be removed to level up the ARB v ARBIT playing field? But then, it's probably getting too much hassle?


It's a valid point, and quite frankly something which has "crept up" on me!

Originally, ARBIT was purely a UK HYP-ish set up, but I've sinned, and it became corrupted as I looked to bolster up the foreign shares.

I think it's too late to back date any proper comparison by splitting of the foreigners, but I will on whether it is feasible without too much effort. My initial reaction is: not easy at all.

Arb.

Re: changes to ARBIT

Posted: November 21st, 2020, 1:33 pm
by Wizard
Arborbridge wrote:
monabri wrote:
Itsallaguess wrote:[

ARB vs ARBIT seems like a completely valid ongoing comparison between two different income-strategies to me...

Cheers,

Itsallaguess


I certainly agree it is two different income strategies but I "thought" ARB was comparing his HYP versus "leaving it to the professionals" but he has "allowed" the professionals an advantage. What I am contending is that the income contribution to ARBIT from the likes of HFEL/SOI should be removed to level up the ARB v ARBIT playing field? But then, it's probably getting too much hassle?


It's a valid point, and quite frankly something which has "crept up" on me!

Originally, ARBIT was purely a UK HYP-ish set up, but I've sinned, and it became corrupted as I looked to bolster up the foreign shares.

I think it's too late to back date any proper comparison by splitting of the foreigners, but I will on whether it is feasible without too much effort. My initial reaction is: not easy at all.

Arb.

Other than academic interest I do not see the point in making the effort. HYP has a rule on sticking to UK holdings, ARBIT clearly doesn't. I am sure that is just one of a number of differences. But it is still a perfectly valid comparison between the two to see which is serving your objectives best.

Re: changes to ARBIT

Posted: November 21st, 2020, 2:59 pm
by Arborbridge
Wizard wrote:Other than academic interest I do not see the point in making the effort. HYP has a rule on sticking to UK holdings, ARBIT clearly doesn't. I am sure that is just one of a number of differences. But it is still a perfectly valid comparison between the two to see which is serving your objectives best.


Well, yes it would be only academic. It's all in spreadsheets, so in principle, with much copy and pasting..... even so, the unitising would be fraught and it would be difficult to be sure no errors had crept in.
I'm not convinced I have the stomach for it, but there is a certain temptation since it would make a nice project.

Arb.