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Bond proxies - seeking a solid dividend focus.

Closed-end funds and OEICs
88V8
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Bond proxies - seeking a solid dividend focus.

#361406

Postby 88V8 » November 30th, 2020, 12:22 pm

Not quite bonds.... I have decided to sell much of my Preference share portfolio.
The reasoning may be seen here https://lemonfool.co.uk/viewtopic.php?f ... &start=440 specifically #360360.

This is quite a major step as it involves rotating around 25% of my assets.

The merit of Prefs has been reliability and high yield.
I seek to replicate this by boosting my IT portfolio, and would appreciate input from seasoned IT investors.

I am interested solely in income. Capital is not really an issue, although of course we all prefer blue ink.
Given that I have been happy with Prefs where the income is fixed and does not rise, it follows that I would be happy with the same situation in terms of IT dividends. It does not bother me if rises are minimal or even non-existent, so long as the yield is good and there are no cuts.

Already I have a small portfolio of so-far reliable divi payers, created to reduce my reliance on individual HYP shares.
CTY, JCH (Claverhouse), MRCH, MUT.
My overseas exposure is limited to HFEL.

I also hold BERI BlackRock Resources for resources exposure, and SHRS Shires Income for Fixed Interest. Neither has a long record.

I may top up some or all of the above, opportunistically when they are at a discount.

As to additions, I could add MYI yielding 5% with a 15 year record - is it a good idea to hold two trusts from the same manager?

Also ASEI - 7% and 20 years - and Law Deb LWDB for something rather different despite its modest 4.2% yield and 10 years.

If I fish further down the AIC dividend heroes there is ATY Athelney which would be a smaller companies diversification yielding 5%, albeit only a 16 year record they have more than two years' cover.
Also one I have I not seen mentioned before, CGS New City NCYF with an alarming 8.9% yield and 12 years, cover 0.9 years.

There are many other heroes with a feeble yield, which I shall eschew.

If I had all the above, that would give me a total of twelve ITs. Is that perhaps enough, given that I also have HYP shares, plus some Prefs and bonds?

Is there anything on the overseas front that I am missing?

V8

thebarns
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Re: Bond proxies - seeking a solid dividend focus.

#361468

Postby thebarns » November 30th, 2020, 3:07 pm

Two others that I use for income, in addition to some of the ones you have already mentioned.

MCT

And

CMHY.

And I am not sure whether you are averse to funds or not. If not, check out VT RM Alternative Income. And if averse to the fund, look at the list of holdings as I hold a lot of their holdings individually, primarily for an income stream.

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Re: Bond proxies - seeking a solid dividend focus.

#361473

Postby Parky » November 30th, 2020, 3:12 pm

Sequoia Infrastructure fund should be a good bond proxy, paying 6% yield. see viewtopic.php?f=8&t=21718&p=340874&hilit=sequoia#p340874

flyer61
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Re: Bond proxies - seeking a solid dividend focus.

#361509

Postby flyer61 » November 30th, 2020, 4:46 pm

NAIT and JETI - have a look at.

Avantegarde
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Re: Bond proxies - seeking a solid dividend focus.

#361555

Postby Avantegarde » November 30th, 2020, 7:06 pm

There are many ITs from which to chose. Go to the AIC website and use the search function to sort the various ITs by investment type, current yield, share price return, total return, annual percentage dividend increase, or any other of the numerous factors you may consider relevant. If you can't decide, go for a world index tracker because then you will be receiving exactly what the world stock market has to offer in terms of both share price rise/fall and dividends, but at a much lower cost than with ITs.

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Re: Bond proxies - seeking a solid dividend focus.

#361587

Postby dealtn » November 30th, 2020, 9:01 pm

88V8 wrote:
I am interested solely in income. Capital is not really an issue ...


How about a UK Government Gilt 6% 2028. 6% Coupon, >4% Yield on purchase price?

toofast2live
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Re: Bond proxies - seeking a solid dividend focus.

#361754

Postby toofast2live » December 1st, 2020, 11:59 am

dealtn wrote:
88V8 wrote:
I am interested solely in income. Capital is not really an issue ...


How about a UK Government Gilt 6% 2028. 6% Coupon, >4% Yield on purchase price?


But he does like "blue ink"...

88V8
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Re: Bond proxies - seeking a solid dividend focus.

#361760

Postby 88V8 » December 1st, 2020, 12:23 pm

thebarns wrote:Two others that I use for income, in addition to some of the ones you have already mentioned.
MCT
CMHY.

MCT drags me out of my UK comfort zone. Canada/US equities. Yield 5.8%, currently 15% discount, but divi cut in 2009 and no cover.
Perhaps a tickle.

CMHY Yes, a good bond proxy as it holds a variety of bonds. Again, some non-UK exposure. Yield 5.5%, trading around par, cover 4 months.
Divi cut in 2011.
I'll give that a go.

Parky wrote:Sequoia Infrastructure fund should be a good bond proxy, paying 6% yield

SEQI Yes, as you say, 6%ish yield. Infrastructure debt. New fund in 2015. No cover hmm. NAVs only monthly. Appears to trade at a premium.
I'll put that one on watch.

flyer61 wrote:NAIT and JETI - have a look at.

NAIT North America income. Cover 18 months. Yield 4% at which point I slightly lose interest.

JETI European income. Yield 5.2%, discount 12%, cover 9 months.
Divi cut in 2014 but decent growth since.
Otoh they have a lot of Financials and I think that sector is riding for a fall. One can always pick holes..... Also rates a tickle.

Avantegarde wrote:There are many ITs from which to chose. Go to the AIC website and use the search function.

Yes that's an impressive worm hole in which can spend hours of indecision. It would be nice if the Search function offered Time SInce Last Cut and Cover.

From the AIC Dividend Heroes, ATY Athelney with its 24 months of cover, 16 years uncut, and 5% yield with 24% discount ... makes the grade.

And ASEI Aberdeen Income with 13 months and a 20 year Hero, yielding 6.9% with 8% discount.

And finally Law Deb LWDB a highly-geared oddball with 2 years of cover which I'll add for novelty value even though it yields only 4.2% and I've just said that 4% isn't attractive.

dealtn wrote:How about a UK Government Gilt 6% 2028. 6% Coupon, >4% Yield on purchase price?

Mmmm TR28 yielding 4% and change. Never bought gilts. Unexcited by 4%. I suppose they are at least 'safe'.
I don't know enough about gilts to start dabbling, do I? No, in fact I know effectively nothing. Other than safety - until we next go running to the IMF - do they have merit for an amateur dabbler?

Well, thankyou for the leads so far.
I shall make a start on my rotation today. The sun is shining, that seems auspicious.

V8

monabri
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Re: Bond proxies - seeking a solid dividend focus.

#361769

Postby monabri » December 1st, 2020, 12:47 pm

The AIC website can list out "cover" ...Itsallaguess "publishes" regular tables . Last one in November but instructions included to DIY.

viewtopic.php?p=352383#p352383

everhopeful
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Re: Bond proxies - seeking a solid dividend focus.

#361783

Postby everhopeful » December 1st, 2020, 1:19 pm

TR28 has a negative yield to maturity.

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Re: Bond proxies - seeking a solid dividend focus.

#361790

Postby dealtn » December 1st, 2020, 1:33 pm

everhopeful wrote:TR28 has a negative yield to maturity.


Of course, but the OP it seems isn't concerned by this.

After all...

88V8 wrote:
I am interested solely in income. Capital is not really an issue ...



Why income is solely important and a Capital loss is ok isn't explained.

88V8
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Re: Bond proxies - seeking a solid dividend focus.

#361818

Postby 88V8 » December 1st, 2020, 2:35 pm

dealtn wrote:
everhopeful wrote:TR28 has a negative yield to maturity.

Of course, but the OP it seems isn't concerned by this.
After all...
88V8 wrote:I am interested solely in income. Capital is not really an issue ...

Why income is solely important and a Capital loss is ok isn't explained.


Haha, well I'm quite good enough at losing capital without doing it deliberately.

As an example of 'capital doesn't matter', Imperial Tobacco is off 20% on purchase, but so long as the divis continue indefinitely, I can put up with that.
The main reason it's not important is that we have no special need of more capital and those who will inherit if we ever cark it, aren't short of a bob.

V8

88V8
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Re: Bond proxies - seeking a solid dividend focus.

#361820

Postby 88V8 » December 1st, 2020, 2:38 pm

monabri wrote:.... but instructions included to DIY.viewtopic.php?p=352383#p352383

So they are, thankyou.

V8

88V8
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Re: Bond proxies - seeking a solid dividend focus.

#361834

Postby 88V8 » December 1st, 2020, 3:35 pm

Addendum.... also bought some NCYF as mentioned in my OP.

Haven't yet managed to buy any ATY, the market cap is only £4mio, they are not very liquid....

V8

88V8
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Re: Bond proxies - seeking a solid dividend focus.

#362068

Postby 88V8 » December 2nd, 2020, 10:54 am

Running my eye down the latest AIC table https://lemonfool.co.uk/viewtopic.php?f=31&t=26529 kindly posted by IAAG - I really ought to wear my specs whilst looking at these tables - anyway running my four eyes down the last two columns of the table, I notice Majedie MAJE with 53 months of cover and a 5% yield. Global equity. Five-year CAGR 8%.
The dividend has not grown consistently, but where there have been cuts they have been small and quickly restored.

Their website is full of woffle, and the performance of Majedie's UK income fund has not been great, but I have enough UK so I can turn a blind eye to that aspect of their activities.

Anyway, I have added MAJE to boost my global portfolio. Not what I would regard as a full holding, it's an OEIC for which I have less enthusiasm.

I also sent a Market Price order to see if I can buy some ATY, they seem to have rarity value.

Other than top-ups, that probably satisfies my desire for ITs atm.
Let's see how it goes.

V8

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Re: Bond proxies - seeking a solid dividend focus.

#362574

Postby monabri » December 3rd, 2020, 12:42 pm

ATY charges are exceedingly high at 4.52%.

https://www.theaic.co.uk/companydata/0P0000I2SC/gearing

88V8
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Re: Bond proxies - seeking a solid dividend focus.

#362748

Postby 88V8 » December 3rd, 2020, 10:37 pm

monabri wrote:ATY charges are exceedingly high at 4.52%.

Well, the fund is very small. And net of that they yield c5%. But yes, they'd better be good. Their upside is X years of divi growth, decent yield, high discount. I bought a tickle.
It wouldn't be hard to buy 1% of the fund.
That would make me quite a major shareholder. I wonder if they send hampers to major shareholders.

V8


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