My IT (Income & Growth) Portfolio - July Update

[richfool]

This is my portfolio as at 14th July. The main focus is income with diversity and some growth.

NB.The % figures are the percentage of the overall portfolio:

UK GROWTH & INCOME TRUSTS
DUNEDIN INCOME GRO ORD 3.9%
LAW DEBENTURE CORP ORD 2.9%
MERCHANTS TRUST ORD 2.6%

GLOBAL G&I IT's
HENDERSON INTL INC ORD 2.3%
JPMORGAN GBL GTH & ORD 10.2%
SCOT INV TRUST ORD 1.6%
MURRAY INTL TRUST ORD 3.0%
SCOT AMERICAN INV ORD 4.7%

GLOBAL GROWTH TRUSTS
BRUNNER INV TR ORD 3.8%
MID WYND INTL INV ORD 1.4%

GLOBAL MULTI-ASSET/DEFENSIVE IT's
PERSONAL ASSETS TR ORD 2.9%
RUFFER INVEST SHS GBP 3.5%

ASIAN PACIFIC INV TRUSTS
ABERDEEN ASIAN INC ORD 5.2%
JPMORGAN ASIAN G&I IT ORD 1.4%

NORTH AMERICAN IT's
BLACKROCK SUSTAINABLE 2.6%
MIDDLEFIELD CAN INC PRF 9.6%

EUROPEAN INV TRUSTS
EUROPEAN ASSETS TR ORD 1.7%
JPMORGAN EURO GROW ORD 5.2%

COMMERCIAL PROPERTY IT's/REIT's
ABDN PROP INC ORD 3.0%
EDISTON PPTY INV C 2.9%
PRIMARY HLTH PROP 2.0%
WAREHOUSE REIT PLC ORD 1.4%

UTILITIES & INFRASTRUCTURE
ECOFIN GBL UTILITI ORD 4.3%

RENEWABLES
BLUEFIELD SOLAR IN ORD NPV 1.3%
DOWNING RENEWABLES ORD 1.5%
ECOFIN U S RENEWAB USD0.01 (GBP) 1.3%
GORE STREET ENERGY ORD 2.4%
GRESHAM HOUSE ENGY ORD 3.1%
JLEN ENVIRONMENTAL NPV 1.8%
NEXTENERGY SOLAR F RED ORD NPV 2.4%

GOLD/RESOURCES/ENERGY
BLACKROCK ENGY & R ORD 2.9%
BLACKROCK WORLD MI ORD 1.1%


PORTFOLIO CHANGES over the last 6 months:

NEW ADDITIONS:
MYI - Murray International Income (Global G&I)
Renewables: DORE and NSEF and RNEP (the latter US focussed)

TOP UPS:
During the down dips of the last 6 months, I have taken the opportunity to top up BUT (Brunner) in the Global Growth sector; SAIN in Global G&I's; MULTI-ASSET/DEFENSIVES: PNL and RICA; and LWDB and MRCH (UK G&I's).

DISPOSALS:
MATE - redirected funds into PNL and Ruffer (RICA).
SUPR (Supermarket Inc)
HFEL.(to stop the capital depreciation and reduce exp to China)

REDUCED:
WHR (top-sliced)

I believe SCIN will disappear into JGGI at end of August.

I'm currently sitting on some dry powder, and am pondering whether to deploy that into STS and either a new holding of FCIT or a top up of: Mid Wynd (MWY). The latter to increase US exposure. The former to add defensives.

[Dod101]

Interesting. You have things pretty well covered. I am tempted to ask why you do not just buy a buy tracker?

Dod

[baldchap]

Thanks Richfool I always enjoy keeping an eye on your portfolio.

I have gone slightly the other way and stuck to Global Income and Global only. The managers can decide which areas (assets and geographical) to move in and out of.
I am happy with the relative simplicity of 5 IT's. The risk is suitably spread, all being with different management companies.

[bonrepos]

Hi Richfool

Thanks for your post.

Can you say what was the reasoning for giving up JP Morgan Multi Asset ( MATE) for PNL and RICA
as they are all in the AIC flexible sector?

Thanks

[richfool]

Some additional General Comments on the above portfolio:

I thought someone might say: "you have a lot of renewables there!" That's probably so, and was just how things worked out.

Re the Renewables:
I already held the two battery storage trusts: GSF and GRID, when I thought I should add solar and wind and so added: Bluefield Solar and JLEN. Then I came across DORE which had exposure to not only wind and solar, but also to hydro, (as well as Sweden from a geographical point of view). Then I spotted: NESF, which had a 6%+ dividend yield, and was trading at a discount. Then finally RNEP, (the sterling version of RNEW) which gives exposure to solar and wind in the USA, therefore generating dollar based dividends.

(Renewables excepted!) I have had a general point in mind for some time, to reduce the number of holdings to reduce the need and frequency of monitoring the portfolio. It was against that background that VOF (Vietnam Opportunities Trust), MATE, and HFEL were disposed of, thus reducing my Asia Pacific holdings from 4 to 2 and my multi-asset holdings from 3 to 2.

(Bonrepos, MATE seemed to be as volatile, if not more so, than the markets generally and was a small trust, whereas its objective is to be less volatile. So, I didn't see it as being as defensive as PNL or RICA, and it didn't hold things like TIPS or gold, that the latter hold.

European holdings: currently EAT and JEGI are both underwater, so no real opportunity to rationalise or reduce those holdings, though both offer respectable dividend yields, - greater than 4%.

I added MYI for its more defensive holdings, degree of EM exposure and its dividend yield.

Incidentally, BRSA (formerly BRNA) invests more in the value part of the US market (as opposed to growth/technology sectors) and when bought offered a 4%+ yield....

Otherwise I have sought to get most of my USA exposure through the likes of Brunner and Mid Wynd, and the Global G&I holdings, such as JGGI. I am currently watching/anticipating that the US growth and technology stocks may fall further as the FED implements further rate rises, and I am thus keeping my eyes open with a view to topping up that sector by way of either topping up Mid Wynd or possibly adding FCIT.

In the Global Growth sector, I like Brunner as it does have a dividend yield of c 2% as opposed to less than 1% in the case of Mid Wynd. FCIT has a yield of 1.55%

I also have STS in mind, now managed by Trojan, (in the global G&I sector) as it is more defensive having a higher than normal exposure to Consumer Defensives (c 44%).

[Parky]

Interesting to see your reasoning, but what are the performance statistics for the various sectors and overall? That's the only way we can see whether your reasoning was good?

[Avantegarde]

Why so many investments? Many years ago I was an elected trustee of my employer's huge pension scheme. Our investment advisers believed we did not need more than 12 different investments to gain the full value of diversification. You have far more than that. Are you not in danger if what some people call "diworsification"?

[Wuffle]

Thanks richfool,

interesting snapshot and background thoughts.

I couldn't justify that many holdings in my small pf, so I tend towards the broadest spread IT in the most of the categories that you outline. Then I dump a big holding of CMPI on top just to catch anything else of interest (it is an IT if 30ish ITs for anyone unfamiliar).

W.

[Dod101]

Why so many investments? Many years ago I was an elected trustee of my employer's huge pension scheme. Our investment advisers believed we did not need more than 12 different investments to gain the full value of diversification. You have far more than that. Are you not in danger if what some people call "diworsification"?

That is what I think as well. In fact some could argue that the OP is paying the manager's fees within each IT and then attempting to do their job for them, admittedly at a higher level than the managers themselves. And the holdings are of course ITs where many will each have more than a hundred holdings. Total? there will no doubt be some overlapping but even so there could easily be 2,500 or so separated holdings. Hence my comment about by a tracker.

Dod

[Itsallaguess]

PORTFOLIO CHANGES over the last 6 months:

DISPOSALS:

MATE - redirected funds into PNL and Ruffer (RICA).
SUPR (Supermarket Inc)
HFEL.(to stop the capital depreciation and reduce exp to China)

I'll politely refer the OP to my comments almost a year ago now, which I think are still relevant -

Have you considered that you've perhaps caught a mild dose of 'pickering'?

It's not something that's seen too much in the IT-related sphere, but some people may be more susceptible than others, all the same...

https://www.lemonfool.co.uk/viewtopic.php?f=8&t=13633&start=20#p428422

As others have said, it doesn't seem to make too much sense to pay such a high number of Investment Trust managers their management fees, and then still choose to carry out such a high level of ongoing portfolio management as well, and where an investor hopefully acknowledges their proclivity for active-management, then exposing themselves to the ongoing risk of it by holding so many granular IT's is unlikely to help with that...

Cheers,

Itsallaguess

[richfool]

Why so many investments? Many years ago I was an elected trustee of my employer's huge pension scheme. Our investment advisers believed we did not need more than 12 different investments to gain the full value of diversification. You have far more than that. Are you not in danger if what some people call "diworsification"?

That is what I think as well. In fact some could argue that the OP is paying the manager's fees within each IT and then attempting to do their job for them, admittedly at a higher level than the managers themselves. And the holdings are of course ITs where many will each have more than a hundred holdings. Total? there will no doubt be some overlapping but even so there could easily be 2,500 or so separated holdings. Hence my comment about by[b] a tracker.
[/b]
Dod

I thought we had done this one before.

A (single) tracker won't give me exposure to things like: commercial property, renewable energy, index-linkers like US TIPS, fixed interest, gold, infrastructure, private equity, or the wide range of alternative assets out there. (Note for example, LWDB holds an independent professional services business). If a global tracker did manage to "touch on" some of those, then there would only be a smidgeon of exposure. To gain that sort of broad exposure would bring one back to holding a significant number and range of trackers (significant plural), some quite specilaised, and in areas/asset classes where I wouldn't have the specialist knowledge to make decisions about adjusting asset allocation or even buying and selling, e.g. bonds. Thus, I pay a manager to do that for me, by holding actively managed IT's.

Also, as mentioned before, a tracker, at the current time, in falling markets, is only going to track the market down. So, why would I want to hold one (no answer required). And finally, as the is the Investment Trust (and OEIC) board, discussion of trackers would be "off board"!

[mc2fool]

A (single) tracker won't give me exposure to things like: commercial property, renewable energy, index-linkers like US TIPS, fixed interest, gold, infrastructure, private equity, or the wide range of alternative assets out there. (Note for example, LWDB holds an independent professional services business). If a global tracker did manage to "touch on" some of those, then there would only be a smidgeon of exposure. To gain that sort of broad exposure would bring one back to holding a significant number and range of trackers (significant plural), some quite specilaised, and in areas/asset classes where I wouldn't have the specialist knowledge to make decisions about adjusting asset allocation or even buying and selling, e.g. bonds. Thus, I pay a manager to do that for me, by holding actively managed IT's.

Also, as mentioned before, a tracker, at the current time, in falling markets, is only going to track the market down. So, why would I want to hold one (no answer required). And finally, as the is the Investment Trust (and OEIC) board, discussion of trackers would be "off board"!

Oh, a global tracker would give you exposure to those, as most are shares in their sectors, or ITs, that the tracker would pick up. Of course, as you say, it could be only a smidgeon of exposure and what you are really saying is that you want to "overweight" (relative to mkt cap) those assets. Whether that's a good thing to do or not I have no idea!

Could you post a list of just your sectors with the %age you hold in each? (Yeah, I could tot them up myself, but I'm assuming that you have it all in a spreadsheet and it's easy for you to do... )

[richfool]

I'll politely refer the OP to my comments almost a year ago now, which I think are still relevant -

Have you considered that you've perhaps caught a mild dose of 'pickering'?

It's not something that's seen too much in the IT-related sphere, but some people may be more susceptible than others, all the same...

viewtopic.php?f=8&t=13633&start=20#p428422

As others have said, it doesn't seem to make too much sense to pay such a high number of Investment Trust managers their management fees, and then still choose to carry out such a high level of ongoing portfolio management as well, and where an investor hopefully acknowledges their proclivity for active-management, then exposing themselves to the ongoing risk of it by holding so many granular IT's is unlikely to help with that...

Cheers,

Itsallaguess

I don't see what the difference is between holding one investment trust, or two or three, in any given sector, apart from the actual buying and selling costs (2 or 3 trades instead of one). fees. The management fees are a percentage of the holding, not a flat amount. I incur no platform fees.

Furthermore, as there is a risk of manager error/mis-timing/mistakes, it reduces "manager risk" by holding a couple of trusts in a given sector, run by different managers. How many here or, on the HYP board, hold two or more trusts or stocks in the same sector, (maybe PNL and RICA or CGT, or Shell & BP)? Another topic discussed before.

Also, whilst I may hold 2 or 3 trusts in a given sector, that may be because they target different parts of the sector, as in the case of EAT and JEGI - Europe and European smaller companies. Or one company specialising in wind energy and another in solar; or one specialising in the UK and another in Europe or the USA.

In some cases I am waiting to further prune my holdings, but am holding off as particular holdings in that sector are currently underwater, - e.g. Europe. A tracker doesn't take those steps for me. I am moving gradually towards holding mainly Global G or G&I trusts and have let go a country specific trust for that reason.

Yes, OK I may be guilty of a touch of pickering, but I don't see that as a major crime. (I enjoy and take an active interest in my holdings). In fact, it has enabled me to exit the likes of Scottish Mortgage, Monks, Pacific Horizons and USA, BEFORE the big falls in big tech and those trusts, (which a tracker wouldn't have done) and it enabled me to move into energy, renewables energy and defensives like PNL and RICA before (or as) they, the energy holdings, got their boost, arising from the Russian war in Ukraine.

(Also a tracker wouldn't have given me the 100%+ gain I obtained by buying into BERI at the right time).

[Dod101]

Why so many investments? Many years ago I was an elected trustee of my employer's huge pension scheme. Our investment advisers believed we did not need more than 12 different investments to gain the full value of diversification. You have far more than that. Are you not in danger if what some people call "diworsification"?

That is what I think as well. In fact some could argue that the OP is paying the manager's fees within each IT and then attempting to do their job for them, admittedly at a higher level than the managers themselves. And the holdings are of course ITs where many will each have more than a hundred holdings. Total? there will no doubt be some overlapping but even so there could easily be 2,500 or so separated holdings. Hence my comment about by[b] a tracker.
[/b]
Dod

I thought we had done this one before.

A (single) tracker won't give me exposure to things like: commercial property, renewable energy, index-linkers like US TIPS, fixed interest, gold, infrastructure, private equity, or the wide range of alternative assets out there. (Note for example, LWDB holds an independent professional services business). If a global tracker did manage to "touch on" some of those, then there would only be a smidgeon of exposure. To gain that sort of broad exposure would bring one back to holding a significant number and range of trackers (significant plural), some quite specilaised, and in areas/asset classes where I wouldn't have the specialist knowledge to make decisions about adjusting asset allocation or even buying and selling, e.g. bonds. Thus, I pay a manager to do that for me, by holding actively managed IT's.

Also, as mentioned before, a tracker, at the current time, in falling markets, is only going to track the market down. So, why would I want to hold one (no answer required). And finally, as the is the Investment Trust (and OEIC) board, discussion of trackers would be "off board"!

I am no advocate of trackers but this is a discussion Forum and it is pleasing that you are prepared to discuss. I just think that no one really needs to cover the entire world of investment, but anyway it is not my portfolio. It would be far too much hassle for me, but thanks for putting it up.

Be interesting though, to know the broad outcome. For instance are you up or down since 1/1/22, and over say the last 5 years?

Dod

[Itsallaguess]

I don't see what the difference is between holding one investment trust, or two or three, in any given sector, apart from the actual buying and selling costs (2 or 3 trades instead of one) fees.

Yes, OK I may be guilty of a touch of pickering, but I don't see that as a major crime. (I enjoy and take an active interest in my holdings). In fact, it has enabled me to exit the likes of Scottish Mortgage, Monks, Pacific Horizons and USA, BEFORE the big falls in big tech and those trusts, (which a tracker wouldn't have done) and it enabled me to move into energy, renewables energy and defensives like PNL and RICA before (or as) they, the energy holdings, got their boost, arising from the Russian war in Ukraine.

It wasn't really the costs I was mentioning the activity against - it was primarily to ask if there might be a correlation between someone perhaps tending towards 'over-activity' where they're naturally faced with an overly-large portfolio in terms of granular holdings, that's all...

You make a fair point regarding exiting the higher-growth IT's when you've done that, so it's clear that you're happy with how things are going.

I only replied earlier because when you mentioned selling out of three IT's in six months, I don't think I've made many more sales than that in six years, so it was the shared interest in IT's but a drastic difference in the LTBH aspect that I found interesting.

Cheers,

Itsallaguess

[richfool]

A (single) tracker won't give me exposure to things like: commercial property, renewable energy, index-linkers like US TIPS, fixed interest, gold, infrastructure, private equity, or the wide range of alternative assets out there. (Note for example, LWDB holds an independent professional services business). If a global tracker did manage to "touch on" some of those, then there would only be a smidgeon of exposure. To gain that sort of broad exposure would bring one back to holding a significant number and range of trackers (significant plural), some quite specilaised, and in areas/asset classes where I wouldn't have the specialist knowledge to make decisions about adjusting asset allocation or even buying and selling, e.g. bonds. Thus, I pay a manager to do that for me, by holding actively managed IT's.

Also, as mentioned before, a tracker, at the current time, in falling markets, is only going to track the market down. So, why would I want to hold one (no answer required). And finally, as the is the Investment Trust (and OEIC) board, discussion of trackers would be "off board"!

Oh, a global tracker would give you exposure to those, as most are shares in their sectors, or ITs, that the tracker would pick up. Of course, as you say, it could be only a smidgeon of exposure and what you are really saying is that you want to "overweight" (relative to mkt cap) those assets. Whether that's a good thing to do or not I have no idea!

Could you post a list of just your sectors with the %age you hold in each? (Yeah, I could tot them up myself, but I'm assuming that you have it all in a spreadsheet and it's easy for you to do... )

These are the percentages held in the various sectors, as from my spreadsheet earlier this last week:

UK GROWTH & INCOME TRUSTS: 9.4%

GLOBAL G&I IT's: 21.8%

GLOBAL GROWTH TRUSTS: 5.1%

GLOBAL MULTI-ASSET (Flexible) IT's: 6.4%

ASIAN PACIFIC INV TRUSTS: 6.7%

NORTH AMERICAN IT's: 12.1%

EUROPEAN INV TRUSTS: 6.9%

COMMERCIAL PROPERTY/REIT IT's: 9.4%

UTILITIES & INFRASTRUCTURE: 4.3%

RENEWABLES: 13.9%

RESOURCES/ENERGY/GOLD: 3.9% (BERI and BRWM)

Notes:
I. I would add that, as I see it, the renewable sector is overweight and I will likely reduce that sector as energy matters evolve.
2. I think it goes without saying that those sectors/categories don't take into account the fact that most of the main IT's have their own asset allocations to the various sectors, geographies, etc, and so give overlapping exposure. E.g. UK G&I trust will inevitably include energy and miners; most Global trusts hold the UK, US, Europe, Asian Pacific etc.
3. It's my current thinking to increase my US exposure, (when I think the market has bottomed or after a few more falls), but primarily by adding or increasing holdings that have a higher percentage exposure to the US, such as MWY or FCIT. I have recently added to Brunner partly for that reason.

[Wuffle]

As a fellow holder of MATE, could I just note that richfool has been mulling over whether to dispose of it for a few years.
The dedicated thread has been a do I, don't I saga for most of the 5 years that MATE has existed so he gave it a fair crack.

W.

[richfool]

I am no advocate of trackers but this is a discussion Forum and it is pleasing that you are prepared to discuss. I just think that no one really needs to cover the entire world of investment, but anyway it is not my portfolio. It would be far too much hassle for me, but thanks for putting it up.

Be interesting though, to know the broad outcome. For instance are you up or down since 1/1/22, and over say the last 5 years?

Whilst I have total valuation figures for previous years, it's difficult to give meaningful performance statistics, as until 2020 I was still adding ad hoc amounts of cash to the portfolio and reinvesting all dividends. Whereas from this year, I started having the dividends remitted to me.

The best I can offer you is:

Period 4/1/21 to 5/1/22 = +13% (1 year) (which will include dividends reinvested).
Period 5/1/22 to 6/6/22 = 0% change (shown as a matter of interest/coincidence)
Period: 5/1/22 to 14/7/22 = -7.5% (that negative figure, for this year, year to date, includes the fact that I withdrew all dividends received and took losses on a couple of holdings including Polymetal).
Period: 14/7/21 to 14/7/22 = 0% change (1 year) (note above comments).

I haven't unitised my portfolio.

Once I have made the final adjustments (increase global and USA exposure), my plan is to complete the move to being virtually totally "hands-off", which will mean that performance is easier to track and compare, and I can hopefully go off on my world trip.

[moorfield]

The main focus is income with diversity and some growth.

Out of interest, what is the overall portfolio yield ?

[richfool]

The main focus is income with diversity and some growth.

Out of interest, what is the overall portfolio yield ?

These are the historic yields, based on dividends received during the periods in question, and on the valuations at the end of those periods:

Year to 30/3/2022 = 3.75%

Year to 30/6/2022 = 4.17%

Note that during the covid pandemic period 2020-2021, I had moved more into growth stocks, and have only been reversing that trend and moving back into income producing trusts (including renewables) from late 2021 onwards.