IUKD for AEI

[yieldhog]

I've sold my IUKD and invested the funds in AEI. I held IUKD several years ago and eventually sold out because I was disappointed with the yield I was getting. Recent dividends have also been disappointing, bearing in mind all of the outstandingly high dividends on offer from decent FTSE 100 companies ( e.g. L&G, IMB, BATS, M&G etc). I bought AEI on an 8%
yield and small discount. Gearing is a bit high for my liking but with good security backing it shouldn't be too much of a worry.

Does anyone know of any other UK equity income funds that offerthis sort of value?

Y

[Arborbridge]

I've sold my IUKD and invested the funds in AEI. I held IUKD several years ago and eventually sold out because I was disappointed with the yield I was getting. Recent dividends have also been disappointing, bearing in mind all of the outstandingly high dividends on offer from decent FTSE 100 companies ( e.g. L&G, IMB, BATS, M&G etc). I bought AEI on an 8%
yield and small discount. Gearing is a bit high for my liking but with good security backing it shouldn't be too much of a worry.

Does anyone know of any other UK equity income funds that offerthis sort of value?

Y

Did you mean value or yield?

I had IUKD for a while and also gave it up. After a couple of phone calls to them about the dividend payments, they confessed that they do not necessarily payout a regularly calculated amount, but it depends on instruction from the marketing department. Sometime they prefer the capital side to look good and reduce the payout to help it.

Arb.

[yieldhog]

Did you mean value or yield?

Both. Yield is easy enough to find but finding value at a reasonable risk is harder.

Y

[moorfield]

I've sold my IUKD and invested the funds in AEI. I held IUKD several years ago and eventually sold out because I was disappointed with the yield I was getting. Recent dividends have also been disappointing, bearing in mind all of the outstandingly high dividends on offer from decent FTSE 100 companies ( e.g. L&G, IMB, BATS, M&G etc). I bought AEI on an 8%
yield and small discount. Gearing is a bit high for my liking but with good security backing it shouldn't be too much of a worry.

Does anyone know of any other UK equity income funds that offerthis sort of value?

Y

CHI
HHI

[Arborbridge]

I've sold my IUKD and invested the funds in AEI. I held IUKD several years ago and eventually sold out because I was disappointed with the yield I was getting. Recent dividends have also been disappointing, bearing in mind all of the outstandingly high dividends on offer from decent FTSE 100 companies ( e.g. L&G, IMB, BATS, M&G etc). I bought AEI on an 8%
yield and small discount. Gearing is a bit high for my liking but with good security backing it shouldn't be too much of a worry.

Does anyone know of any other UK equity income funds that offerthis sort of value?

Y

CHI
HHI

Maybe I'm wasting my time running a HYP

[moorfield]

Maybe I'm wasting my time running a HYP

Ding. That's the sound of a penny dropping, folks.

[monabri]

Maybe I'm wasting my time running a HYP

Ding. That's the sound of a penny dropping, folks.

Shush...I think you got away with it!

[Dod101]

If people would use names of shares in full that would help a lot for my understanding of what is being discussed.

Dod

[Arborbridge]

If people would use names of shares in full that would help a lot for my understanding of what is being discussed.

Dod

Particularly so, with a huge list of unfamiliar ones. I get the impression that this guy isn't interested in discusson, though. We aren't even allowed to know how he chooses shares - we just have to accept them on his say-so.

I'm wondering if it was all just a wind-up.

Arb.

[EthicsGradient]

If people would use names of shares in full that would help a lot for my understanding of what is being discussed.

Dod

I did wonder if referring to abrdn Equity Income with an initialism made just from capitalised vowels was a form of protest at the manager's moniker.

[Arborbridge]

Maybe I'm wasting my time running a HYP

Ding. That's the sound of a penny dropping, folks.

My goodness - you are a bit late with that one. I expect you've been following my narrative, and it's pretty obvious that I've been investing proportionally more in ITs for least several years. Not that I have abandoned my HYP, nor am likely to anytime soon, but the fact that over years my ratio of HYP:ITs has changed from around 2:1 to the current 1.2:1 tells an obvious tale. You will also no doubt have seen my income charts which show one reason I've been changing the distribution of capital.

So, no surprise.

[yieldhog]

[align=][/align]moorfield suggested CHI and HHI. Thank you for these.
I'm familiar with HHI but not so much with CHI.

HHI currently yields 6.79% but has 24% gearing. I'm not so keen on highly geared funds.
CHI is a relatively small fund with a yield of 6.76% and 14% gearing.

What I can't really understand is why funds like HHI only yield 6.79% when there are so many opportunities for stocks yielding 10% or more, especially when the funds brief covers more than just the FTSE 100. Okay, the management fee takes out 1.44% but with gearing that should still leave plenty of opportunity for dividend payouts of 9% or more.

Y

[richfool]

Shires might worth looking at if yield is your priority, though different sectors and holdings to AEI. (plus some smaller coy and Fixed Int holdings).

Or EDIN for better quality lower yielding holdings.

I hold both, plus DIG and LWDB in UK sector.

[SalvorHardin]

If people would use names of shares in full that would help a lot for my understanding of what is being discussed.

I thought it was a bit odd that a NASDAQ listed small cap property manager, which doesn't pay a dividend, was being suggested as a replacement.

AEI is the NASDAQ ticker for Alset Inc.

https://seekingalpha.com/symbol/AEI

[Julian]

Ding. That's the sound of a penny dropping, folks.

My goodness - you are a bit late with that one. I expect you've been following my narrative, and it's pretty obvious that I've been investing proportionally more in ITs for least several years. Not that I have abandoned my HYP, nor am likely to anytime soon, but the fact that over years my ratio of HYP:ITs has changed from around 2:1 to the current 1.2:1 tells an obvious tale. You will also no doubt have seen my income charts which show one reason I've been changing the distribution of capital.

So, no surprise.

I've been on a similar journey Arb. Back in 2001 I started off all-in on an individual-share(*) HPY. I started adding ITs alongside my HYP towards the end of the 2000s (2009?) and didn't buy any additional shares for my HYP from that point onwards preferring instead to put all new investments into income ITs.

Off topic for this group but for context I'm actually now well into the next stage of my journey. I now only invest new money into passive trackers and any sales I make each year to top up income and to release cash to transfer into my ISA and SIPP comes (for now) exclusively from my individual-share HYP so, albeit slowly, I am actively dismantling my individual-share HYP now.

By the time I get to the last decade of my life (not that I can ever know when that will start but I use a rough estimate based on parent's ages of death) I suspect that I won't actively dismantle my income IT holding in favour of 100% passives but will instead have a mix of a baseline income from my income ITs topped up by annual top-slicing of my trackers. Alternatively if/when I feel particularly frail and vulnerable and want to have as much income certainty as possible, maybe because I need care, I might release some or all of my tracker capital value to buy an annuity - which pretty much by definition since I said that would be when I felt frail and vulnerable - would hopefully lock in a pretty high percentage income per £100K spent.

- Julian

(*) Hopefully obvious what I mean but I mean an HYP consisting of direct holdings in trading companies - Astra Zeneca, Shell, Vodafone and all the other favourites at whatever time I was making purchases.

[yieldhog]

Shires might worth looking at if yield is your priority, though different sectors and holdings to AEI. (plus some smaller coy and Fixed Int holdings).

Or EDIN for better quality lower yielding holdings.

I hold both, plus DIG and LWDB in UK sector.

Thanks richfool.

I held SHRS for several years but sold as part of my portfolio simplifying. It's a good fund to buy at current levels with good quality,decent yield of 6.73% and a discount of almost 12%. I think I took a profit at around 260+ so probably a bit of upside with interest rates falling and maybe some general market recovery.
DIG ,EDIN, and LWDB all seem a bit of a muchness, all fishing in the same pool and tweaking here and there.

Happy investing.

Y

[PrefInvestor]

I've sold my IUKD and invested the funds in AEI. I held IUKD several years ago and eventually sold out because I was disappointed with the yield I was getting. Recent dividends have also been disappointing, bearing in mind all of the outstandingly high dividends on offer from decent FTSE 100 companies ( e.g. L&G, IMB, BATS, M&G etc). I bought AEI on an 8%
yield and small discount. Gearing is a bit high for my liking but with good security backing it shouldn't be too much of a worry.

Does anyone know of any other UK equity income funds that offerthis sort of value?

Y

Anyone invested in IUKD might find the following article of interest:-

https://monevator.com/can-etfs-dependab ... -part-one/

It’s an old article but seems still relevant as far as I can see, as iShares don’t appear to have changed their stock selection mechanism ?. As per their current factsheet this mechanism would still seem to be picking the highest yielding 50 stocks from the FTSE 250 every 6 months with zero regard for any other stock selection considerations. Personally I consider this a very poor/risky approach, but perhaps that’s just me ?.

IUKD is down ~3.6% YTD as I write this from what I can see, whereas the FTSE 100 is only down ~2% YTD as of today. So not exactly great performance.

I’m not impressed with AEI either myself (or indeed ANY Aberdeen trusts TBH) down ~9% YTD. Lets face it some high yielding investments are just value traps (eg VOD, ABDN, HFEL for example) and need to be avoided IMHO. In fact a really high yield is very often a warning sign that the investment is a value trap.

Personally I like CTY and MRCH for UK Equity Income myself, yields are lower but total return is better. Check out a total return comparison chart over 3-5 years to see the difference.

But each to their own obviously. DYOR etc.

ATB

Pref

[yieldhog]

I've sold my IUKD and invested the funds in AEI. I held IUKD several years ago and eventually sold out because I was disappointed with the yield I was getting. Recent dividends have also been disappointing, bearing in mind all of the outstandingly high dividends on offer from decent FTSE 100 companies ( e.g. L&G, IMB, BATS, M&G etc). I bought AEI on an 8%
yield and small discount. Gearing is a bit high for my liking but with good security backing it shouldn't be too much of a worry.

Does anyone know of any other UK equity income funds that offerthis sort of value?

Y

Anyone invested in IUKD might find the following article of interest:-

https://monevator.com/can-etfs-dependab ... -part-one/

It’s an old article but seems still relevant as far as I can see, as iShares don’t appear to have changed their stock selection mechanism ?. As per their current factsheet this mechanism would still seem to be picking the highest yielding 50 stocks from the FTSE 250 every 6 months with zero regard for any other stock selection considerations. Personally I consider this a very poor/risky approach, but perhaps that’s just me ?.

IUKD is down ~3.6% YTD as I write this from what I can see, whereas the FTSE 100 is only down ~2% YTD as of today. So not exactly great performance.

I’m not impressed with AEI either myself (or indeed ANY Aberdeen trusts TBH) down ~9% YTD. Lets face it some high yielding investments are just value traps (eg VOD, ABDN, HFEL for example) and need to be avoided IMHO. In fact a really high yield is very often a warning sign that the investment is a value trap.

Personally I like CTY and MRCH for UK Equity Income myself, yields are lower but total return is better. Check out a total return comparison chart over 3-5 years to see the difference.

But each to their own obviously. DYOR etc.

ATB

Pref

Fair comment, especially "each to their own". As I've said many times, we need to see things in their proper context. What works for a forty year old with many years to go to retirement may not be suitable for an older person with completely different objectives.
I'm a 76 year-old and have been retired for more than 15-years. I took my tax-free cash out of my SIPP at the time I retired and set up a monthly drawdown. My focus for the SIPP is sustainable income generation with some growth in real terms. Over the last 15-Years this has been achieved. Last year the dividend yield on my SIPP was 7.47%, Total Return was 13.04% and if you take into account inflation of 4%, 2023 Total Real Return was 9.04%. My overall objectives were achieved and have been for the past 15-years.
Regarding specific funds, I own MRCH in an ISA and am happy with that and CTY has been on my radar for several years but as yet I have not bought any.
As I mentioned earlier in this thread, one of the reasons for sarting this thread was to try to get some ideas for alternatives to AEI, as, like you, I'm not a great fan of Aberdeen funds. My main point was that there do not seem to be any alternatives out there if yo are looking for yields over 8% and some growth potential.

Thanks for your comments.

Y

[stacker512]

If people would use names of shares in full that would help a lot for my understanding of what is being discussed.

True I agree. However, it also doesn't take much effort to look it up, double-click on the ticker, right click google search and then prepend "hl" to it, it generally works.

Otherwise, we start typing up "CT UK High Income Trust plc (CHI) Ordinary 0.1p Shares (GB00B1N4G299) on the London Stock Exchange", which is far too verbose (and still doesn't tell us much about the composition or the sector).

[daveh]

I've sold my IUKD and invested the funds in AEI. I held IUKD several years ago and eventually sold out because I was disappointed with the yield I was getting. Recent dividends have also been disappointing, bearing in mind all of the outstandingly high dividends on offer from decent FTSE 100 companies ( e.g. L&G, IMB, BATS, M&G etc). I bought AEI on an 8%
yield and small discount. Gearing is a bit high for my liking but with good security backing it shouldn't be too much of a worry.

Does anyone know of any other UK equity income funds that offerthis sort of value?

Y

Anyone invested in IUKD might find the following article of interest:-

https://monevator.com/can-etfs-dependab ... -part-one/

It’s an old article but seems still relevant as far as I can see, as iShares don’t appear to have changed their stock selection mechanism ?. As per their current factsheet this mechanism would still seem to be picking the highest yielding 50 stocks from the FTSE 250 every 6 months with zero regard for any other stock selection considerations. Personally I consider this a very poor/risky approach, but perhaps that’s just me ?.

IUKD is down ~3.6% YTD as I write this from what I can see, whereas the FTSE 100 is only down ~2% YTD as of today. So not exactly great performance.

I’m not impressed with AEI either myself (or indeed ANY Aberdeen trusts TBH) down ~9% YTD. Lets face it some high yielding investments are just value traps (eg VOD, ABDN, HFEL for example) and need to be avoided IMHO. In fact a really high yield is very often a warning sign that the investment is a value trap.

Personally I like CTY and MRCH for UK Equity Income myself, yields are lower but total return is better. Check out a total return comparison chart over 3-5 years to see the difference.

But each to their own obviously. DYOR etc.

ATB

Pref

My HYPish portfolio (which contains a number of your value traps, eg VOD and HFEL) is only down 1.44% YTD.

I just put MRCH, CTY, MUT, HFEL into HL's site on their interactive graph function with SMT as a growth comparator. YTD HFEL is in second place behind SMT and MRCH, CTY and MUT are all lagging. Long term though HFEL's performance has been atrocious, but has plateaued recently. Maybe the change in manager and the suggestion that the fund is not going to chase yields to the same extent is leading to an improved capital performance going forward.