Keep it simple or expand?

[spiderbill]

Having just sold VERX (Vanguard Euopean ex-UK) from my ETFs (an experiment which returned very little over 2.5 years) I'm swithering about what to do with the proceeds.
Initially I had thought to buy more VWRL, which has done far better, but now considering expanding my IT portfolio instead. ISA allowance is maxed out and too much more unsheltered income would see me over the dividend allowance, so looking at growth rather than income this time.

Had thought of adding to my FCIT holding since the constituents are broadly similar to VWRL and the returns have been very close over a similar period, but then started wondering about something more adverturous such as Scottish Mortgage, Monks, or Polar Capital Technology.

Still feeling my way in ITs and want to make sure I don't end up with a mish-mash. Would welcome thoughts on sticking to what I have or expanding into new areas. Am I missing anything?

Current IT portfolio

HFEL   29%
MYI   10%
FCIT   15%
MRCH   23%
BRNA   11%
JPGI   12%

I have much larger HYP and OEIC investments so this is a relatively small amount but can forsee moving in future more into ITs and want to learn as much as I can before that stage.

TIA
Spiderbill

[midgesgalore]

Hi Spiderbill

Two out-and-out growth constituents of my IT portfolio are
SSON, smithson, up 35% since launch Oct 2018. Pays no dividend
USA, Baillie Gifford US Growth, up just under 60% since launch in March 2018. Pays no dividend

I don't know or care where they are with respect to premium / discount although I cannot imagine either will be in discount. Check the AIC site for more details to start with.


The rest:
ASLI
BRSC
FCIT
FGT
HFEL
JAM
JFJ
MRCH
MYI
ORIT
SLI
SMT
WTAN
7 of them will pay a small dividend however ASLI, HFEL, MRCH, MYI, ORIT, SLI were bought for yield, 4% or greater promised

midgesgalore

[midgesgalore]

As it would be little further effort the IT only portfolio (not including REITS - in my HYP portfolio)

EPIC Value % Total

ASLI 6.93
BRSC 5.84
FCIT 6.13
FGT 6.31
HFEL 8.49
JAM 5.38
JFJ 5.25
MRCH 5.99
MYI 7.93
ORIT 3.66
SLI 6.64
SMT 8.02
SSON 8.48
USA 8.55
WTAN 6.39

100.00

Sorry about the formatting, wanted to make it quick.

midgesgalore

[Wuffle]

I have lots of cash to deploy also (for me) and have been generating an array of graphs while I decide what to buy.
USA, which has been going up in whatever format you choose to buy it in (ETF or IT) but which looks dear currently, or anything else which has chugged along at a more respectable pace (and looks far less impressive on a graph) but seems to be priced more reasonably.
Through which action I note that MYI and HFEL don't appear to have done much different to WERX.
How come you singled out WERX?
No criticism as I have found myself bouncing likely candidates around and got nowhere so far and to be honest I am as much fishing for good sense.

W.

[TUK020]

Having just sold VERX (Vanguard Euopean ex-UK) from my ETFs (an experiment which returned very little over 2.5 years) I'm swithering about what to do with the proceeds.
Spiderbill

Hi Spiderbill,
something you said above that got me pondering............what sort of timescale do you think is suitable to let an experiment like this run, and why?
serious question, not meaning to be awkward (though it does seem to come naturally!)
tuk020

[spiderbill]

Two out-and-out growth constituents of my IT portfolio are
SSON, smithson, up 35% since launch Oct 2018. Pays no dividend
USA, Baillie Gifford US Growth, up just under 60% since launch in March 2018. Pays no dividend

Thanks for those two suggestions midgesgalore. I'd rather forgotten about Smithson after reading a few posts around the launch time. I'd decided to leave it alone until the dust had settled and it could be evaluated on performance rather than opinions of the founder, but then got distracted by other things. Will take a look now.
Baillie Gifford US Growth has been on my radar up to now - I'll add it to the watch list and do some research.

Will also look over your other mentions too.

On reflection my original post wasn't as clear as it might have been in terms of what I was looking for, although your suggestions are more than welcome. One of the questions I was feeling towards was basically, does it make sense to mix income and growth ITs in the same portfolio like this, or should I be separating them (even if only on paper) so that I have definite goals for each and can think clearly without trying to artificially "balance" them.

much obliged

Spiderbill

[spiderbill]

I have lots of cash to deploy also (for me) and have been generating an array of graphs while I decide what to buy.
USA, which has been going up in whatever format you choose to buy it in (ETF or IT) but which looks dear currently, or anything else which has chugged along at a more respectable pace (and looks far less impressive on a graph) but seems to be priced more reasonably.
Through which action I note that MYI and HFEL don't appear to have done much different to WERX.
How come you singled out WERX?
No criticism as I have found myself bouncing likely candidates around and got nowhere so far and to be honest I am as much fishing for good sense.

Hi Wuffle

MYI and HFEL have been a bit of a rollercoaster the last two or three years (I bought in Sept and Nov 2017) and the recent coronavirus issue has put them under my buying price again by about 6%, but they have good dividends, particularly the latter, and that's basically what they were bought for, although some capital increase would have been nice too. They were my first forays into ITs and something of an experiment too, as well as an attempt to get more far east exposure compared to my rather UK-centric HYP. I felt I had to have some skin in the game in order to learn from them properly.

VERX was bought around the same time along with VWRL in order to compare how a lower dividend, more tracker-style investment would stack up against the ITs.
VWRL, which is obviously global, has done well - up 22% over the same period, but VERX, which was in turn an attempt to get some European exposure, has been underwater for most of that time and only recently crept back into positive territory. While it does have a slightly better dividend - around 2.8% against VWRL's 1.9% - it's still been a relative failure. Another thing being that the dividends are paid in Euros which is a bit messy.

As I'm doing a bit of housekeeping at the moment for other reasons, I felt it was time to drop VERX and try something else - either putting it into more VWRL or into ITs, which is what promoted this thread.

What period were your graph comparisons over? Presumably a different one than mine.

Incidentally for comparison, FCIT, which was bought about 5 month later, is up 19%

cheers
Spiderbill

[midgesgalore]

Two out-and-out growth constituents of my IT portfolio are
SSON, smithson, up 35% since launch Oct 2018. Pays no dividend
USA, Baillie Gifford US Growth, up just under 60% since launch in March 2018. Pays no dividend

Thanks for those two suggestions midgesgalore. I'd rather forgotten about Smithson after reading a few posts around the launch time. I'd decided to leave it alone until the dust had settled and it could be evaluated on performance rather than opinions of the founder, but then got distracted by other things. Will take a look now.
Baillie Gifford US Growth has been on my radar up to now - I'll add it to the watch list and do some research.

Will also look over your other mentions too.

On reflection my original post wasn't as clear as it might have been in terms of what I was looking for, although your suggestions are more than welcome. One of the questions I was feeling towards was basically, does it make sense to mix income and growth ITs in the same portfolio like this, or should I be separating them (even if only on paper) so that I have definite goals for each and can think clearly without trying to artificially "balance" them.

much obliged

Spiderbill

OK I get you now. My IT goal is invest in ITs primarily for the growth element and a useful dividend. There are no hang-ups about mixing growth, yield, etc in my list of ITs.
Living off dividends only is beyond the focus of my IT portfolio (I have a HYP for that with lower growth and bigger dividends) so my tack is to have an eclectic mix of ITs:

Income focus ITs (but less capital growth)
Growth ITs in regions or sectors where I believe this is believable or achievable
Mixture of almost dependable growth and income like FCIT, Witan, JAM (JP Morgan American) with an international edge, FGT which is UK-centric

That kind of idea.
This way I get a reasonable spread of income & growth investments locally and similarly across some international markets.
No doubt there is a cheaper or smarter way of doing it and I am no expert but try to pick up on the discussion hereabouts to improve my investment performance. My main driver is do something rather than keep money and wait forever.
Who is right or wrong? Even the great John Barron includes Scottish Mortgage IT in his income portfolio despite the 0.48% trailing yield

midgesgalore

[spiderbill]

something you said above that got me pondering............what sort of timescale do you think is suitable to let an experiment like this run, and why?
serious question, not meaning to be awkward (though it does seem to come naturally!)
tuk020

Hi tuk020
I didn't really set a time period at the beginning, just let it run and watched. But I'd been disappointed in VERX during that time and felt it had had enough of a chance and it was time to try something else once it finally broke even. I was disappointed that predictions of improvements in European economic performance hadn't translated through to a better result.
A longer test would be nice but hey, life is short and I'm now 64, so it can't last too long.

FCIT has done well so far and MCRH , first bought in Oct 18, has put on 14% with a 4.7% divi. Encouraging so far.
Too soon to judge BRNA or JPGI, which were only bought last Autumn, but they have modest gains so far.

cheers
Spiderbill

[Wuffle]

Spiderbill,
I tend towards total return plots which I access through the 'funds' bit of Hargreaves Lansdown website. Conveniently the geographical spreads are available also. You can add shares and ITs to the plots.
After looking at a quite a few it starts to become apparent that USA concentrations are the overriding factor in performance, Fangs in particular.
Lots of other stuff ends up in about the same sort of band which should not be a surprise if you believe in market efficiency.
W.

[fca2019]

Alternative view to above. FCIT yield only 1.5%, go over the divi allowance and tax 32.5%. 32.5% on 1.5% not going to be much. Or could use spouse/partner ISA allowance if married, now and 6 April if not used up already.

[spiderbill]

OK I get you now. My IT goal is invest in ITs primarily for the growth element and a useful dividend. There are no hang-ups about mixing growth, yield, etc in my list of ITs.

Thanks for the follow up. And nice to know I'm not alone with my approach so far.

Living off dividends only is beyond the focus of my IT portfolio (I have a HYP for that with lower growth and bigger dividends) so my tack is to have an eclectic mix of ITs:

Income focus ITs (but less capital growth)
Growth ITs in regions or sectors where I believe this is believable or achievable
Mixture of almost dependable growth and income like FCIT, Witan, JAM (JP Morgan American) with an international edge, FGT which is UK-centric

Nicely summarised and categorised.
I'm researching their top holdings at the moment, so I get a feel for what they're doing and what overlaps there might be.

This way I get a reasonable spread of income & growth investments locally and similarly across some international markets.

Who is right or wrong? Even the great John Barron includes Scottish Mortgage IT in his income portfolio despite the 0.48% trailing yield

Seems a sound overall strategy and avoids an "either/or" polarisation.
On the final point that seems to stretching the concept of income a little but but is maybe a pointer that rigid thinking is to be avoided.

Thanks again
Spiderbill

[spiderbill]

Alternative view to above. FCIT yield only 1.5%, go over the divi allowance and tax 32.5%. 32.5% on 1.5% not going to be much. Or could use spouse/partner ISA allowance if married, now and 6 April if not used up already.

FCIT is certainly the simple option and you can't really go too far wrong with them. I suppose it depends whether I'm feeling in an adventurous mood and willing to bet on the US markets continuing to grow. Since we seem to still have the virus scare again today there may be some bargains to be had over the next few days, so I'll try and do some more research now.

Thanks
Spiderbill

[Dumbo]

Keep it simple.

Your IT portfolio looks fine to me.

[OllyDrod]

Still feeling my way in ITs and want to make sure I don't end up with a mish-mash. Would welcome thoughts on sticking to what I have or expanding into new areas. Am I missing anything?

Current IT portfolio

HFEL   29%
MYI   10%
FCIT   15%
MRCH   23%
BRNA   11%
JPGI   12%

Looks like a nice blend to me. Only observation would be that they're all primarily focused on equities, so you've no real asset diversification. I might look at introducing some bond-focused ITs, or perhaps taking a look at some of the 'alternative' trusts out there (eg: 'thematics' focusing on BioTech, Venture Capital, Infrastructure, Aircraft leasing, Music, etc). The IT structure is your friend here and opens the door to investing in less liquid asset classes when compared to open-ended funds. If you've maxed out your ISA allowance, I believe there are tax breaks to be had via VCTs and EIS (but tread carefully and definitely speak to an IFA before taking the plunge!)

- OllyDrod

[spiderbill]

Looks like a nice blend to me. Only observation would be that they're all primarily focused on equities, so you've no real asset diversification. I might look at introducing some bond-focused ITs, or perhaps taking a look at some of the 'alternative' trusts out there (eg: 'thematics' focusing on BioTech, Venture Capital, Infrastructure, Aircraft leasing, Music, etc). The IT structure is your friend here and opens the door to investing in less liquid asset classes when compared to open-ended funds. If you've maxed out your ISA allowance, I believe there are tax breaks to be had via VCTs and EIS (but tread carefully and definitely speak to an IFA before taking the plunge!)

- OllyDrod

That's an interesting perspective OllyDrod, and given the rest of my investments, excluding property, are also primarily in equities it does give me pause for thought on assets in general.
Probably not for this particular decision but for longer term strategy I'll certainly have a think about that and do some research on it.
Many thanks for your contribution.

Spiderbill

[spiderbill]

Keep it simple.

Your IT portfolio looks fine to me.

Thanks Dumbo, I'm edging that way on this decision.
There is another one coming up when I get the money from the takeover of Hansteen, but that one is ISA sheltered so there is more scope for income-related options.

cheers
Spiderbill

[OllyDrod]

That's an interesting perspective OllyDrod, and given the rest of my investments, excluding property, are also primarily in equities it does give me pause for thought on assets in general.
Probably not for this particular decision but for longer term strategy I'll certainly have a think about that and do some research on it.
Many thanks for your contribution.

Spiderbill

Pleasure. Asset allocation has been weighing on my mind - more so as the number of voices forecasting the end of the bull market increases. Whether I've got it right is another matter entirely... Come back and let us know what you decide to do.

Re: research, one of the best resources I've found for ITs is the excellent (and free) Investors Chronicle podcast. Their Friday edition is on personal finance and maybe 1 in 4 has some IT content. Among the most insightful are the interviews with managers - especially managers of funds-of-funds / funds-of-trusts (eg: Miton Global Opportunities, Unicorn MasterTrust). Only downside is the presenter's voice ("oookaaay" - you'll know when you hear it). I spent a long journey a while back going through the archive and saving the IT episodes. Great resource to dip in and out of on the commute.

You're absolutely right - I should get out more.

- OllyDrod

[Itsallaguess]

Re: research, one of the best resources I've found for ITs is the excellent (and free) Investors Chronicle podcast. Their Friday edition is on personal finance and maybe 1 in 4 has some IT content.

Among the most insightful are the interviews with managers - especially managers of funds-of-funds / funds-of-trusts (eg: Miton Global Opportunities, Unicorn MasterTrust). Only downside is the presenter's voice ("oookaaay" - you'll know when you hear it).

I spent a long journey a while back going through the archive and saving the IT episodes. Great resource to dip in and out of on the commute.

Thanks - those podcasts sound interesting, and I wasn't aware that they were freely available on the Investors Chronicle website, without registration being required.

Link here for anyone interested - https://www.investorschronicle.co.uk/podcasts/

Cheers,

Itsallaguess

[OllyDrod]

Also available via apple podcasts (free app) and presumably on the Android equivalent(s)
I wonder if it's worth starting a thread on IT-specific resources? Haven't seen an existing one and there's some good material out there

- OllyDrod