Investment Trusts or Unit Trusts

Rollinghome

opinions4u wrote: »

Very simiilar beasts. Which makes cost of access a key deciding factor for an investor able to make his/her own decision.

Well thanks for that interesting contribution, even though I wouldn't agree.

moneedope

Rollinghome, ignoring the childish interuptions to an excellent thread, are there any investment trusts you or anyone else would particularly recommend to a newbie?

opinions4u

moneedope wrote: »

Rollinghome, ignoring the childish interuptions to an excellent thread

I'm sorry you thought my contribution childish.

First of all I think it's cheap of FSA Spokeswoman / Government minister to take a dig at the McDonalds shiftworker. It's an offensive swipe that isn't needed - doubtless the FSA lady has a very good Media Studies degree.

Secondly, the FSA have been the regulators who oversee the IFA population of this country for many years. They have also been the body responsible for regulating banking (which they clearly did so well).

They have allowed the structures that currently exist for IFAs to be classed as fit for business. They have built in many of the restrictions that exist around IFAs. Any faults that are highlighted now are faults that they've been happy to ignore for years.

Now I hope you enjoy the rest of the thread. I'm sure you'll find it far more interesting now that I'm taking no further part in the debate.

jimjames

I find it very strange that IFAs are not permitted to recommend what could be one of the most suitable investments for long term investors - but hey ho!

The schemes I would suggest are worth investigating for their charges and performance are Aberdeen and Fidelity. Both only charge stamp duty on purchases which start at £30 for the Aberdeen childrens scheme and £50 for Fidelity. For a monthly saving of £30 thats only 15p - some bargain in my view. Aberdeen have some excellent far east trusts like New Dawn, I've been investing in that for over 10 years and it has performed excellently.

dunstonh

Instead of being abusive and turning it into into another flag-waving job for your trade, if you went off and learned something about investments that don't bribe you with sales commissions you could then make a useful contribution to the thread. Until you learn something about investments such as ITs the value of your advice will be limited.

How many times have you been banned from this board now? Twice isnt it?.

So, accusing me of abuse is a joke. Its already clear you have chosen to ignore facts on this thread and others. I just feel sorry for the mugs that believe what you say.

IFAs have fought hard to prevent the new requirements of the RDR being implemented and had pinned their hopes on a change of government.

Please provide me evidence of where 30,000 IFAs have fought hard against it. A significant minority have. You cant blame many of them either. If you were in your 50s or 60s having done the job for 20-30 years to then be told you need to sit more exams, you would be pretty fed up about that.

Until you learn something about investments such as ITs the value of your advice will be limited.

Ignoring for the moment that the board is just a virtual world where advice and standards dont matter, in real life I have qualifications that state I know about them. You have no such qualification. You just have an anti IFA bias and a complete ignorance of the facts along with selected copy and pasting that has got you into trouble on this board a number of times in past.

I find it very strange that IFAs are not permitted to recommend what could be one of the most suitable investments for long term investors - but hey ho!

packaged ITs can be but previously, ITs fell under the remit of a stockbroker.

Rollinghome

moneedope wrote: »

Rollinghome, ignoring the childish interuptions to an excellent thread, are there any investment trusts you or anyone else would particularly recommend to a newbie?

Well I hope the interruptions were equally illuminating.

That sort of aggression probably isn’t so untypical of many former salesmen acting as IFAs, as most are. Presumably his customers get the same treatment if they get on the wrong side of him. Probably highly embarrassing for IFAs who would prefer a better public image though most commission based IFAs will have similarly little interest or knowledge of any investments that don’t offer them sales commission.

What the Finance Secretary to the Treasury Mark Hoban said was:

“The current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonald’s. The products that are being sold by IFAs are infinitely more complex and long lasting in their effects than a Big Mac.”

The remark by was entirely factual and accurate. IFAs require no educational qualifications and the required vocational training is of the NVQ level described.

Which is why the FSA, the last government and this current government all want the abolition of direct sales commission that leads to biased advice and higher qualifications. As do most independent commentators. The daffy and irrelevant comments about Hoban ignore that, as it happens, he attended the LSE, acquired a degree in economics, and qualified as a chartered accountant.

As to which ITs, it very much depends on your circumstances and any other investments you already have. Larger ITs in the Global Growth sector are often a good starting point and it’s a sector where there are still some good discounts. They range from the very staid and safe to the more high-risk and aggressive. The low risk ones will have low borrowings and concentrate on developed markets. Those with higher risk have higher borrowings and more investment in emerging markets and more speculative stocks.

Concentrate both on the NAV performance and the share price. I’d always favour stocks with a good discount unless there was good reason to do otherwise. Premiums on stocks in fashionable sectors can quickly vanish. Check out the suggestions by Jim and the many ITs with savings plans that allow drip-feeding.

Or you also might want to at least look at splits. They’re shares offered with different classes each conferring different rights to the profits. Zeros pay no dividends but a specified capital gain on a specific date. They’re considered very safe and make good use of CGT allowances and often suggested to fund something like university fees for children. Income shares (usually) have entitlement to all the income so of interest to non-tax payers and Capital shares carry the highest risk but are entitled to everything else. There can be several additional classes. It’s an area where you need to understand what you’re buying.

So the choice is yours. You can get details of performance at www.trustnet.co.uk etc. and other details at www.theaic.co.uk. Motley Fool is probably as good as anywhere for opinions on stocks from other investors.

bigfreddiel

Rollinghome wrote: »

Well I hope the interruptions were equally illuminating.....

cheers rollinghome - very sweetly put
fj

dougz_2

I am thinking there could be a few hidden risks with an IT in disadvantage to UT:
1) There could be an additional performance risk with ITs that is not immediately apparent where they use the ability to leverage using debt.
2) The IT might wind up at a date inconvenient for you to have to decide what to reinvest it all into next.
3) I have the impression that UTs seem to keep bid/offer prices fairly consistantly close, whereas with ITs the bid/offer prices seem to get unpleasantly wide in certain cases, presumably because liquidity is low, similar to what can happen with less liquid individual shares.
Comments welcome.

Thrugelmir

dougz wrote: »

3) I have the impression that UTs seem to keep bid/offer prices fairly consistantly close, whereas with ITs the bid/offer prices seem to get unpleasantly wide in certain cases, presumably because liquidity is low, similar to what can happen with less liquid individual shares.
Comments welcome.

Firstly I must sat that I've been a fan of IT's for 25 years. I primarily hold IT's in my SIPP.

However the issue of discounts/premiums is one that has to be monitored closely. IT's are quotes shares on the exchanges. So like any other traded share. Market makers set the buying\selling price.

Many IT's shares are held by pension funds, insurance companies and fund managers themselves (fund of investment trusts). So prices can be volatile and discounts widen if a major shareholder decides to reduce their holding or exit entirely.

In recent years IT's have been buying back their own shares either to be held in treasury or for cancellation. This has resulted in shares often trading a premium.

With a diverse portfolio and regular monitoring means it is possible to pick up bargins. By switching new investment monies to the best value available.

As Rollingstone suggested Trustnet is a good site to use.

sabretoothtigger

I primarily hold IT's in my SIPP.

Which ones do you hold can I ask. I know theres a quite few IT sat in the FTSE 250 index, the etf tracker for that is xmcx

http://docs.google.com/viewer?a=v&q=cache:jS9dxpyPtQkJ:www.etf.db.com/UK/EN/pdf/EN/factsheet/factsheetLU0292097317_2010_10.pdf+xmcx+db&hl=en&gl=uk&pid=bl&srcid=ADGEEShygKrFJdruvcIMIS23veCPQWeOjYNPLvOau7hG2vhllYBOz26gD5wC3ntyRoAtGFEZ4W1POTCndAY9zYouUfQ2c422aggyd7NwEgt0nmcXVrLu5DyL_xAH4A-UVCyC6lstDzYg&sig=AHIEtbRposyPb1R5NFF2FFHZbSVxZMMWLQ

http://www.hemscott.com/prices/index-prices.do?index=MID_250