Is it worth it to buy ITs for £50 pm? (Long-term investment)

vax2002

If you had bought £50,000 of gold sovereigns in 1990 how much would they be worth now.
Compare this to the best savings plans you can find and you will find out where the people you gave the money to to invest stuck it, then threw the crumbs back.

Eponym

cloud_dog wrote: »

Ok, I'm ever so slightly confused.

You started this thread wanting to know more about ITs and what to use £50pm for, and that was pretty much all you could afford for the moment. And, there's nothing wrong with this.

Above you clarify that you want to continue investing in the Aberdeen EM fund.

So my confusion is.......

• Aberdeen don't offer a EM IT (only one they list is Lat Am).
• The fund you want to continue with is Aberdeen EM (OIEC)
• And you don't want to switch

Based on your clarification I'd say you just need to carry on using the HL S&S ISA you have and continue investing £50pm...... Unless I've missed something. :question:

Perhaps I didn't explain very well. I don't intend to switch from the Aberdeen until I've invested rather more in it than I have at the moment, but once I've achieved that I will then want to look at ITs. I just didn't really know whether they would be worth bothering with in my circumstances so I thought I would ask now as I was thinking about it anyway.

Thrugelmir

Glen_Clark wrote: »

For instance, if the assets in the Trust are worth £10bn, but the Trust is only worth £8bn, what does that say about the value of the managers running the Trust

Absolutely nothing. Except they are a bargain to add to the portfolio.

So don't make too noise about it.

As for Foreign & Colonial. Have lifted their dividend for the 27 years I've held the shares. With reinvestment does make for a reasonable return.

cloud_dog

Eponym wrote: »

Perhaps I didn't explain very well. I don't intend to switch from the Aberdeen until I've invested rather more in it than I have at the moment, but once I've achieved that I will then want to look at ITs. I just didn't really know whether they would be worth bothering with in my circumstances so I thought I would ask now as I was thinking about it anyway.

All sounds good.

I started my investment road with ITs, small amounts £50pm, then £100pm, etc. When starting off I'd wait for the investment to get to a certain level (£1000) and then switch my monthly investing to another fund.

All this was done outside of PEPs (as was), direct with the IT companies. It was only after a number of years of investing that I decided to start to migrate my investments in to a tax efficient wrapper, and this was done over a number of years.

I know the PEP/ISA allowance is a use it or lose it scenario but in those olden days I really didn't have a sufficiently large disposable income to worry about not using up mt allowances. So this was my strategy.

Jerben

A bit like the OP,... I've been thinking about IT's as a more efficient investment.
Also, within an isa would seem the obvious thing to do.
But... it seems expensive to put IT's into my HL s&s isa for fairly small amounts.
So if it's best to go direct are there any disadvantages?
Is there any tax on the divi's from IT's that would be avoided in an isa?

atush

Well, the divis already have a taxwitholding but they would in an ISa as well. But this could come into play if you pay HRT tax as you would have to declare the income.

There could be (if you had enough of them) be a captial gains tax issue, but given you have a yearly allowance you'd have to be investing large sums each month for this to be a problem?

Chargem

Glen_Clark wrote: »

Thats lke saying its in the best interests of the owners for the managers to run the company badly so someone can buy it cheap.
The shareholders are the ones who own the shares, not those who haven't bought them yet. If the trust was liquidated the shareholders would get nearer £1 for their 70p. So I don't see how it is not in the interest of the shareholders to liquidate the Trust. But I can see how its in the interest of the Trust Managers to keep thinking of excuses to keep the Trust open so they can keep drawing their fees.

Just to clarify this thought about liquidation, if a manager were to liquidate then the mass sell off of assets would probably depress prices and so the actual sell off prices would be below NAV.

It is also not clear cut about "best interests", as although the shares are trading below NAV, underlying asset value and dividends could still be growing, which is good for shareholders. The argument is "if I liquidate now I could give the shareholders £1, but over three years I could grow the assets so that if liquidated then, the shareholders would get £1.15 and dividends a long the way, which is better for them than £1"

Jerben

Thanks atush.
I'm already putting £50 per month into 2 UT's inside my HL isa.
Now thinking of starting with IT's, maybe £500 to £1000 at a time to minimise on costs.
At this level CGT will not be a concern.
I do pay HRT, but try to offset this with payments into my Sipp.
It would be simpler for me to buy the IT inside the isa, but I'm trying to figure out if this is best or not?
It would be £11.95 per deal plus 0.5% pa inside the isa, I think.
Do these not apply for direct IT purchase?

bigfreddiel

Vortigern wrote: »

No purchase costs except possibly Stamp Duty

Also see Baillie Gifford, or RIT Capital Partners for similar plans

instead of its go for etfs - no stamp duty

but even at £1.50 a trade thats 3% to buy £50 worth of its - if you're happy to spend that much then go for it