Generating an income from large lump sum

srcandas

TCA wrote: »

This novice is getting a bit lost here guys

TCA apologies if my posts have wandered. It's my age

I am also looking at a bunch of ITs as part of my strategy but I do see them as long term (min several years for each holding) so the acquisition and sale costs are a little less critical - not saying a thing to ignore.

However I find going direct a bit of a pain. Harder to monitor and transfer. My brother uses Fidelity but they only do their own 5 ITs. Sadly he was persuaded to follow Mr Bolton's IT from the start with a major part of his non property wealth so is sitting on a 25+% loss and I do wonder if he had had a bigger choice if he would have spread his cash around a bit or in part bailed out. Perhaps a warning there

That said I love Aberdeen.

Sorry waffling but before you look at the costs of purchase, holding and sale, work out your holdings in terms of holding value (£s) and timespan of review.

I'm sure if you put that here you'll get some options on controlling costs.

:beer:

jamesd

Yes, ITs are traded like shares. Many of the ITs do have direct purchase schemes and those can be cheaper than going via a broker.

phuket

If I could just bring this back to my original question.

If I invest in investment trusts, should I also include other products and if so what do people think would be a sensible proportion of each?

Also on the subject on investment trusts after doing a bit of research I have read that investment trusts are more risky than unit trusts/OEICs. Would anyone care to comment on this?

Also are investment trusts covered by the FSCS?

Thank you!

Glen_Clark

gadgetmind wrote: »

If you put winning down to skill rather than luck, it puts you in a difficult position when you lose.

Thats very true.
Sometimes thats funny.
Sometimes very sad when financial professionals take it very seriously.
I recall several suicides amongst financial professionals after the banking crash.
The average working man was probably worse off, but did not take losing his job as a personal failure because he knew it wasn't his fault. Nothing he could have done would have prevented it.
Financial professionals do often take it as a personal failure when they lose their job. Because they always think of some deal could have done differently which would have made money instead of losing it, as others will have done.

gadgetmind

phuket wrote: »

If I could just bring this back to my original question.

Splendid idea!

If I invest in investment trusts, should I also include other products and if so what do people think would be a sensible proportion of each?

You'll find tables in various places including the Smarter Investing book that's been recommended. The main other asset classes are bonds and commercial property.

Also on the subject on investment trusts after doing a bit of research I have read that investment trusts are more risky than unit trusts/OEICs. Would anyone care to comment on this?

It's hard to generalise. There are safe-as-houses ITs such as Capital Gearing Trust, ITs that invest in smaller companies in Asia, ITs that invest in turn-around private equity, and ITs that invest in high-yielding UK blue chips. There are also multi-asset ITs such as Personal Assets and Ruffer, who hold a bit of everything, but they target long-term total return rather than income.

Also are investment trusts covered by the FSCS?

No, and neither are OEICs, individual equities, corporate bonds, or even (as holders of Irish and Greek bonds found out) sovereign bonds. People usually refer to this as a "risk premium" - if you want more return, then you have to take more risk. You control this risk by holding different asset classes and also by diversifying within these asset classes.

If holdings are wrapped in pensions or ISAs, then you need to hold the different asset classes within each wrapper so you can rebalance. For unwrapped (which I guess is your case) you would just invest in ITs with the geographic and asset class spread that suits you. Bonds can be covered with some ETFs or you could look at Capital Gearing. Or you could decide to keep it simple, and use ITs for equities and put (say) 20% of your money into cash. Some NS&I index linked bonds would be idea (and Smarter Investing cites 80% equities plus 20% NS&I as the simplest you can get!) but they aren't currently on sale.

jamesd

gadgetmind wrote: »

neither are OEICs

While the investments in the funds themselves are not covered by the FSCS, the fund management company and Authorised Corporate Director company are. This mainly provides some protection in case of fraud or serious misconduct by the fund management company or ACD. Since the investment money is required to be held in segregated accounts that means that it would take inappropriate action by the management company or ACD to compromise it and such action would be covered by the FSCS.

bigadaj

Glen_Clark wrote: »

Thats very true.
Sometimes thats funny.
Sometimes very sad when financial professionals take it very seriously.
I recall several suicides amongst financial professionals after the banking crash.
The average working man was probably worse off, but did not take losing his job as a personal failure because he knew it wasn't his fault. Nothing he could have done would have prevented it.
Financial professionals do often take it as a personal failure when they lose their job. Because they always think of some deal could have done differently which would have made money instead of losing it, as others will have done.

I thought those days were long gone, bankers throwing themselves out of skyscrapers on wall street.

The default position now seems to be hang around to get your bonus after dumping the losses on your client, and retire with your massive pension contributions.

gadgetmind

bigadaj wrote: »

I thought those days were long gone, bankers throwing themselves out of skyscrapers on wall street.

That's because there used to such a thing as honour and also that the bankers and investment managers usually had "skin" in the game, by which I mean they were also investing their own money.

Nowadays, reputation means little and they are playing with other people's money.

BTW, it does seem more common for managers of Investment Trusts to have put money in, but I haven't looked at it in great detail.

TCA

srcandas wrote: »

Same here at £2000 you're on average just under 2% for a buy, a sell, stamp and spread (on common shares).

But hl suit me fine. When I move my much bigger funds into single share trading I'll certainly be using them - unless their charging radically changes when the new structures come into place.

Tried cheaper platforms but don't like lack of web site security even if the risk is small.

So HL Vantage Fund & Share Account looks the best current option for longer term investment (of a number of trusts of a certain amount) in investment trusts then? I would also like the ability to check the performance of all my ITs in one place. I'd be buying outside of an ISA wrapper.

So for your very first trades, all would be at £11.95 plus the 0.5% stamp duty, if you bought online or via their mobile app?

But you would save money by phone dealing for 5 trades or more because it's capped at £50? Edited to say: I see in their T&Cs that this is £50 per deal, so online it is then!

And other than the above, just the actual trust charges deducted from your ongoing investment?

http://www.hl.co.uk/investment-services/fund-and-share-account/charges-and-interest-rates

gadgetmind

TCA wrote: »

So HL Fund & Share Account looks the best current option for longer term investment (of a number of trusts of a certain amount) in investment trusts then?

My wife holds an equity and IT portfolio in one of those accounts and it works well.

But you would save money by phone dealing for 5 trades or more because it's capped at £50?

I've never traded by 'phone.

And other than the above, just the actual trust charges deducted from your ongoing investment?

Yes, but that could change at any time. However, HL cap the platform charge at £45 pa in an ISA so I'd hope that any future charge would be at about that level.