Investment Trusts for Income and reasonable charges?

philng

Looking to maybe dip into IT's with some spare cash to compliment share portfolio. Any suggestioins or links to articles that may help with recommendations. I have considered Edinburgh IT & City of London but both are at a premium to NAV.

Rollinghome

For some suggestions, including both closed and open-ended funds, you could look here: http://www.investorschronicle.co.uk/2012/07/03/funds-and-etfs/ic-top-funds-2tJw2RT28T6GH04lkFVcEL/article.html

As the price of ITs is determined by the markets, the downside of following any popular tip list is that you might overpay.

For all the numbers, the Assoc of Investment Companies: http://www.theaic.co.uk/
and Trustnet www.trustnet.co.uk

BLB53

I have considered Edinburgh IT & City of London but both are at a premium to NAV.

I hold both in my income portfolio. Both are quality ITs and may remain at a premium for some time. If you are investing for the long term, I would not be too concerned about the premium or discount - what matters more imo, is growth of income and total return.

Others I hold for income are: Murray Income, Murray International, Temple Bar and Law Debenture. Newly launched Blackrock North America also looks interesting - offers 4% starting yield and access to some of the biggest companies eg Pepsi, Macdonalds, Pfizer, Procter & Gamble etc.

Glen_Clark

BLB53 wrote: »

I would not be too concerned about the premium or discount - what matters more imo, is growth of income and total return.

True, but I know what the premium or discount is. How do I find out what the growth of income and total return is going to be?

BLB53

True, but I know what the premium or discount is. How do I find out what the growth of income and total return is going to be?

Good point - and, of course, you cannot 100% know these growth rates and can only use the ITs track record in recent years and project this into the future.

For example, the dividend growth for City of London has been very consistent - it was paying 8.07p per share in 2003 and has increased every year - this year is 13.74 - thats 5.5% pa cagr

Murray International was paying 16.3p per share in 2003 and this year it has risen to 40.5p - an impressive 9.5% pa cagr

If you look at the tr figures over 10 yrs they will be even better.

Heres a link to a recent article on RIT looking at income from investment trusts which should give a better picture http://www.retirementinvestingtoday.com/2013/01/investing-for-income-via-investment.html

Thrugelmir

Foreign & Colonial IT has raised its dividend every year for over 40 years.

Before buying a trust look at its major holdings.

Glen_Clark

Thrugelmir wrote: »

Foreign & Colonial IT has raised its dividend every year for over 40 years.

So did Bernard Madoff
I hold F&C - its one of the few I happened to buy at the right time (Feb 09) so is up 67% plus dividends. But I am not particularly interested in dividends, just the underlying earnings.
I guess the discount/premium is a reflection of the value of the fund managers, although they don't admit it when they trade at a discount and F&C has spent a lot of investors money on marketing and running personal investor plans to try and narrow this embarrassing discount. But they atre about to start charging to run these personal investor plans, instead of taking other investors funds out of the trust to pay the running costs (I don't know if this has been forced on them by the new regulations)
I feel more comfortable buying at a discount though, as there is less to lose if the managers turn out to be not as good as the premium suggests.

Glen_Clark

Thrugelmir wrote: »

Foreign & Colonial IT ...

Before buying a trust look at its major holdings.

Major holdings are in other funds, which doesn't tell me much, except its another layer of commission to pay