Invesco perpetual high income

brasso

A_Flock_Of_Sheep wrote: »

I have mixed the portfolio I have been messing with using steady/defensive and regular income. It has been VERY VERY interesting and quite a bit of fun researching these this afternoon. Here are some I have considered:

Artemis Strategic Assets (Retail) Accumulation 25%
Troy Trojan Class I Accumulation 25%
Invesco Perpetual High Income 25%
Newton Real Return Class A Income 25%

I'm a fan of IP High Income and Troy Trojan. Can't speak from experience about the others.

If you look at TT over several years you will see that it seems to just go up and up and up, though albeit without spectacular steep rises or falls. A good defensive pick.

IP High Income is all about the fund manager, Neil Woodford. He is either on an amazingly lucky streak, or he has above-average stock-picking abilities. I hold both IPHI and TT, and intend to add to them both.

brasso

A_Flock_Of_Sheep wrote: »

Ohh I didn't realise that. So I could put in the 11k for this ISA year and it is then held until I decide where to invest then I can top up the following week with the next years allowance and that is held with the previous years and I can the ISA 22k when I have decided? That is clever?!:D

Yes, you can.

brasso

A_Flock_Of_Sheep wrote: »

Ohhh I never though of it like that! Those that purchased into this fund in 2008/9 when the banking crisis seemed to dent the performance would be laughing now. I saw in a brochure the growth for them has been astronomical

Google 'dollar cost averaging'or 'pound cost averaging'.

This is the potential pitfall of investing all your ISAs into a few funds right now, when the markets are at record highs.

Also check out Vanguard LifeStrategy.

dunstonh

brasso wrote: »

Personally, I would throw my hat in the air to celebrate the unexpected cheapness of the fund, and i would then buy as much as possible.

Agree. However, the average consumer is not like that. Typically, the average consumer would be in contact with the FOS complaining that they didnt know it could lose money like that.

redbuzzard

A_Flock_Of_Sheep wrote: »

Ohhh I never though of it like that! Those that purchased into this fund in 2008/9 when the banking crisis seemed to dent the performance would be laughing now. I saw in a brochure the growth for them has been astronomical

Just looked back. I opened an ISA for the boss on 2/4/2009 with the whole £7200 invested in IP Income Fund, accumulation units at a price of 1353.61. That is showing a gain of 82.36% today.

I also opened one myself and on 31/03/2009 put my £7200 into HSBC FTSE all share index tracker accumulation units. I've added a bit since, but today's price of 415.40 is 93.9% up on the purchase price.

(That doesn't make me feel clever - if I had been I'd have remortgaged the house and put that in!)

So Woodford hasn't quite matched the index, reinvested over that period. But the volatility is materially lower, and it will fare better if the market drops 20% next week (no I haven't seen that in my crystal ball). And bearing in mind where the market has gone since Christmas, I'm not surprised he's lagging it with what are seen as defensive rather than 'growth' stocks.

I didn't think it was especially risk to put all the year's ISA money into UK equities at that time, and so it has proved. Today I'd be (and I am) hedging a bit more, mainly with the multi asset/absolute return style funds.

I don't think Woodford's lucky. And I don't think it's surprising that a fund invested in big, well financed companies in mainly mature sectors, with strong cash flows, solid dividends, historic yield even at today's price of 3.4%, good cover, strong market positions, has shown steady growth.

What he does have is conviction. He is not trading in and out (advocates of stock-picking take note), and the steady flow of dividends is a less exciting but more reliable prop than reliance on picking winners from cheap recovery plays or expensive growth stocks with poor yields carrying high expectations.

He's lost out at times through not holding banks; but he has also avoided the considerable volatility there.

There's no obvious reason, to this amateur investor, why this strategy shouldn't continue to deliver - as long as you don't expect it to outstrip the index in a bull market. And when the market is down, it won't hurt you so much, the yield supports the price, and those dividends are being reinvested in extra units.

That's why I keep some, even though I am reducing pure index funds and increasing the mixed equity/bond funds and multi-asset funds for the time being.

Just for the sake of conversation of course, far from being advice

melbury

dunstonh wrote: »

It can do either.


It doesnt pay interest. It has an income yield. However, be aware of the points already made on this thread. A savings account may be poor but it will retain its value (subject to inflation). This fund can lose 40% in a short period potentially.

Sorry my post wasn't very clear, I know that these funds do not pay interest.

I meant that you could basically receive more money from an income paying fund than you would currently receive in interest on a savings account with a bank/building society.

IronWolf

I wouldn't really expect an income fund to outperform the index, afterall that is not its purpose; its purpose is to provide a higher income yield than the index itself that is sustainable.

If you want outperformance of the index then you should invest in a fund that isn't restricted to only investing in a certain type of company.

redbuzzard

dunstonh wrote: »

Agree. However, the average consumer is not like that. Typically, the average consumer would be in contact with the FOS complaining that they didnt know it could lose money like that.

Most people need decent advice. Otherwise (and ideally even if they are taking advice too) they should make efforts to educate themselves properly. Many of them won't spend £30 on a few books before risking their life savings.

My heart sinks when I see "you can do better doing your own careful research and picking your own shares than trusting some fund manager/IFA who just follows the market and takes charges out of your money".

The stock pickers are all gripped by the idea that they can beat the market (they must be - otherwise they would buy a tracker).

Almost none of them will get anywhere near market performance overall and over an extended period.

Understanding that you don't need to beat the market(s), only consider what risk you can live with, which markets to allocate to, and to capture most of the performance of them, is the first step to much lower stress and better results.

IMO - I read books, I don't write them. And I do break my own rule and buy shares occasionally. I'm trying to stop doing it. I'm comfortably ahead over the last 4 years, but I haven't beaten the market. And I'm still fighting Greed and Fear with BP and Barclays

Linton

redbuzzard wrote: »

....

Understanding that you don't need to beat the market(s), only consider what risk you can live with, which markets to allocate to, and to capture most of the performance of them, is the first step to much lower stress and better results.

.....

Perfect! Agree completely.

The things that matter are (a) can your chosen markets provide the return required to meet your objectives (b) can your chosen funds in those markets provide that return (c) can you live with the volatility/risk.

Linton

IronWolf wrote: »

I wouldn't really expect an income fund to outperform the index, afterall that is not its purpose; its purpose is to provide a higher income yield than the index itself that is sustainable.

If you want outperformance of the index then you should invest in a fund that isn't restricted to only investing in a certain type of company.

Err, I would say if you want outperformance of the index you are better off in a fund that is restricted to subsets of the index more likely to provide that outperformance. As you say, an income fund is restricted by other criteria,. Companies providing income tend to be the larger and more established ones which would find major relative increases in company value more difficult to achieve.