Monthly income

JohnRo

https://forums.moneysavingexpert.com/discussion/4186651

Front page bears little relation to the actual tracker investments currently. Needs updating really but decided to stop tinkering with the first post and leave it alone for continuity.

CWatters_2

I don't think anyone in this thread has mentioned the risk of rising interest rates? Many income funds have a lot in bonds and fixed interest investments. Commentators are suggesting that if interest rates rise these funds could see a significant reduction in capital values. There is talk of a great rotation out of bonds into equities. Some articles suggest ways to minimise this risk by investing in bonds that have a high yield or are short dated, also funds that hold a large percentage of high dividend equities, or "strategic" bond funds that have a mandate that allows them to switch out of bonds.

So with this risk in mind what do people think about these funds..


Invesco Perpetual Distribution Fund (4.9% dist yield, monthly, Equities and various fixed int)
Invesco Perpetual Global Financial Capital (6.6%, mostly corporate bonds from banks and other financial companies?)
Invesco Perpetual Monthly Income Plus (5.7%, monthly, bias to Corporate bonds)
Marlborough Multi Cap Income (4.3%, twice a year, UK Equities)
Premier Multi-Asset Monthly Income (4.4%, monthly, fund of funds)

TCA

JohnRo, what's your thinking in the switch from Best Invest to Charles Stanley? Obviously for the clean classes of fund and (RDR compliant?) pricing but anything else?

I'm looking at probably a similar size of investment trust purchase to you and costwise it would be better for me to continue with Best Invest under their current pricing. Have you heard anything about whether it's likely to change?

JohnRo

Not heard anything about any price changes, I just made the decision I liked CS customer service and the web portal so much that I can live with them being a tad more expensive. I am holding out the hope they may drop their price tag on share dealing transactions in future though.

I have an Iweb account and that would have been cheaper still but I'm just suited to Charles Stanley's web presentation and their interface for some reason. The web portal is new and they're still developing features, it must be the nerd in me but I really like the interactive style of it all. I know it's a few quid dearer for stock purchases but worth it for me and I'm trying to consolidate everything on there because it feels like I've got stuff spread all over the place at the moment and it's purgatory keeping track of it all.

As you can see in the account statement image the transaction charges and tax do sting a little but I'm not sweating a few hundred right at the start, it'll be a few months before I can get any sense of what's doing well.



Going to be clearing out what's left of my TD direct holdings this week and repurchasing on CS, one big advantage of UT funds I find is the lack of transaction costs.

TCA

Thanks John. CS certainly looks pretty swanky. Have to agree far better than Best Invest's efforts and can't blame you for wanting all your stuff in one place. I'm of the same mind. Although all that extra info and functionality might lead to me dabbling too much and actually believing I know something about this investing malarkey. Dangerous!

JohnRo

"The best investment advice I ever got came when I was a runner for a brokerage firm when I was in college. One of the other runners said: “Nobody knows nothing.” And of course that’s true. It’s not given to us to know. The future is not ours to see. You try to make intelligent decisions, have an intelligent plan that balances risk and reward, balances stocks and bonds, and ignore the noise in the market."

John C. Bogle

JohnRo

May prove useful for those interested.

http://citywire.ceros.com/itinsider/moneyaug2013/page/1

JohnRo

Update for those interested, just under a couple of months invested and the dividends have started to kick in. Whether they meet expectations remains to be seen.

The only real surprise here for me is NAIT, they changed the remit of the trust to non-tracking shortly before I purchased but the drop was quite sudden and sustained so not entirely sure what that's about, it coincided with a bit of a cooling off in the US but doesn't really tally with the s&p 500, more so with the DJ. I'm not losing any sleep over it though.



this is the plot I've cobbled together, hopefully over time it'll start to look a little more informative.

JohnRo

Ark_Welder wrote: »

There has been a move in the USA towards more growth-oriented companies at the expense of defensives, i.e. lower yielders favoured over higher yielders. Can't say 100% that this has caused all NAIT's performance, but is likely to have contributed, due to its investment remit.

Defensives might come back into favour soon: another round of US budget and debt limits are approaching; German elections will soon be out of the way, which could make for interesting times again in the eurozone.

Remember that it is the income that you're after, so you should try to concentrate on this and be prepared to accept that your chosen investment method will fall out of favour at times - just as it will fall back into favour at other times. If total return was your requirement then it might be a different story. Be wary of trying to introduce attempts at timing into your strategy unless you have specific reasons to believe that another investment approach might deliver a superior outcome.

Oh I am. Not exactly a veteran but I've been around investment for quite a few years now and learned not to start chewing my nails every time something slides back a little.

The dilemma really is whether to top up now or wait and see if there's a little further for the Asian and US income trusts to drop. Might be a good opportunity to push some of the cash pool towards helping to provide a solid £150 a month, assuming quoted/expected yields are similar in reality. The Asian income is one that had my trigger finger hovering over the buy button, recent lift made me wait and see though.

I'm totally focused on the income of this fund, more or less expected the very slight overall drop in capital I've seen and pleasantly surprised with a couple of the trusts. This is planned as a hold forever proposition so it's definitely all about the income.

The thing I will be interested to see is how the two Invesco monthly income funds duke it out with each other and also whether my very first thought to just pile the lot into IP distribution would have been a better option in the long run, only time will tell but it's all good regardless.

JohnRo

I may well look to significantly increase the IP distribution holding over time, I do confess though at this stage I'm winging it and planning to react to what's unfolding rather than setting out a grand vision and adhering to a rigid plan. Whatever I do it won't just be a jumble of random rash decisions though (...sure).

Another thought I've entertained is to methodically add one new investment trust/fund each and every year as the new ISA allowance kicks in and top up a handful of the existing holdings offering what looks to be the best value at the time.

Ark, your 10% trigger is very much in line with my thinking on top ups, unfortunately my index tracker holds blackrock property and that's comfortably smashed through that point but at the very least the top up lowers the average cost. The emerging market and asian smaller cos. funds in that portfolio have done the same too but I'm much more optimistic about the bounce back prospects of those... tangent... thanks for the reply, appreciated.