Opinions on these 10 Investment Trusts to restructure share portfolio?

philng

I have been researching ITs as a way of de risking my current individual share holdings.

Found a useful article on City Wire from Feb that looked at ITS paying 3%+ dividend and trying to analyse the long term winners.

Anyway thoughts on the following would be interesting:

Temple Bar
City of London
Muray Income
Dunedin Income & Growth
Henerson High Income
Merchants
Aberdeen Asian Income
Schroder Oriental Income
Black Rock Income Strategy (formally British Assets)
Bankers

Objective is to receive income following impending redundancy on a growing basis.

I already hold some City Of London and Scottish Mortgage both I have been pleased with.

philng

Didn't get any replies to this.

Any opinions would be appreciated?

Reaper

I like the idea of an all Investment Trust portfolio, but just be aware they are often leveraged, which means they may boost performance in the good times but drop in value fast when there are crashes.

The Investors Chronicle has been running both Growth and Income versions for some time with regular updates to explain changes. You do not need to be a paid subscriber to see them but you will probably need to sign up for the free registration. Then head here:
http://www.investorschronicle.co.uk/tips-and-ideas/our-portfolios/investment-trust-portfolio/

P.S. I own almost half the ones on your list

atush

If you will draw income and not equity, you should be somewhat immune to short term falls.

Have you researched these on the Motley Fool? There is a sector on ITS with some threads on Income Its there.

If you like the 2 you have, why not put more there?

BLB53

I like Bankers, City London and Temple Bar - the others may provide a reasonable income but possibly not much else.

Be aware of charges and gearing with ITs. The Far East focussed trusts and usually the higher income trusts have charges over 1%.

Another option is to look at globally diverse, low cost index funds such as Vanguard's LifeStrategy and consider selling units from the annual growth/income generated. The total return on these index funds can be higher than the managed ITs due to the lower costs.

westy22

BLB53 wrote: »

The total return on these index funds can be higher than the managed ITs due to the lower costs.

Equally true is that the total return on these index funds can be lower than the managed ITs due to their reduced performance. You pays your money and you takes your choice.

BLB53

You pays your money and you takes your choice

True, but leaving aside the 3 ITs I like, it would be interesting to compare the returns on the remaining ITs against say VLS80 over say the past 3 yrs.

I do not know the answer but suspect the index fund would come out pretty well?

BTW, I meant to say Finsbury Growth & Income IT may be worth adding to the list for consideraton - not the highest yielder ~2% or so but very good total return.

westy22

I agree that it probably would come out pretty well against a basket of ITs as IIRC the LS80% has produced about 10% per annum over the past 4 years since its launch in 2011.

Of course, this has been through a period of rising market tides which have floated all boats equally. The LS funds, however, have not yet proved their mettle in a seriously falling market whereas you can track the performance of many of the long established ITs for 20, 30 or even 50 years.

BLB53

I just did a quick comparison via the HL site for the past 3 yrs:

VLS 100 47.4% and VLS 80 38.9%

Dunedin Income 29.3%
Murray Income 28.0%
Aberdeen Asian 8.1%
Schroder Oriental 36.6%
B/rock Income 33.9%
Merchants 53.7%
Hend High Inc 67.9%

Looking for income yield per se may mean investors overlook other more profitable opportunities.

westy22

Agreed that yield is not everything. I personally am not adverse to selling down capital to produce income, particularly when held in non-sheltered accounts as it enables one to use the annual CGT allowance in an efficient manner.

Total Return (TR) is what really matters IMHO. I therefore question the inclusion of Temple Bar on that basis as, although its yield is reasonable, the TR performance has been awful these past 3 years due to Alistair Mundy's dogged persistence that 'this market is unreal and it's all going to end in tears' prognosis. Time will doubtless tell, but he has a lot of ground to make up when the tide turns.

Rollinghome

westy22 wrote: »

Of course, this has been through a period of rising market tides which have floated all boats equally.

Not sure that's strictly true, depending on how picky you are. In particular, many premiums on ITs are close to record highs, due both to the long bull market and to RDR, which with the ending of commission on UTs has made advisors and the likes of HL more willing to recommend ITs. That has greatly enhanced the share prices of many ITs over recent years. As discounts/premiums don't move in one directions indefinitely, a better but more complicated exercise would be to compare NAVs rather than share prices.

Much as I generally prefer ITs, at this point I'm being very mindful of the effect should the trend of closing discounts go into reverse, especially in more volatile and specialist ITs.