Best 5 investment trusts for retirement

frugal90

With retirement looming in 18 months time we are looking to re-organise our isa portfolio to provide occasional income when we need it. The plan is to turn on and off the dividend stream as we need access to the money. We have final salary pensions coming our way as the core on our income. If you had 210k, how would you split that - we would prefer a max of 5 or 6 IT's. We currently hold City of London, Finsbury Growth and Income and Woodford Equity Income( unit trust). We have about 100k in cash(within the isa) waiting for a pull back in the market, if there is one?

Looking for ideas and opinions?

Thanks all

Thrugelmir

What's the reasoning behind 5 or 6?

frugal90

Trying to keep it simple- simple as that

ColdIron

There's a good article in Monevator about ITs for retirement
http://monevator.com/investment-trusts-for-deaccumulating-income-investors-2016-update/

For a bit of diversity you could also look at HDIV and IPE (fixed income) FCPT (direct property) and LSLI (bit of everything)

With 210K I'd be looking at more than 6, just ideas and opinions

Thrugelmir

frugal90 wrote: »

Trying to keep it simple- simple as that

Diversification should be a primary goal. With as few as 5 you'd need to focus on the global trusts to get anywhere near enough a broad coverage.

Linton

I think you are looking at your portfolio problem the wrong way around - which ITs should be the last thing you think about, not the first. Perhaps you could follow a process like...

1) What do you want from the portfolio? Capital growth? If so how much? You will need some bearing in mind you will be retired for perhaps 30 years. You will need income. How much on average?
Perhaps produce a year by year cash flow spreadsheet.
2) What sort of investments do you need to provide (1). eg % focussed on long term growth , % focussed on dividends and interest to provide automatic income. A % in safe investments to cover short/medium term expenditure.
3) For each need identified in (2) how would you distribute it globally and what sort of investments. Long term growth should be very diversified world wide mainly equity. A steady income perhaps better in Sterling bonds and UK equity, though a fair amount outside the UK may be prudent. Short term needs should not be dependent on equity.
4) Now you are in a position to decide which specific investments you should buy. Whether they are ITs, ETFs, unit trusts or individual shares is the final detail. Which ever provides the funds you neecd.

On some of your other comments....
- All your nominated ITs are UK based. In my view this is a bad idea. You are ruling out significant parts of global industry, or even UK industry as much of this is foreign owned and only quoted on foreign exchanges.
- For someone wanting a dividend stream neither Woodford nor Finsbury seem obvious choices. They both return less than the FTSE100 average.
- Waiting for a pull back in the market may make you feel happier but it probably wont improve your investment return. A significant pull back may not happen for some time and there may be a boom whilst you are waiting. All the time you are out of the martket you are missing out on dividends.

TCA

I'd echo Linton's comments. In terms of IT suggestions, have a peek at JohnRo's Monthly Income thread below (hope you don't mind John). That's not a recommendation for any specific trusts, but it might give you some ideas in relation to diversification and global income generation from a portfolio of investment trusts. Go to the last post:

https://forums.moneysavingexpert.com/discussion/4662291

ffacoffipawb

I'm probably the other extreme. I have 24 Investment Trusts in my Hargreaves Lansdown ISA:-

Aberdeen Asian Income Fund Ltd.
Bankers Inv Trust
BlackRock Income Strategies Trust
City of London Inv Trust
Dunedin Income Growth Inv Trust
Edinburgh Inv Trust
European Assets Trust
F&C Capital & Income Inv Trust
Henderson Far East Income Ltd.
Invesco Income Growth Trust
JPMorgan European Investment Trust
JPM Global Mkts Emerging Income Trust
JPMorgan Claverhouse Inv Trust
Law Debenture Corp.
Lowland Investment Co.
Mercantile Inv Trust
Merchants Trust
Murray Income Trust
Murray International Trust
Perpetual Income & Growth Inv Trust
Schroder Income Growth Fund
Schroder Oriental Income Fund
Scottish American Inv Company
Temple Bar Inv Trust

That list may give dunstonh a fit!

AnotherJoe

That's an impressive collection ! What's the average income from those overall ? And has it jumped substantially since the Brexit vote ?

OP what do you mean by "turn on and off the income stream" ? How would you turn it off ?

ffacoffipawb

AnotherJoe wrote: »

That's an impressive collection ! What's the average income from those overall ? And has it jumped substantially since the Brexit vote ?

OP what do you mean by "turn on and off the income stream" ? How would you turn it off ?

If the first question is for me, the yield is approx 4%. And up a lot since Brexit, especially Mercantile bought just after the vote at just under £14 and now over £17 with a dividend to boot.

Linton

ffacoffipawb wrote: »

I'm probably the other extreme. I have 24 Investment Trusts in my Hargreaves Lansdown ISA:-

Aberdeen Asian Income Fund Ltd.
Bankers Inv Trust
BlackRock Income Strategies Trust
City of London Inv Trust
Dunedin Income Growth Inv Trust
Edinburgh Inv Trust
European Assets Trust
F&C Capital & Income Inv Trust
Henderson Far East Income Ltd.
Invesco Income Growth Trust
JPMorgan European Investment Trust
JPM Global Mkts Emerging Income Trust
JPMorgan Claverhouse Inv Trust
Law Debenture Corp.
Lowland Investment Co.
Mercantile Inv Trust
Merchants Trust
Murray Income Trust
Murray International Trust
Perpetual Income & Growth Inv Trust
Schroder Income Growth Fund
Schroder Oriental Income Fund
Scottish American Inv Company
Temple Bar Inv Trust

That list may give dunstonh a fit!

It might be interesting to run that lot through the morningstar portfolio Xray tool to see what the overall allocation is and the duplications in the holdings. I suspect you get get rid of half the funds, juggle the rest around a bit and still have much the same underlying allocation.