£10,000 annual income from investment trusts

EdGasket

pinkllama wrote: »

Don't all the investment trusts listed to give an income of £10k have an average fee of approx 1%? making the income about £7.5k p.a if not less?

Well yes and no. You'd get the full 10K income however the IT managers take the 1% out of the funds assets so your capital falls by 1%. In a rising market you probably won't notice but in a falling market it adds to the pain.

Audaxer

Hi aajax42, I was also looking in Money Observer and on page 34 it shows a new ISA Share portfolio with an expected annual income of £10,000 from an invested sum of £168,500.

BLB53

You can use the higher charging investment trusts..I hold quite a few, but its more cost efficient to use a low cost index fund. I use the Vanguard Lifestrategy which charges an annual fee of 0.22% compared to ~1.0% for the trusts. On a portfolio of £250K thats an extra £2,000 every year going to the fund managers coffers rather than yours.

Linton

BLB53 wrote: »

You can use the higher charging investment trusts..I hold quite a few, but its more cost efficient to use a low cost index fund. I use the Vanguard Lifestrategy which charges an annual fee of 0.22% compared to ~1.0% for the trusts. On a portfolio of £250K thats an extra £2,000 every year going to the fund managers coffers rather than yours.

The OP is after a steady income. I dont think there is much income to be had from the VLS funds. Something that doesnt give you what you want is too expensive no matter what the cost.

Thrugelmir

Take a look at John Baron's portfolios. You can obtain free access for a week.

http://www.johnbaronportfolios.co.uk/

aajax42

Take a look at John Baron's portfolios. You can obtain free access for a week.

http://www.johnbaronportfolios.co.uk/

Hi Thrugelmir, this is another new one on me. Is it worth the subscription in your view? Anyone else with views on the positives of this or any other investment trust portfolio recommendations mentioned?

BLB53

The OP is after a steady income. I dont think there is much income to be had from the VLS funds. Something that doesnt give you what you want is too expensive no matter what the cost.

Not a problem, just sell 4% of your units each year to give your 'income'. This is what I have done for the past 2 years since purchase. Of course you will need a cash buffer for the bear years but don't overlook the low cost index funds just because you need 3% or 4% income from your portfolio.

ColdIron

The idea of depending upon capital sales for my income would give me sleepless nights. We have had broadly rising markets for over 5 years, how happy would you be to have no income for perhaps 5 years?

Thrugelmir

aajax42 wrote: »

Hi Thrugelmir, this is another new one on me. Is it worth the subscription in your view? Anyone else with views on the positives of this or any other investment trust portfolio recommendations mentioned?

Two of the portfolios are published in the Investors Chronicle every so often in a column that John Baron writes. Personally I don't subscribe to his service. Easy enough to create a new email user every so often to gain free access. I do find his commentary on the portfolio changes interesting. Even in hindsight. A knowledgeable individual. From whom you could learn a lot.

BLB53

The idea of depending upon capital sales for my income would give me sleepless nights. We have had broadly rising markets for over 5 years, how happy would you be to have no income for perhaps 5 years?

This is the reason for my cash buffer..no need for sleepless nights.

But honestly, how many times have we seen 3 consecutive years in the past 30 years when global markets have not delivered a positive return?