Investment Trusts

StellaN

bowlhead99 wrote: »

Smith is basically consumer defensive whereas SMT has a lot of high tech.

So, you could say that they are complementary - because they each hold things that will perform relatively better or worse in different parts of an economic cycle while both being good at what they do, allowing you to buy both and benefit from the diversification by periodically rebalancing between the two.

Or, you could say that one of them is doing it right and one of them is doing it wrong for the market conditions that will be experienced over the next decade, and go with the one you believe to be the best, as a straight gamble.

There is certainly a logic in admitting you don't know what will be best out of the two styles of concentrated, conviction-driven holdings, and buy both.

Obviously if you buy both you are averaging-down the performance of whichever one ends up being best, though with periodic rebalancing you will be able to top up the relatively weaker one with profits from the stronger one as you go from year to year, so the blended performance may be better than the average of its parts.

Of course, if you extend the logic of "buy multiple managers covering global equities" too far, you will end up with a pretty mundane result because you may end up buying a lot of dogs to go with the superstar companies by putting your faith in the consensus view of loads and and loads of managers, many of whom might have diametrically opposed views to SMT and Smith.

Thank you for your views which are more or less what I have come round to appreciate.

I will not make the mistake of buying multiple funds/managers in any of my geographical regions in the future because two complimentary to each other is more than enough!

bowlhead99

StellaN wrote: »

I will not make the mistake of buying multiple managers in any of my geographical regions in the future because two complimentary to each other is more than enough!

It's sometimes pretty rare to find rival fund managers being complimentary to each other, but it does happen!

StellaN

Morphoton wrote: »

With regard to Discounts & Premiums it can be useful to see how these have changed over the past few years and Morningstar has graphs for up to the past 10 years. For SMT see below. Whilst it is usually better to buy on a discount and sell on a premium it cannot always be done and I do hold two ITs which are currently at a premium (BGS & BRFI). I would personally be cautious if the premiums start to get excessive, say much above 5%.

http://tools.morningstar.co.uk/uk/cefreport/default.aspx?tab=1&SecurityToken=E0GBR00R1S%5D2%5D0%5DFCGBR%24%24ALL&Id=E0GBR00R1S&ClientFund=0&CurrencyId=GBP

Thank you for the link.

Regarding premiums, I noticed BGS (Baillie Gifford Shin Nippon) is at a pretty high premium of 7,55% whereas BRFI (Blackrock Frontiers) is a relatively small premium at 085%.

bowlhead99

StellaN wrote: »

Thank you for the link.

Regarding premiums, I noticed BGS (Baillie Gifford Shin Nippon) is at a pretty high premium of 7,55% whereas BRFI (Blackrock Frontiers) is a relatively small premium at 085%.

Well, as they have different investment managers and invest in completely different things, it's not too surprising that the premiums are different - markets will just do what they will do

Morphoton

Yes, BGS is at a highish premium now and because of this I have been selling some but I bought these back in Sep 02 for 95p outside an ISA/PEP so am also trying to avoid CGT !

Hal17

bowlhead99 wrote: »

If you want something simpler, which many people new to investing do, then start with open-ended funds on a fund platform, to which you can subscribe or redeem at most recently calculated/estimated NAV of the underlying holdings.

I like to read all your posts, and as I have just opened my first S&S Isa with Charles Stanley, I am looking for my first investments to select and purchase on a monthly basis, so doing lots of reading.

However, very new to Investing in this type of platform, so unfortunately I did not understand anything in your post above - other than "something simpler." :-) Is there any hope for me?

JohnRo

Hal17 wrote: »

I like to read all your posts, and as I have just opened my first S&S Isa with Charles Stanley, I am looking for my first investments to select and purchase on a monthly basis, so doing lots of reading.

Given the title of the thread I hope you're not planning an IT top up/purchase monthly.

Not unless you have specifically planned to do that as a combined capital deployment/reinvestment/cost cutting exercise with a large portfolio of several trusts or similarly as a planned rebalancing exercise on a large portfolio to negate their maximum platform custody charge.

Unlike some providers CSD don't currently offer a cheap regular investment scheme for shares, on a given day each month.

If you're just thinking about buying one investment to then top up monthly it should to be a fund, otherwise the transaction costs at £11.50 each time will be significant, potentially huge drag on performance depending on the sums involved.

StellaN

Is there a quick way to check out if there are any investments trusts that are currently offering decent discounts or do you have to check each individual IT that is of interest to you?

BLB53

This is the site I use
http://www.theaic.co.uk/

JohnRo

BLB53 wrote: »

http://www.theaic.co.uk/

It has a superb watchlist feature which can be downloaded to a spreadsheet, very useful for obsessive portfolio data hounds.