Considering Investment Trust investment

greenglide

But do you not actually have to make a purchase now to get the token to put in the coffee machine? I thought they had changed things?

ColdIron

Yes, it was £5 weekdays and £10 weekends I think but now a flat £10 if you want a paper. I think you can get a just coffee in the cafe for any purchase. We have a posh one that gives us cups and not tokens

Reaper

Nocto wrote: »

No one’s come back with a compelling reason to avoid this IT (or IT’s in general - yet!).

As long as you understand how Investment Trusts differ from the more common OEICs. Gearing is important as it means the performance may be amplified - so it does better than a comparable OEIC fund when markets are rising but falls faster and further when markets fall.

I hold them (not least because they count as shares so my fund platform doesn't hit me for the same fees they levy on OEIC funds!) and City of London is indeed one of a number I have invested in.

Audaxer

Reaper wrote: »

As long as you understand how Investment Trusts differ from the more common OEICs. Gearing is important as it means the performance may be amplified - so it does better than a comparable OEIC fund when markets are rising but falls faster and further when markets fall.

I hold them (not least because they count as shares so my fund platform doesn't hit me for the same fees they levy on OEIC funds!) and City of London is indeed one of a number I have invested in.

I was considering Investment Trusts as well, and also thought from the little I had read that City of London seemed a very good one to start with. Although ITs are more volatile, do they keep a the same dividend levels in falling markets?

Nocto

Charting City of London on trustnet it doesn’t seem to be much more volatile than my existing UK income funds (maybe a little), but as I’m used to the ups and downs of the market I can live with that.

I gather that it has raised its dividend every year for the last 50 years, which is very impressive… Though of course no guide to the future, I’d guess that the management are keen not to spoil this record.

Reaper

There are 19 investment trusts that have raised dividends every year for over 20 years (list here).

So if you are after reasonably safe income they may be a good place to start. However remember they achieve this by holding back some profits in the good years to tide them over in the bad ones. That means in growth terms they may lag the market when it is shooting up, but do better when it takes a turn for the worse - so having an opposite effect to gearing!

As I mentioned before the level of gearing increases volatility. You can find out how much gearing an IT uses by looking them up on https://www.theaic.co.uk and then click on the "Charges and Gearing" tab. To understand the effect of gearing on performance see this page:
http://www.theaic.co.uk/aic/glossary/G?item=997

Sally57

Investment Trusts holdings seem much more popular now. Although they differ from OEIC's, as long as people know how they work then why not invest in an investment trust whether UK or Global in tandem with OEIC funds.

As an example my husband holds Finsbury Income & Growth as well as CF Lindsell Train for the UK part of his investment portfolio and Scottish Mortgage and Old Mutual Global Equity for the global element.

David_Aston

F&C products have performed pretty well for the Missus over twenty plus years. As I have said elsewhere, Fidelity European Values were sensational for their first fifteen years of life, at least. Perp. Investment and growth has plodded along steadily since it's launch, as well.

Sue58

Sally57 wrote: »

As an example my husband holds Finsbury Income & Growth as well as CF Lindsell Train for the UK part of his investment portfolio and Scottish Mortgage and Old Mutual Global Equity for the global element.

Gosh they've all done incredibly well! I've just looked on Trustnet at last 5 year performance!

CF Lindsell Train 119.7 - Finsbury 125.2 (both managed by Nick Train)

Old Mutual 153.9 - Scottish Mortgage 174.3

StellaN

Sue58 wrote: »

Gosh they've all done incredibly well! I've just looked on Trustnet at last 5 year performance!

CF Lindsell Train 119.7 - Finsbury 125.2 (both managed by Nick Train)

Old Mutual 153.9 - Scottish Mortgage 174.3

Yes, they are incredible figures but will they continue to perform well in the future?

I suppose, at least with such a well experienced fund manager like Nick Train then the UK fund/trust certainly has a great chance of continued success in performance!