Investment Trusts or OEIC's

Linton

Sally57 wrote: »

So if you don't have the knowledge or experience of IT's are you basically saying its best to stick with OEIC's due to increased risk and volatility ?

A fund's objectives and what it invests in are the prime reasons for buying it. Whether it's an OIEC/UT, IT, or ETF is very much a secondary concern. ITs are more likely to be idiosyncratic or specialist/niche managed funds relying on the experience of the manager to achieve the objectives of the fund, which may well not be simple maximum return. It may be difficult to find equivalent OIECs. On the other hand if you want a simple index tracker or something fairly close perhaps with a bias towards growth you may have more difficulty finding a suitable IT.

Sally57

Linton wrote: »

A fund's objectives and what it invests in are the prime reasons for buying it. Whether it's an OIEC/UT, IT, or ETF is very much a secondary concern. ITs are more likely to be idiosyncratic or specialist/niche managed funds relying on the experience of the manager to achieve the objectives of the fund, which may well not be simple maximum return. It may be difficult to find equivalent OIECs.

What about when the IT and OEIC equivalent have the same manager such as Nick Train with Finsbury and CF Lindsell Train? There seems to be quite a few examples of these overlaps between IT's and OEIC's.

Linton

Sally57 wrote: »

What about when the IT and OEIC equivalent have the same manager such as Nick Train with Finsbury and CF Lindsell Train? There seems to be quite a few examples of these overlaps between IT's and OEIC's.

There are some. But you may find that although the same manager is involved the funds have different objectives or focus on different investments - you would need to check.

If you happen to find two identical funds, one an OEIC and the other an IT you could reasonably choose the IT if it's at a significant discount. Otherwise I personally would go for the OEIC as it avoids the reduction in diversification caused by linking foreign investments to the general state of the LSE.

dunstonh

Sally57 wrote: »

What about when the IT and OEIC equivalent have the same manager such as Nick Train with Finsbury and CF Lindsell Train? There seems to be quite a few examples of these overlaps between IT's and OEIC's.

There are a number of crossovers that do, at first glance, look as if they are very similar but when you look at the objectives and remit, you often find limitations or restrictions on one that the other does not have. Most commonly gearing but can include differences in the limits on weightings in certain types of asset classes, including cash. i.e. one may be able to go more cash heavy than the other. One may be more flexible in the types of assets.

Rollinghome

Sally57 wrote: »

So if you don't have the knowledge or experience of IT's are you basically saying its best to stick with OEIC's due to increased risk and volatility ?

Not really, but obviously anyone investing needs to understand how they differ from UTs and how both the discount/premium and gearing can work for you going into a bull market but against you when a bull market ends. I suspect a few who have gone into ITs fairly recently might be surprised if we have a real correction.

FGT have a discount management policy, as many do now, so should protect against minor swings but that can only do so much if there's a big sell off. ITs are often attractive compared to UTs but arguably less attractive at the moment. The game is to get the maximum return for the minimum risk so all the factors have to be taken into account, including the charges your platform makes for holding the two types of investment, and you should expect a suitably better return to compensate for additional risk. It's a mistake to assume that one or the other will always be the best choice.

Sally57

The IT's I'm considering to add to my investment portfolio (already hold FAS) are as follows:-

Baillie Gifford Japan Trust
Alliance Trust or Witan (still undecided)
Finsbury Growth & Income

Any thoughts/comments on these choices please?

MPN

Sally57 wrote: »

The IT's I'm considering to add to my investment portfolio (already hold FAS) are as follows:-

Baillie Gifford Japan Trust
Alliance Trust or Witan (still undecided)
Finsbury Growth & Income

Any thoughts/comments on these choices please?

I hold all these with the exception of Alliance Trust and have been very pleased with them. In addition, I also hold SMT and FAS.