investment trusts

egg93

Hi All,

Received some excellent financial advice from this forum in the past and hoping to get the same again:D.

I am currently debating whether to start investing some money into ITs (Bankers or Witan for a start {Global IT}) and building a basket of them over the next 4 -5 years covering different sectors, which in theory I would then hold forever. I would look to reinvest dividends, and I guess ideally this would form a part of my retirement plans.

About me:
Mid 20s
Decent pension arrangement at work
About £5k in Vanguard FTSE All-Cap Index (ISA) (Pay into this monthly and will continue to do so until retirement) (Thoughts on this also welcome:rotfl:)
Own house with gf
About 30k cash across a few accounts (1.5% on average)
Live below my means. Reasonable career prospects
No other debts

I guess my question is should I go down the IT route or would it be better to simply add more cash per month to the Vanguard Fund? I would look to make a one-off payment (2k) to either Witan or Bankers to start with and then do similar with other ITs within different sectors (maybe FGT next). Am I being stupid to even contemplate this? Thanks for reading.

atush

TBH, I am a fan of both Bankers and Witan and hold both.

Will this be held in an ISA?

Brown_Bear

Does the Global IT overlap with the FAANG heavy Vanguard tracker?

I would look at sectors that are currently less in favour (eg mining - BRWM). Tech has had a good run - but how much longer?
I would only buy an IT if there was a discount to NAV.
Problem with ITs is that over the long-term the fees can add up. Some are quite expensive fee wise.

I do think ITs are good for illiquid assets (eg REITs) though.

ColdIron

I am a fan of ITs but one problem with your approach, whether ITs or not, is that you will have a portfolio constantly changing as you add the next best idea that comes along, diluting your earlier investments. Rather than pick and mix you would be better to have a plan or an allocation at the outset and fill in the gaps as you go, possibly trying to pick up trusts at a discount, i.e, treat it like a jigsaw. However with low amounts you are almost certainly better to stick to one fund where the allocations are managed for you. It also protects you from reacting badly when one sector or geography performs poorly as this is less apparent in a single fund. Rebalancing becomes quite expensive with only a couple of grand in each trust. I'd wait until I had a lot more invested

StellaN

As ColdIron mentioned until you have a larger investment portfolio then one fund would be best and preferably a multi asset fund such as HSBC Global Strategy, Blackrock Consensus, VLS or L&G Multi Index funds.

If you really prefer to go down the global IT route then I personally prefer and invest in the F&C Investment Trust.

Prism

Why investment trusts rather than funds (unit trusts)? I only use ITs for certain areas, like Brown Bear says, illiquid assets. So small caps, REITs, unlisted equity etc

Many of the best performing global funds are unit trusts

Brown_Bear

StellaN wrote: »

As ColdIron mentioned until you have a larger investment portfolio then one fund would be best and preferably a multi asset fund such as HSBC Global Strategy, Blackrock Consensus, VLS or L&G Multi Index funds.

If you really prefer to go down the global IT route then I personally prefer and invest in the F&C Investment Trust.

Is F&C now part of BMO?

Thrugelmir

Prism wrote: »

Many of the best performing global funds are unit trusts

IT's aren't pure global equity plays. Once you drill a little deeper.

Prism

Thrugelmir wrote: »

IT's aren't pure global equity plays. Once you drill a little deeper.

Agreed. I use investment trusts for that other stuff, however the two that the OP mentioned were global equity

Alexland

egg93 wrote: »

About £5k in Vanguard FTSE All-Cap Index (ISA) (Pay into this monthly and will continue to do so until retirement)

If young and investing in a S&S ISA for retirement have you considered a S&S LISA for the 25% bonus? Unfortunately compared to Vanguard Investor the LISA platform fees for holding funds are a bit higher with HL or AJ Bell in the early years until the value is high enough to switch to ETFs for capped fees.

should I go down the IT route or would it be better to simply add more cash per month to the Vanguard Fund?

I prefer Bankers and F&C to Witan but no longer hold any ITs as I prefer the simplicity of funds and am unconvinced of the benefits of deploying gearing at current market valuations. Adding more money into your existing fund would be my approach.

Brown_Bear wrote: »

Is F&C now part of BMO?

F&C IT is owned by the shareholders but the company board has appointed BMO as fund managers to take decisions about the assets. In theory the board could remove them if they thought it in the interests of shareholders but it rarely happens.

Alex

egg93

Thanks all for the responses...Plenty to think about. I guess the IT approach is best left until I have more knowledge and a bigger pot.

I will instead look to increase my monthly contribution to my S&S ISA. Used my LISA allowance for this year but left it in cash. Unsure what to do with it. Is the Vanguard FTSE All cap a solid choice?

I was under the impression Vanguard Lifestrategy was overweighted to the UK? Would HSBC, Blackrock or L&G be a better option than the All cap or is it unlikely to make a massive difference?

Thanks again