investments trust for income

Bravepants

atush wrote: »

No i hold others, and some capital preservation and some growth. A little bit of property and some bonds. But i hold more income ITs than any other category.

i'm holding 5 figures of CTY at present.

Yes, I have an S&S ISA for growth, a SIPP held as cash for bridging an early retirement "scheduled" for about 3.5 years away (:)), and a DB pension. Income funds are a tempting source of extra monthly income for when the time comes.

pip895

I am getting rather tempted by Invesco's offerings - they have rather fallen out of favour over the last few years and are now sitting at substantial discounts.

Edenborough is yielding 4.6 and at a discount of ~11% Invesco income growth trust yields 4.3 and has a discount of over 15%!

I have Global and UK small companies well represented in the portfolio so I'm looking for a large company UK based IT and the income would be handy - these seem to fit the bill. TIGT/MRCH & CTY are all sitting on slight premiums so I am less keen. Any one else tempted - what am I missing?

coastline

pip895 wrote: »

I am getting rather tempted by Invesco's offerings - they have rather fallen out of favour over the last few years and are now sitting at substantial discounts.

Edenborough is yielding 4.6 and at a discount of ~11% Invesco income growth trust yields 4.3 and has a discount of over 15%!

I have Global and UK small companies well represented in the portfolio so I'm looking for a large company UK based IT and the income would be handy - these seem to fit the bill. TIGT/MRCH & CTY are all sitting on slight premiums so I am less keen. Any one else tempted - what am I missing?

recent review

https://citywire.co.uk/investment-trust-insider/news/morningstar-slashes-edinburgh-rating-on-performance-and-costs/a1294059

NedS

pip895 wrote: »

I am getting rather tempted by Invesco's offerings - they have rather fallen out of favour over the last few years and are now sitting at substantial discounts.

Edenborough is yielding 4.6 and at a discount of ~11% Invesco income growth trust yields 4.3 and has a discount of over 15%!

I suppose it's tempting if you believe the discount may substantially narrow.

pip895 wrote: »

I have Global and UK small companies well represented in the portfolio so I'm looking for a large company UK based IT and the income would be handy - these seem to fit the bill. TIGT/MRCH & CTY are all sitting on slight premiums so I am less keen. Any one else tempted - what am I missing?

There is a reason some ITs trade at relatively large discounts whilst others trade at slight premiums. Whilst a large discount may represent a buying opportunity if you believe the discount will narrow, or is outside of the normal historical range, I wouldn't be concerned by ITs trading at small premiums. The share price volatility is likely to be far higher than the 1-2% premium in price you are paying and if they have historically always traded at a small premium is there anything to suggest that they will not continue to do so.


I tend to purchase ITs such as CTY for it's dividend income, so I'm more concerned with tracking the relative dividend yield, which may vary between 4-5%. I'd much rather pay a 2% premium to buy when the price is giving me a 4.8% dividend yield than pay a 2% discount for a 4.2% dividend yield when the stock is relatively expensive. So I add to my holding on the market dips, and I recognise a "cheap" price based on the current dividend yield relative to the historical average. I largely ignore the discount/premium.

takesyourchances

atush wrote: »

No i hold others, and some capital preservation and some growth. A little bit of property and some bonds. But i hold more income ITs than any other category.

i'm holding 5 figures of CTY at present.

I have 5 figures as well in CTY, having broke into 10K invested as part of my wider IT portfolio and the dividends are a nice payout from CTY which I reinvest along with others back into the portfolio.

Thrugelmir

pip895 wrote: »

TIGT/MRCH & CTY are all sitting on slight premiums so I am less keen. Any one else tempted - what am I missing?

Monitor the prices until they dip into a discount.

Broaden your horizons. Diverse Income Trust (DIVI) has a good record of dividend growth from investing in a broad selection of UK shares. Though the discount has narrowed more recently.

With a greater focus on domestic earnings Schroder UK Mid Cap Fund (SCP) offers a lower dividend yield but again is progressive. Trades at a good discount currently. Mechanism to control the discount has been put in place.

pip895

Thanks for the tips and links - I now get why EDIN is on a discount - wont necessarily stop me buying but I have to say his top holdings are not ones I would touch in my shares portfolio.

I am less clear on the reason for the IVI discount - you cant tell much from his top ten holdings as he has a much more even spread. The fund seems to be tracking pretty close to the likes of CTY over the last year. Is a break in the record for always increasing the Dividend on the cards/ is it already priced in, through that discount?

ColdIron

pip895 wrote: »

Thanks for the tips and links - I now get why EDIN is on a discount

Well Edinburgh have just sacked Mark Barnett so you might want to take that into consideration
https://citywire.co.uk/wealth-manager/news/edinburgh-trust-sacks-mark-barnett-after-losing-patience/a1304006

pip895

IVI is managed by Ciaran Mallon though not Barnett - not that his record is much better..

Is there a possibility of IVI & PLI being merged together if both are loosing funds?

atush

takesyourchances wrote: »

I have 5 figures as well in CTY, having broke into 10K invested as part of my wider IT portfolio and the dividends are a nice payout from CTY which I reinvest along with others back into the portfolio.

Yes we are reinvesting too at the moment. Will take the income later once retired.