Personal Assets Trust vs Trojan O Acc

MichelleN

I have nearly settled on my investment portfolio and PNL or Trojan O will be my main holding. At the moment I am still undecided on whether to go with PNL or Trojan O. There is practically no difference in performance, however with PNL I would have to pay 0.5% stamp duty on my initial investment. Platform fees do not really come into it because my ISA is with iWeb and my SIPP is with Fidelity so if I went with the PNL it would be on the Fidelity platform as the charges are capped at £45 per annum and IWeb for Trojan O. Please can I ask if there are any other considerations that I should be aware of before making a final decision? Thanks.   

george4064

You must consider the differences in the actual vehicles they are, Troy Trojan being a unit trust that always trades at NAV whilst PNL’s share price can fluctuate from its NAV (the trust trades at a premium when share price > NAV and vice versa at a discount when share price < NAV).

hyperhypo

I'm also looking at PNL (and at similar so-called capital preservation funds) , as a purchase from  a final , relatively  large employment termination payment into pension. How does one sell IT shares ?Whilst PNL's premium appears to hover around 1%, many others  fluctuate between discount and  premium. How does one sell IT shares at a  significant premium when their average ratio may have been at a slight discount. 
 Might anyone not wish to buy them as such at an inflated premium to NAV ? 

ColdIron

They are very similar although not identical. But the main thing that strikes me is that it would be odd to base the decision to add my main holding to my SIPP, to the exclusion of my ISA, or vice versa, based on a largely insignificant criteria like stamp duty (for instance the difference in OCF would matter more in the long run). This suggests you have one portfolio spread across two tax wrappers

My SIPP and my ISA have different objectives as they have different restrictions and tax pros and cons. Your SIPP would receive tax relief in the way in but a possible tax liability on the way out while your ISA contributions would be net of tax and withdrawals tax free. How would you rebalance across the two etc?

bowlhead99

hyperhypo said:

. How does one sell IT shares ?

You place an order with your stockbroker / investment platform to dispose of them on the London stock exchange, either at above some minimum price you set ('limit order') or at whatever price they can get for them in the market ('market best').

How does one sell IT shares at a  significant premium when their average ratio may have been at a slight discount

Well, one doesn't sell them for a significant premium if nobody wants to buy them at a significant premium and they instead only want to buy them at a discount. Market forces determine the price of any company share or investment trust. The fact that you bought them at a discount or a premium back in the day is not something the market cares about, because your shares are functionally equivalent to everyone else's shares, so people will offer to buy shares at whatever price they want to pay, and if you don't like the price people are bidding you won't sell, and if you do, you will. People buying will want to pay as little as they can get away with, and sellers will want to ask as much as they can get away with and still sell as much as they want to sell. If there is a lot of appetite in the market to buy a particular share or investment trust it will have a higher price than if there is not much appetite.

Might anyone not wish to buy them as such at an inflated premium to NAV ?

The price to buy a share of an investment trust may differ from the underlying 'fair value' of all the assets and liabilities held by the company, because you are not buying all those individual assets one at a time with the freedom to give them back whenever you like. You are buying the collection of assets together with the ongoing services of the directors and fund managers and company accountants and administrators all wrapped up in an investment strategy and the only way to exit is to find someone to who wants to buy your shares. And there are a limited number of shares to go round. So, sometimes you might have to pay a relatively high price to get in, or accept a relatively low price to get out, compared to the theoretical value of all the assets added together.

PNL has a relatively effective discount/premium control mechanism, as to avoid the shares trading at a heavy discount to NAV, the company can simply spend some of its cash repurchasing shares in the market from time to time, if they are able to do so at less than NAV (creating relative demand by reducing the number of shares that would otherwise be sitting around in the market ready to be bought, which will improve the NAV per share as well as the price people are paying); while if the shares are trading at a premium they can instead issue some new shares at a bit more than NAV, increasing supply and helping people avoid paying significantly more than NAV if they want to add to their holdings.

MichelleN

ColdIron said:

They are very similar although not identical. But the main thing that strikes me is that it would be odd to base the decision to add my main holding to my SIPP, to the exclusion of my ISA, or vice versa, based on a largely insignificant criteria like stamp duty (for instance the difference in OCF would matter more in the long run). This suggests you have one portfolio spread across two tax wrappers

My SIPP and my ISA have different objectives as they have different restrictions and tax pros and cons. Your SIPP would receive tax relief in the way in but a possible tax liability on the way out while your ISA contributions would be net of tax and withdrawals tax free. How would you rebalance across the two etc?

Good point in relation to the difference in OCF. I believe PNL is 0.91 and Trojan O is 1.02. I am veering more towards PNL and if so, I will split the holding between my ISA and SIPP.

Thrugelmir

OEIC's are a once a day dealing opportunity. Some people prefer the ability to trade whenever they wish. Rather than be subjected to the whims of the markets. 

Sue58

OP, maybe you could consider PNL for your SIPP with Fidelity and the Trojan O fund for your ISA on IWeb?

Albermarle

PNL has certainly done its job this year , pretty much zero loss year to date . Even at the worst time it was down 10% and IT's shares tend to overreact when markets are falling fast .

Alexland

MichelleN said:

Platform fees do not really come into it because my ISA is with iWeb and my SIPP is with Fidelity so if I went with the PNL it would be on the Fidelity platform as the charges are capped at £45 per annum and IWeb for Trojan O.

Although I agree the benefits of having an iWeb ISA for funds and a Fidelity SIPP for exchange traded assets (we both do this with both providers) surely it does matter as usually you would be picking an main investment for each particular account? Or is the answer that you like both of these so would hold the Trojan fund in your iWeb ISA and PNL in your Fidelity SIPP? Even then do the accounts have the same withdrawal timescales?

MichelleN

Alexland said:

MichelleN said:

Platform fees do not really come into it because my ISA is with iWeb and my SIPP is with Fidelity so if I went with the PNL it would be on the Fidelity platform as the charges are capped at £45 per annum and IWeb for Trojan O.

Although I agree the benefits of having an iWeb ISA for funds and a Fidelity SIPP for exchange traded assets (we both do this with both providers) surely it does matter as usually you would be picking an main investment for each particular account? Or is the answer that you like both of these so would hold the Trojan fund in your iWeb ISA and PNL in your Fidelity SIPP? Even then do the accounts have the same withdrawal timescales?

My husband retired several years ago but I am still working so we are living on my wage. I enjoy my job but may retire in the next 5 years or so. We have a good cash buffer and don’t currently require any income from our investments. We just feel that now we should start to reduce our risk profile from a purely growth portfolio to a 60/40 split with some WP funds.