ISHARES PLC FTSE UK DIVIDEND (IUKD)

Thrugelmir

carry_on_saving2 said:

bowlhead99 said:

carry_on_saving2 said:

With the UK, the general/normal/market cap weighted indices like the FTSE 100, 250 and All Share already have such high dividend yields (about 4.5% currently for 100 and all share, 3.5% for 250) compared to the general global markets 2.0%-2.5% that if you want to buy UK equity income you already plenty of income in a general UK index fund. The 100 and all share yields are comparable with the FTSE all world high dividend yield index, the global equivalent of your iShares etf.
A less extremely dividend focused alternative night be Vanguard's FTSE UK equity income index fund.

Addendum re: UK pessimism. It's often the same people who won't invest their money here who complain the most about the "way the country's going". it's a trend that started in the 80s with the magic phrase "globalisation", the only evidence behind it is that the global market will almost always be less volatile and risky than any one country's market (but the modern globalised world is less than a century old, British capitalism is several centuries old).

Globalisation peaked over two years ago. Eras come and go. 

eskbanker

Thrugelmir said:
Globalisation peaked over two years ago.

By what measure?

A_T

Sailtheworld said:

A_T said:

Look at the value of your holding in this fund. If you didn't hold it and instead had the equivalent in cash would you use that cash to buy this fund tomorrow? You now have your answer.

It's an answer - unfortunately it's an answer to a different question. Also, if you've just lost a chunk of money on a fund there's an inherent bias in place if you ask yourself if you'd buy it again today - the OP wishes he'd never heard of IUKD so he's hardly likely to contemplate buying again. Selling something just because you wouldn't buy it again today is music to the ears of platform providers who probably first thought of this rule of thumb.

No it's the same question. And why would it have been thought up by platform providers?

bowlhead99

A_T said:

Sailtheworld said:

A_T said:

Look at the value of your holding in this fund. If you didn't hold it and instead had the equivalent in cash would you use that cash to buy this fund tomorrow? You now have your answer.

It's an answer - unfortunately it's an answer to a different question. Also, if you've just lost a chunk of money on a fund there's an inherent bias in place if you ask yourself if you'd buy it again today - the OP wishes he'd never heard of IUKD so he's hardly likely to contemplate buying again. Selling something just because you wouldn't buy it again today is music to the ears of platform providers who probably first thought of this rule of thumb.

No it's the same question. And why would it have been thought up by platform providers?

Presumably Sailtheworld believes that 'face the world with an investment portfolio suitable for your objectives' is part of a conspiracy theory dreamt up by the investment platforms and stockbrokers or fund managers, who levy transaction-based fees or 'initial' set-up fees while administering or managing your assets, and would therefore like to sell you more 'work' or even 'advice' when you churn your holdings in a constant search for the nirvana of a perfect portfolio. 

Whereas, Sailtheworld prefers to rebalance or re-evaluate very infrequently, acknowledging the likelihood of a drift from the 'ideal' from time to time but generally not worry about how things are performing, saving the effort and potential costs of implementing a new portfolio or exposure to any transaction fees, spread between buy and sell prices, etc, and just see what happens. Trusting that hindsight will eventually show it was better to sit on the investment rather than switch it, because he/she is not going to be suckered into buying a new asset if the existing one is already 'good enough'.

As many platforms offer asset-value based fees which don't have incremental transaction costs, or do not make much of their fee from trading volume-based charges, the concept of 'don't hold something that you would not want to acquire at its current price' is probably not a grand conspiracy from the platforms to encourage you trade excessively.  It seems to me to just be a common sense piece of advice, to say that if there is no cost or tax implication to switch (or even if there is), why not check in on your portfolio from time to time and see if it is still allocated how you would like. If your needs have changed, or the market conditions have moved your allocations away from the mix that you prefer, or certain types of assets appear to be less useful for this part of an economic cycle, feel free to update your portfolio.

Perhaps there is a grey area or fine line to tread between on the one hand 'excessive tinkering, which might have a cost impact if you are charged for transaction quantities, or a general impact on your mental health' and on the other 'a periodic review of your portfolio to see if its components still have a sensible mix of the characteristics that you want'.

Audaxer

AnotherJoe said:

123mat123 said:

What are the communal experts views on this fund. I have held it for many years in ISA, and it has produced good dividends, but the price crashed in March, and being solely UK based, it hasn't recovered much since. I find it hard to see any good news on the UK horizon and very probably a weaker pound in the future.
If I apply the test "if I didn't own them would I buy them now?" my answer would be a resounding "no".
Maybe I have answered my own question. 
I have taken a sizeable hit (-40%) on them so reluctant to crystalise the loss as it possibly may be a recovery play, and on the whole I don't sell funds unless I see a very good reason to...
Should I dump them for a global tracker.

Buy SMT. 

While SMT has a great record with a rise in the share price of 66% this alone, I'd be a bit concerned that I might have missed the boat if buying now. I've just looked at SMT and was surprised to see that it is currently selling at a discount. Just wondering why this is as I would have expected to see it at quite a high premium?

Sailtheworld

A_T said:

Sailtheworld said:

A_T said:

Look at the value of your holding in this fund. If you didn't hold it and instead had the equivalent in cash would you use that cash to buy this fund tomorrow? You now have your answer.

It's an answer - unfortunately it's an answer to a different question. Also, if you've just lost a chunk of money on a fund there's an inherent bias in place if you ask yourself if you'd buy it again today - the OP wishes he'd never heard of IUKD so he's hardly likely to contemplate buying again. Selling something just because you wouldn't buy it again today is music to the ears of platform providers who probably first thought of this rule of thumb.

No it's the same question. And why would it have been thought up by platform providers?

I've got some cash - would I buy IUKD? I've got IUKD; should I sell it and buy something else with the cash? Clearly different questions.

The platform providers make money when people trade so a nice rule of thumb that suggests people sell something because they wouldn't buy it today is clearly aligned with their interests. Having a well diversified portfolio, being comfortable with sticking with the winners and losers and infrequent re-balancing isn't.

bowlhead99

Audaxer said:

AnotherJoe said:

123mat123 said:

What are the communal experts views on this fund. I have held it for many years in ISA, and it has produced good dividends, but the price crashed in March, and being solely UK based, it hasn't recovered much since. I find it hard to see any good news on the UK horizon and very probably a weaker pound in the future.
If I apply the test "if I didn't own them would I buy them now?" my answer would be a resounding "no".
Maybe I have answered my own question. 
I have taken a sizeable hit (-40%) on them so reluctant to crystalise the loss as it possibly may be a recovery play, and on the whole I don't sell funds unless I see a very good reason to...
Should I dump them for a global tracker.

Buy SMT. 

While SMT has a great record with a rise in the share price of 66% this alone, I'd be a bit concerned that I might have missed the boat if buying now. I've just looked at SMT and was surprised to see that it is currently selling at a discount. Just wondering why this is as I would have expected to see it at quite a high premium?

You can see that over the last year it has slid around between -5%and +5% (glossing over the worst of the Covid drop in March). 

The NAV attributable to each SMT share that you might own will represent the value of a proportionate piece of each underlying company in its portfolio together with some miscellaneous receivables and payables and cash. You can add those things up independently and calculate a NAV each day.  However, when you buy a share you are not literally buying a piece of each investee company and the other misc assets. You are buying a portfolio of assets wrapped up in an investment strategy with fee obligations and gearing and no control over what is bought or sold, and up to a quarter of the assets at a point in time will not be assets that even have a published daily value on a stock market because they are privately-valued holdings which might not go through a full review any more frequently than once a quarter with quite a lag to pull the information together an evaluate it.

Especially where some of the portfolio is in illiquid assets with inherently subjective valuations (and the valuations could rapidly become 'stale'), it would not be unusual for an investment trust to be at a discount, as many funds holding private equity situations might be. If the fund were wound up, the illiquid investments could take ages to sell and not achieve whatever theoretical value is published. So even with a good track record of growth, there are some practical limits on how much people will pay compared to NAV, particularly if there is any independent market opinion or newsflow around the private assets since they were last valued. The fund can move between discount and premium quite easily. 

And you only have to look at your own comments (along lines of 'might have missed the boat if I were to buy now and pay this much) or people on other threads saying they will wait and 'buy on the dip'. So the market value of a growth investment trust that has recently 'had a good run' may find itself priced at a discount because nobody wants o pay the full (e.g.) 970p a share if that woulld be a relative high point.  The question of whether or not people today would want to buy the 'package of assets wrapped up in an investment strategy' is separate from whether they would have an appetite for the underlying individual shares like Tesla etc. The trust might buy back its own shares or issue more to reduce the discount or premium, but it's definitely not unusual to have one from time to time, especially when the underlying assets include non-public holdings.

A_T

Sailtheworld said:

A_T said:

Sailtheworld said:

A_T said:

Look at the value of your holding in this fund. If you didn't hold it and instead had the equivalent in cash would you use that cash to buy this fund tomorrow? You now have your answer.

It's an answer - unfortunately it's an answer to a different question. Also, if you've just lost a chunk of money on a fund there's an inherent bias in place if you ask yourself if you'd buy it again today - the OP wishes he'd never heard of IUKD so he's hardly likely to contemplate buying again. Selling something just because you wouldn't buy it again today is music to the ears of platform providers who probably first thought of this rule of thumb.

No it's the same question. And why would it have been thought up by platform providers?

I've got some cash - would I buy IUKD? I've got IUKD; should I sell it and buy something else with the cash? Clearly different questions.

The platform providers make money when people trade so a nice rule of thumb that suggests people sell something because they wouldn't buy it today is clearly aligned with their interests. Having a well diversified portfolio, being comfortable with sticking with the winners and losers and infrequent re-balancing isn't.

a holding in IUKD has no value other than it's value in £. so effectively it's the same question. "I have £x today what am I going to do with it?"

Sailtheworld said:

A_T said:

Sailtheworld said:

A_T said:

Look at the value of your holding in this fund. If you didn't hold it and instead had the equivalent in cash would you use that cash to buy this fund tomorrow? You now have your answer.

It's an answer - unfortunately it's an answer to a different question. Also, if you've just lost a chunk of money on a fund there's an inherent bias in place if you ask yourself if you'd buy it again today - the OP wishes he'd never heard of IUKD so he's hardly likely to contemplate buying again. Selling something just because you wouldn't buy it again today is music to the ears of platform providers who probably first thought of this rule of thumb.

No it's the same question. And why would it have been thought up by platform providers?

The platform providers make money when people trade so a nice rule of thumb that suggests people sell something because they wouldn't buy it today is clearly aligned with their interests. Having a well diversified portfolio, being comfortable with sticking with the winners and losers and infrequent re-balancing isn't.

Rather a foolish theory. But if you can trace the source of this "rule of thumb" to a platform provider then well done.

carry_on_saving2

This isn't a debate. What this goes back to is why do broker recommendations come in sell hold and buy flavours rather than just sell and buy. A rational investor ought not to hold somethingthey would not buy more of, if you would not buy more of it at the current price then you are saying you should sell it. Alas we humans are not rational creatures, and like to "hold what we have" 'leave it as it is" rather than think of terms of trading it in for something we would rather have.
That's it.
Bowlhead99 hasn't come back to me on my last post yet, seems to spend a lot of words.

bowlhead99

carry_on_saving2 said:

This isn't a debate. 

Oh OK.

carry_on_saving2 said:

 A rational investor ought not to hold somethingthey would not buy more of, if you would not buy more of it at the current price then you are saying you should sell it. 

I guess that's how I ended up with seven thousand sausages in my fridge, until I sold them for reasons of practicality.

Bowlhead99 hasn't come back to me on my last post yet, seems to spend a lot of words.

Yes, I mostly spent today's words on other people.