Fixed income portfolio

Alexland

tiengomar said:

Very much so, in fact I was looking at and researching London investment trust.
I also saw a ground rent income fund but I am cautious because of all the noise around ground rent changes due.

I wouldn't suggest putting your money into ground rents as there is too much risk a government will take action that will undermine the value and income provided by the assets.

In terms of investment trusts they are more complicated than traditional funds because they are exchange traded at a premium or discount and use leverage. By 'London investment trust' do you mean City of London CTY? If so then be careful as it is currently trading at a premium to it's underlying asset value probably due to it's attractive 5% yield (and longest dividend hero status) but then it is achieving that by holding a portfolio biased towards value high income shares some of which offer little growth potential (or are in decline) which won't help in preserving the capital or keeping up with inflation. It might be better to go for a lower yield investment trust which holds a more diversified and sustainable portfolio. Do a lot more research before investing.

tiengomar

Alexland said:

tiengomar said:

Very much so, in fact I was looking at and researching London investment trust.
I also saw a ground rent income fund but I am cautious because of all the noise around ground rent changes due.

I wouldn't suggest putting your money into ground rents as there is too much risk a government will take action that will undermine the value and income provided by the assets.

In terms of investment trusts they are more complicated than traditional funds because they are exchange traded at a premium or discount and use leverage. By 'London investment trust' do you mean City of London CTY? If so then be careful as it is currently trading at a premium to it's underlying asset value probably due to it's attractive 5% yield (and longest dividend hero status) but then it is achieving that by holding a portfolio biased towards value high income shares some of which offer little growth potential (or are in decline) which won't help in preserving the capital or keeping up with inflation. It might be better to go for a lower yield investment trust which holds a more diversified and sustainable portfolio. Do a lot more research before investing.

thanks.

do you have any tips where to research these investment trusts other than mainstream headlines?

AlanP_2

tiengomar said:

Alexland said:

tiengomar said:

Very much so, in fact I was looking at and researching London investment trust.
I also saw a ground rent income fund but I am cautious because of all the noise around ground rent changes due.

I wouldn't suggest putting your money into ground rents as there is too much risk a government will take action that will undermine the value and income provided by the assets.

In terms of investment trusts they are more complicated than traditional funds because they are exchange traded at a premium or discount and use leverage. By 'London investment trust' do you mean City of London CTY? If so then be careful as it is currently trading at a premium to it's underlying asset value probably due to it's attractive 5% yield (and longest dividend hero status) but then it is achieving that by holding a portfolio biased towards value high income shares some of which offer little growth potential (or are in decline) which won't help in preserving the capital or keeping up with inflation. It might be better to go for a lower yield investment trust which holds a more diversified and sustainable portfolio. Do a lot more research before investing.

thanks.

do you have any tips where to research these investment trusts other than mainstream headlines?

https://www.theaic.co.uk/ & https://moneyforums.citywire.co.uk/ are both useful resources, with the latter being opinion as opposed to hard facts.

Other than those any of the big platforms will have factsheets and some analysis as will Trustnet and Morningstar and LSE.

Alexland

tiengomar said:

do you have any tips where to research these investment trusts other than mainstream headlines?

For ITs start at the AIC and research everywhere - follow every link, read annual reports, research the underlying investments and watch or listen to interviews with the fund manager and board members. Compare with other similar trusts and learn how to filter out the marketing spin to try and evaluate the substance of the investment proposition.

Linton

tiengomar said:

Linton said:

My 10 fund income portfolio is, according to Morningstar 50% equity, 32% bonds, 17% other, 1% cash.
The bond component:
Schroder High Yield 50%
L&G High Inocome 25%
Threadneedle EM bond 25%

The funds classified by Morningstar as  "others" are:
Princess Private Equity
GCP Infrastructure

GCP Infrastructure I think makes loans to infrastructure projects.

hi without being too nosey may I ask in percentage how much does the above income portfolio amount compared to your overall net worth?

thanks

The non-equity income funds are about 12% of our investable wealth.

Sorcerer2018

Yep, i have been using the natural income from my portfolio for the last 10 years and will continue to do so in the future. At the moment I am reinvesting it, but I hope in the next 3 years to start to live off it, for the rest of my life. It's made up of 80% investment trusts and 20% OEICs at the moment, most of the OEIC stuff is Bonds. I find bonds have done really well in times of stress, with the added advntage when everyone is panicking at bonds yield rise you can pick up a bargon or two, and ride it. I buy investments to hold forever.

tiengomar

Sorcerer2018 said:

Yep, i have been using the natural income from my portfolio for the last 10 years and will continue to do so in the future. At the moment I am reinvesting it, but I hope in the next 3 years to start to live off it, for the rest of my life. It's made up of 80% investment trusts and 20% OEICs at the moment, most of the OEIC stuff is Bonds. I find bonds have done really well in times of stress, with the added advntage when everyone is panicking at bonds yield rise you can pick up a bargon or two, and ride it. I buy investments to hold forever.

may I ask which investment trust you have in your portfolio?