City of London Investment Trust

Flatulentoldgoat

I have a retired cousin who has a 5 figure sum and want to get up and running with their ISA to supplement their pension. Any thoughts of CoLiT and the dividends as a means to do so? I know income plus growth can be a bit counter-intuitive...

Sorcerer2018

So CTY has not done particular well over the last year, same goes for many Equity Income trusts, and their dividend is currently under pressure due to the cut from many companies. But the board have decided to continue to pay out the dividend. And although I like CTY don't expect a huge growth from it. Also i certainly wouldn't put a five figure some of money into this alone. Will your cousin be spending the income it generates?

Bravepants

Five figure sums can vary between £10,000 and £99,999. People will generally have different opinions depending on the amount.

Flatulentoldgoat

Sorcerer2018 said:

So CTY has not done particular well over the last year, same goes for many Equity Income trusts, and their dividend is currently under pressure due to the cut from many companies. But the board have decided to continue to pay out the dividend. And although I like CTY don't expect a huge growth from it. Also i certainly wouldn't put a five figure some of money into this alone. Will your cousin be spending the income it generates?

Yes...they're trying to use their savings to create a bit of a pension 'top up' with as little draw down on the actual capital as possible.

Flatulentoldgoat

Bravepants said:

Five figure sums can vary between £10,000 and £99,999. People will generally have different opinions depending on the amount.

In other words, water is wet?

underground99

Flatulentoldgoat said:

Bravepants said:

Five figure sums can vary between £10,000 and £99,999. People will generally have different opinions depending on the amount.

In other words, water is wet?

Well, if you only have £10k it is not really worth building a whole income portfolio out of several different funds and investment trusts; picking one reasonably diversified one that offers your preferred strategy and hoping for the best may be the most practical option.

Whereas if you have £99k for the ISA portfolio I wouldn't put it all into CTY - because although the heavy UK stock exchange focus may offer higher levels of income than some other international markets, it would make sense to diversify internationally for a broader exposure.

Bravepants

Flatulentoldgoat said:

Bravepants said:

Five figure sums can vary between £10,000 and £99,999. People will generally have different opinions depending on the amount.

In other words, water is wet?

You can get wet in a puddle, you can get wet in an ocean, but in an ocean you can also go under!

Bravepants

For what it's worth though, I asked a similar question a few weeks ago:

https://forums.moneysavingexpert.com/discussion/6247638/investment-trust-question/p1

NedS

Flatulentoldgoat said:

Sorcerer2018 said:

So CTY has not done particular well over the last year, same goes for many Equity Income trusts, and their dividend is currently under pressure due to the cut from many companies. But the board have decided to continue to pay out the dividend. And although I like CTY don't expect a huge growth from it. Also i certainly wouldn't put a five figure some of money into this alone. Will your cousin be spending the income it generates?

Yes...they're trying to use their savings to create a bit of a pension 'top up' with as little draw down on the actual capital as possible.

If you are looking to build an income portfolio then CTY seems like an excellent choice to me, as part of a broader diversified number of holdings maybe mixed in with some more global equity, some corporate bonds and renewables/infrastructure ITs, all of which have yields at or above 5% if you look.

CTY certainly hasn't performed as well as global growth funds over the last 5-10 years, but hindsight is a wonderful thing. And so is the knowledge that you have a diversified income stream rolling in every month which covers the bills, regardless of what the stock markets happen to be doing this week/month/year.

ChilliBob

When someone asked this before Merchants was mentioned as a (better, in their view) choice than City. I'm just passing this view on, not my own, as I haven't looked into it

Bravepants

ChilliBob said:

When someone asked this before Merchants was mentioned as a (better, in their view) choice than City. I'm just passing this view on, not my own, as I haven't looked into it

...also Murray Income (MUT)...but as always...Do Your Own Research (DOYR)!