Investment Trusts / REITS for retirement income.

AsifM068

Thrugelmir said:

AsifM068 said:

Of all the IT's cited, has anyone heard of the Merchant's Trust for I have read that they are on AIC's list as a dividend aristocrat and yield 5%?

You need to dig deeper into the Trust's share holdings and form your own opinion. Also quantify how much has been drawn from reserves to sustain the dividend over the years. As it's not just a question of looking for yield but whether you agree with the fund managers style. Individual companies can very quickly underperform financially or fall of favour with investors. 

Thank you for this Thrugelmir; as very much a new / lay investor I have a lot to learn it seems yet I do have time on my side, around 7 years before retirement at 60, whilst my capital grows through my FTSE Global All Cap index tracker with Vanguard.

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

Do you have any thoughts on junk / high yield bonds for income or are they too risky?

Thrugelmir

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Of all the IT's cited, has anyone heard of the Merchant's Trust for I have read that they are on AIC's list as a dividend aristocrat and yield 5%?

You need to dig deeper into the Trust's share holdings and form your own opinion. Also quantify how much has been drawn from reserves to sustain the dividend over the years. As it's not just a question of looking for yield but whether you agree with the fund managers style. Individual companies can very quickly underperform financially or fall of favour with investors. 

Thank you for this Thrugelmir; as very much a new / lay investor I have a lot to learn it seems yet I do have time on my side, around 7 years before retirement at 60, whilst my capital grows through my FTSE Global All Cap index tracker with Vanguard.

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

Do you have any thoughts on junk / high yield bonds for income or are they too risky?

Personal view is that yield compression does make some types of bonds too risky.  Default by the issuer will result in a 100% capital loss. As if the issuer goes under. Then bond holders are unsecured creditors. Companies rarely have sufficient realisable assets to even cover their preferential creditors. 

Not recommendations but it's worth exploring companies that could possibly provide diversification to your portfolio whilst generating a reasonable income. Here are some examples to research and track, and open up a new world of opportunities. 

Bonds  NCYF, BIPS

Battery Storage GSF,  GRID

Social  HOME, CSH, SOHO

Themes BPCR

Other Assets GCP,  INPP,  HICL

Private Equity APAX

Prism

AsifM068 said:

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

I would ignore that. ITs can pay dividends even if they don't receive them - they don't need to with-hold. The ones that do reinvest the dividends anyway and then sell capital later. Some keep the dividends and don't pay them out.

AsifM068

Thrugelmir said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Of all the IT's cited, has anyone heard of the Merchant's Trust for I have read that they are on AIC's list as a dividend aristocrat and yield 5%?

You need to dig deeper into the Trust's share holdings and form your own opinion. Also quantify how much has been drawn from reserves to sustain the dividend over the years. As it's not just a question of looking for yield but whether you agree with the fund managers style. Individual companies can very quickly underperform financially or fall of favour with investors. 

Thank you for this Thrugelmir; as very much a new / lay investor I have a lot to learn it seems yet I do have time on my side, around 7 years before retirement at 60, whilst my capital grows through my FTSE Global All Cap index tracker with Vanguard.

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

Do you have any thoughts on junk / high yield bonds for income or are they too risky?

Personal view is that yield compression does make some types of bonds too risky.  Default by the issuer will result in a 100% capital loss. As if the issuer goes under. Then bond holders are unsecured creditors. Companies rarely have sufficient realisable assets to even cover their preferential creditors. 

Not recommendations but it's worth exploring companies that could possibly provide diversification to your portfolio whilst generating a reasonable income. Here are some examples to research and track, and open up a new world of opportunities. 

Bonds  NCYF, BIPS

Battery Storage GSF,  GRID

Social  HOME, CSH, SOHO

Themes BPCR

Other Assets GCP,  INPP,  HICL

Private Equity APAX

Thank you for this Thrugelmir.

AsifM068

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Of all the IT's cited, has anyone heard of the Merchant's Trust for I have read that they are on AIC's list as a dividend aristocrat and yield 5%?

You need to dig deeper into the Trust's share holdings and form your own opinion. Also quantify how much has been drawn from reserves to sustain the dividend over the years. As it's not just a question of looking for yield but whether you agree with the fund managers style. Individual companies can very quickly underperform financially or fall of favour with investors. 

Thank you for this Thrugelmir; as very much a new / lay investor I have a lot to learn it seems yet I do have time on my side, around 7 years before retirement at 60, whilst my capital grows through my FTSE Global All Cap index tracker with Vanguard.

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

Do you have any thoughts on junk / high yield bonds for income or are they too risky?

Personal view is that yield compression does make some types of bonds too risky.  Default by the issuer will result in a 100% capital loss. As if the issuer goes under. Then bond holders are unsecured creditors. Companies rarely have sufficient realisable assets to even cover their preferential creditors. 

Not recommendations but it's worth exploring companies that could possibly provide diversification to your portfolio whilst generating a reasonable income. Here are some examples to research and track, and open up a new world of opportunities. 

Bonds  NCYF, BIPS

Battery Storage GSF,  GRID

Social  HOME, CSH, SOHO

Themes BPCR

Other Assets GCP,  INPP,  HICL

Private Equity APAX

Thank you for this Thrugelmir.

Pardon my ignorance Thrugelmir; do I have to pay tax withholding fees when investing in US domiciled funds?

Thrugelmir

AsifM068 said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Of all the IT's cited, has anyone heard of the Merchant's Trust for I have read that they are on AIC's list as a dividend aristocrat and yield 5%?

You need to dig deeper into the Trust's share holdings and form your own opinion. Also quantify how much has been drawn from reserves to sustain the dividend over the years. As it's not just a question of looking for yield but whether you agree with the fund managers style. Individual companies can very quickly underperform financially or fall of favour with investors. 

Thank you for this Thrugelmir; as very much a new / lay investor I have a lot to learn it seems yet I do have time on my side, around 7 years before retirement at 60, whilst my capital grows through my FTSE Global All Cap index tracker with Vanguard.

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

Do you have any thoughts on junk / high yield bonds for income or are they too risky?

Personal view is that yield compression does make some types of bonds too risky.  Default by the issuer will result in a 100% capital loss. As if the issuer goes under. Then bond holders are unsecured creditors. Companies rarely have sufficient realisable assets to even cover their preferential creditors. 

Not recommendations but it's worth exploring companies that could possibly provide diversification to your portfolio whilst generating a reasonable income. Here are some examples to research and track, and open up a new world of opportunities. 

Bonds  NCYF, BIPS

Battery Storage GSF,  GRID

Social  HOME, CSH, SOHO

Themes BPCR

Other Assets GCP,  INPP,  HICL

Private Equity APAX

Thank you for this Thrugelmir.

Pardon my ignorance Thrugelmir; do I have to pay tax withholding fees when investing in US domiciled funds?

Any particular funds in mind? 

AsifM068

Thrugelmir said:

AsifM068 said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Of all the IT's cited, has anyone heard of the Merchant's Trust for I have read that they are on AIC's list as a dividend aristocrat and yield 5%?

You need to dig deeper into the Trust's share holdings and form your own opinion. Also quantify how much has been drawn from reserves to sustain the dividend over the years. As it's not just a question of looking for yield but whether you agree with the fund managers style. Individual companies can very quickly underperform financially or fall of favour with investors. 

Thank you for this Thrugelmir; as very much a new / lay investor I have a lot to learn it seems yet I do have time on my side, around 7 years before retirement at 60, whilst my capital grows through my FTSE Global All Cap index tracker with Vanguard.

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

Do you have any thoughts on junk / high yield bonds for income or are they too risky?

Personal view is that yield compression does make some types of bonds too risky.  Default by the issuer will result in a 100% capital loss. As if the issuer goes under. Then bond holders are unsecured creditors. Companies rarely have sufficient realisable assets to even cover their preferential creditors. 

Not recommendations but it's worth exploring companies that could possibly provide diversification to your portfolio whilst generating a reasonable income. Here are some examples to research and track, and open up a new world of opportunities. 

Bonds  NCYF, BIPS

Battery Storage GSF,  GRID

Social  HOME, CSH, SOHO

Themes BPCR

Other Assets GCP,  INPP,  HICL

Private Equity APAX

Thank you for this Thrugelmir.

Pardon my ignorance Thrugelmir; do I have to pay tax withholding fees when investing in US domiciled funds?

Any particular funds in mind? 

U.S. ETFS and U.S REITS; I understand that there is 30% with-holding tax fee for the U.S. markets when purchasing shares from the U.K. but I'm not sure if the with-holding tax applies to US ETFs and REITS. Can you help? 

wmb194

AsifM068 said:

Thrugelmir said:

AsifM068 said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Thrugelmir said:

AsifM068 said:

Of all the IT's cited, has anyone heard of the Merchant's Trust for I have read that they are on AIC's list as a dividend aristocrat and yield 5%?

You need to dig deeper into the Trust's share holdings and form your own opinion. Also quantify how much has been drawn from reserves to sustain the dividend over the years. As it's not just a question of looking for yield but whether you agree with the fund managers style. Individual companies can very quickly underperform financially or fall of favour with investors. 

Thank you for this Thrugelmir; as very much a new / lay investor I have a lot to learn it seems yet I do have time on my side, around 7 years before retirement at 60, whilst my capital grows through my FTSE Global All Cap index tracker with Vanguard.

The thing that sounds appealing about ITs is that they can with-hold 15% of earnings to preserve future dividends to an extent and the Merchant's Trust would on the surface appear to have a good record of delivering consistent dividends with some capital growth. 

Do you have any thoughts on junk / high yield bonds for income or are they too risky?

Personal view is that yield compression does make some types of bonds too risky.  Default by the issuer will result in a 100% capital loss. As if the issuer goes under. Then bond holders are unsecured creditors. Companies rarely have sufficient realisable assets to even cover their preferential creditors. 

Not recommendations but it's worth exploring companies that could possibly provide diversification to your portfolio whilst generating a reasonable income. Here are some examples to research and track, and open up a new world of opportunities. 

Bonds  NCYF, BIPS

Battery Storage GSF,  GRID

Social  HOME, CSH, SOHO

Themes BPCR

Other Assets GCP,  INPP,  HICL

Private Equity APAX

Thank you for this Thrugelmir.

Pardon my ignorance Thrugelmir; do I have to pay tax withholding fees when investing in US domiciled funds?

Any particular funds in mind? 

U.S. ETFS and U.S REITS; I understand that there is 30% with-holding tax fee for the U.S. markets when purchasing shares from the U.K. but I'm not sure if the with-holding tax applies to US ETFs and REITS. Can you help? 

In my experience dividend withholding tax* on US listed ETFs** is the same as with company shares but Reits, same as here, are different and the answer depends on the type of distribution.

https://www.investopedia.com/articles/pf/08/reit-tax.asp

*15% outside a Sipp/pension if you complete a W8-BEN declaration
**This is if you're allowed to even buy them as most don't have the EU mifid/priips or whatever it's called compliant documentation

NedS

I started a similar thread below, but income investing seems very out of favour at the moment:

https://forums.moneysavingexpert.com/discussion/6260952/ideas-for-your-income-portfolio/p1

In addition to @Thrugelmir's suggestions above, here are a few of my holdings (and a couple on the watchlist):

Equity

CTY, HFEL, BATS, RDSB, and looking to add DLG, LGEN, NG and more BATS on price weakness. RDSB is more of a historical holding, but the dividend yield has now recovered to 4.9%, so I continue to hold it in the hope of a price recovery should oil prices surge.

Infrastructure / Renewables

BSIF, FSFL, GSF, JLEN, NESF, UKW

Property REITS

CSH, THRL

Debt/Loans/Bonds

BPCR, GABI, NCYF, SEQI, TFIF

I'm not a big fan of corporate bonds ATM as spreads are too tight for my liking.

I looked at Hipgnosis Songs Fund (SONG), but it's too pricey/low yield for me at present, and I worry it will be a money pit of investment in the long term.

I like periods of volatility that allow me to pick up new holdings, or add to existing holdings at favourable prices. A 10-15% market correction / pull back now would be great.

My goal is to build a diversified investment portfolio capable of yielding 5% rising with inflation, so I am looking for yields of 5% or more, that are sustainable and capable of increasing with inflation. My portfolio currently has a forward yield of 5.97% (6.17% based on purchase price). Like you, I'm still a few years out from drawing income, and am still currently deploying assets / building the portfolio, but the plan is to draw 5% and reinvest the excess income to help sustain annual inflationary increases.

Trustnet has been useful in trying to identify opportunities or other ITs / REITs by sector:

https://www.trustnet.com/fund/price-performance/t/investment-trusts?tab=fundOverview&IsTrustnetITSpecialistVct=false

AsifM068

Is it too risky to go all in with an Investment Trust for a retirement to supplement my pension with income dividend, and have say 25% in cash as a hedge / emergency fund