PNL & CGT. How Much to Invest In One Go Without Breaking System

Chris75

Good morning everyone.

I have always purchased unit trusts but I am now convinced that I should hold some money in Investment Trusts. Being old and interested purely in Capital Preservation I am looking at PNL and CGT to start with.

The question is how much can I invest in either of these without it causing some sort of problem with regard to dealing? I am looking at significantly large amounts.

george4064

Both have large marker caps and very liquid.

How much is a 'significantly large amount' for you? For some people that may be £10k, others maybe £1m.

You may need to buy the shares through a market order, but they should be filled pretty quickly.

To see how many you can buy before you 'break the system', you can try get quotes through your investment platform and see how many shares you can get a live quote for.

I think HL used to say what the Electronic Market Size (EMS) is for each stock, generally speaking any orders over the EMS will need to be filled through a market order left with a broker (your platform will do this, after receiving your instruction to buy X shares at a certain price or less).

Chris75

george4064 said:

.........How much is a 'significantly large amount' for you? For some people that may be £10k, others maybe £1m.............

Somewhere in the middle of those

aroominyork

What sort of problems do you have in mind? A phone call about where your funds come from; the dealer unable to buy enough units to fulfill your purchase; bringing down the capitalist system (though I think Liz Truss will be perfectly capable of doing that without assistance)?

Also, why investment trusts? Both these ITs have OEIC equaivalents and while CGT seems to have a slight edge over CG Absolute Return, there is no meaningful difference between PNL and Troy Trojan.

george4064

Chris75 said:

george4064 said:

.........How much is a 'significantly large amount' for you? For some people that may be £10k, others maybe £1m.............

Somewhere in the middle of those

I just edited my post above, so give that a try and see what your options are.

Times like this it helps to have a bit of knowledge around how Level 2 trading works, and to have a half decent investment platform (so they know how to speak to the brokers to fill your order quickly, efficiently and at the best price).

Linton

There are plenty of shares available.  The most I have bought in one transaction is is £20K of CGT.  The one caveat is dont do it first thing in the morning.  It appears to take the market makers some time, perhaps an hour, to build up their reserves.

Whether or how you should make special arrangements if you are talking about £50K+s I dont know.

EthicsGradient

The LSE has pages for stocks showing the daily trades, eg https://www.londonstockexchange.com/stock/CGT/capital-gearing-trust-plc/trade-recap

That shows there's typically around £2 million traded in CGT most days, with 2 leaps to about £12 million in the last 6 weeks (a regular trading day? Or just big news?). So far today, the biggest individual trade has been about £70,000.

Linton

aroominyork said:

What sort of problems do you have in mind? A phone call about where your funds come from; the dealer unable to buy enough units to fulfill your purchase; bringing down the capitalist system (though I think Liz Truss will be perfectly capable of doing that without assistance)?

Also, why investment trusts? Both these ITs have OEIC equaivalents and while CGT seems to have a slight edge over CG Absolute Return, there is no meaningful difference between PNL and Troy Trojan.

Common problems with too large an order:
 - The order cannot be met.
 - The price is higher 

InvesterJones

Might it also be worth checking if a dilution levy applies to those funds?

talexuser

I bought 50K of both CGT and PNL in 2018 through iWeb with no problems. Instant transactions ISA and unwrapped

wmb194

InvesterJones said:

Might it also be worth checking if a dilution levy applies to those funds?

Given we're talking about investment trusts, no.