Woodford Equity Income
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From the performance data I dont see any good reason to transfer. Over the past 12 months Merchants Trust has greatly outperformed Woodford Equity but in the previous 2.5 years Merchants Trust barely broke even whilst Woodford returned 30% . Selling low priced investments to buy high priced ones every year is a very good way to lose money - you should be doing it the other way round.
Merchants pays rather higher dividends than Woodford, but if you wanted high dividends why did you buy Woodford in the first place? Note that performance figures include dividends. Dividends aren't an added extra.
Performance figures are an interesting point, because OEIC and Investment Trusts tend not to have the same graphs. Making it harder to work out what is going on. I tend to find OEIC's include the dividend and Investment Trusts are showing just the price.
So I have my own graphs built in Power BI, so I can compare like for like on a share price difference.0 -
Whilst using equity income funds and reinvested dividends is a valid strategy for part of a total return portfolio, I'd be inclined to hold off hunting for yield until I actually needed it
Totally a fair point, but i have also got to worry about how my mind works. I know that when my investments start to drop I have the potential to panic sell. To try to avoid that I generate income, I use this income to buy more at a cheaper price and average down. If I don't have the extra cash I can't buy more. And my little mind goes into panic mode.
Please bear in mind, that will only make up about 5% of the total investment portfolio, this includes global, property , American (north and south), Asia. And a a number of absolute return funds , also generating income.0 -
Performance figures are an interesting point, because OEIC and Investment Trusts tend not to have the same graphs. Making it harder to work out what is going on. I tend to find OEIC's include the dividend and Investment Trusts are showing just the price.
So I have my own graphs built in Power BI, so I can compare like for like on a share price difference.
Have a look at Trustnet/Tools/Charting. It lets you put any number of funds or shares on the same graph to compare performance over any time period. You can chose whether to include dividend reinvestment or not. Trustnet data is based on total return.0 -
The premium or discount that an IT trades at and by how much is certainly a factor you should consider. The NAV will be what it will be whilst the share price is a reflection of investor sentiment of the holdings or the company that holds them. You should establish the reasons for the difference, sometimes it can be beneficial to you, sometimes notWith IT's as well as looking at gearing and any yield for income (if required) is it more important to assess the NAV price as opposed to the share price with regards to results/profits?0 -
I noticed Merchants has a nav of about -6%, i guess reflecting the lack of confidence their is in the UK at the moment, with Brexit hanging over us. -6% doesn't seem to bad, i have had worse, i currently hold one that's at -22%, and I keep buying more.0
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I wouldn't say so, there are others in the same sector that trade at a premium. I haven't looked at Merchants for the whys and whereforesI noticed Merchants has a nav of about -6%, i guess reflecting the lack of confidence their is in the UK at the moment, with Brexit hanging over us.
PS The NAV is the net asset value of the underlying holdings, the -6% you are referring to is the discount or the difference between the share price and the NAV0 -
The premium or discount that an IT trades at and by how much is certainly a factor you should consider. The NAV will be what it will be whilst the share price is a reflection of investor sentiment of the holdings or the company that holds them. You should establish the reasons for the difference, sometimes it can be beneficial to you, sometimes not
Thank you for your response on this. So is it the share price that determines the profit you make in an investment with an IT? As an example, I have a small holding (£5K) in Worldwide Healthcare Trust and it has performed well but mostly the share price is higher than the NAV?0 -
This has all been very interesting, it's always interesting to see what other people think, i have a few days to think about it, since it normally takes 2-3 days to sell an OEIC. But if I did go for Merchants i would like to get it pretty sharpish so I can get the next dividend.0
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Simplistically, the share price determines the cost that you pay when you buy and the value you receive when you sell, the difference is your profit or loss irrespective of NAV (plus of course any dividends you may have received while you held them). Slightly less simplistically, all things being equal the share price will reflect changes in the underlying NAV, so if you bought at a 5% premium or discount and sold at the same premium or discount your profit or loss will be the same as the change in NAV which the share price reflects. However consider the scenario where a star fund manager retires or leaves after delivering stellar returns for many years. The shares you bought at a 10% premium could become worth a lot less if sentiment towards an new unknown manager moved that premium to a 10% discount. This could happen with no change at all to the NAV of the underlying holdings of the IT that held themThank you for your response on this. So is it the share price that determines the profit you make in an investment with an IT? As an example, I have a small holding (£5K) in Worldwide Healthcare Trust and it has performed well but mostly the share price is higher than the NAV?0 -
Simplistically, the share price determines the cost that you pay when you buy and the value you receive when you sell, the difference is your profit or loss irrespective of NAV (plus of course any dividends you may have received while you held them). Slightly less simplistically, all things being equal the share price will reflect changes in the underlying NAV, so if you bought at a 5% premium or discount and sold at the same premium or discount your profit or loss will be the same as the change in NAV which the share price reflects. However consider the scenario where a star fund manager retires or leaves after delivering stellar returns for many years. The shares you bought at a 10% premium could become worth a lot less if sentiment towards an new unknown manager moved that premium to a 10% discount. This could happen with no change at all to the NAV of the underlying holdings of the IT that held them
And that's why buying property, infrasture etc can be better to buy under an investment trust (rather than an OEIC), since the Investment Trust is not forced to sell the investments when people want their money back.0
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