Stepenwolf
24 Jan 2018
Re: am I missing something? Hello Pie EaterWell put. As you say there is a place for JEMI and for me the risk is worth taking for the diversification it offers. I have other ITs with varying levels of risk to balance it out. Over last three years it had kept pace at least with the benchmarkAnd one other thing, related to risk. My view is that these emerging markets are the most dynamic economies and the greater risk is NOT having some exposure to them. Plus we are all (me included I hope) are living longer and so have more time to ride out the inevitable vicissitudes of economic cycles.
PIE-EATER
24 Jan 2018
Re: am I missing something? Marktime,JEMI is one of those that divides people....Something gives me the impression that you are not a fan! In it's defence, it is one of the more conservative EM funds / trusts and does offer diversification. Lets take for example something as "defensive" as NG. Good yield, now some political concerns but a stalwart of many portfolios. Yes it yields more than JEMI but over 5 years the return is the same , and as you say JEMI is 25% better over 3 and much better over 1 year. However, there is another interesting point.....the negative correlation. Conclusion, for ME, there is a place for a small % in JEMI along with the likes of SOI / JAI in the overseas element of our portfolios for diversification of income. (Also interesting to see the correlation , or otherwise of these with uk smaller companies like AIF which I also hold) PE, retired just under 3 years ago at age 52
PIE-EATER
23 Jan 2018
Re: am I missing something? Like %gain, ADIG is new and potentially interesting when paired with SIGT. and Wise Multi-asset income UT (one of the few that does what I believe it says it does).Of course the real test will come when there is a wobble and we see which trusts / funds are skinny-dippingPE
Windlesham Don
22 Jan 2018
Re: am I missing something? An excellent thread with many ideas for further research.However, I'd like to correct any misunderstanding regarding my portfolio target. The quoted 7% is actually 4% real absolute portfolio growth pa (and with inflation currently running at around 3% pa we get to the 7%). I am certainly not looking for ITs yielding 7% as these are likely to be inherently risky. Although I am planning to stop work in the next year my portfolio holds both growth and income ITs, alongside some relatively safe individual companies. I am re-investing all dividends at the moment and the overall portfolio yields around 4%. Growth has been very good over a number of years, with several of my holdings producing mid-teen growth pa over 3-5 years. Even my specifically targeted high yield holdings have grown their SP over this time frame, which is a bonus, but hard to see it continuing much longer in the current environment.My 'ideal' stock would be one that yields 3-4%, grows its SP at slightly above inflation and is ultra low risk - not so many of those around at the moment in my view.The holdings I quoted in an earlier post have grown my portfolio significantly in excess of my 4% 'real growth' target and I still see many of my holdings, both growth focused and HY, as core even into retirement. As has been mentioned by others before, the key for me is absolute return, but as I get older then the amount of risk I am prepared to take on board is decreasing.Best of luck to all,
marktime1231
21 Jan 2018
Alteratives for income EAT is equity income. Alternative property / fixed income trusts like CMHY have reasonably attractive yield and are judged to be low risk compared to blue chip equities. Not many yielding in WD's 7% target range though. And in some cases fixed interest is higher risk albeit without the volatility.Some income trusts offer super high yield with added excitement ... often US hedge fund managed investments in low grade debt called CLOs, CDOs or ABSs. In a strong economy the chance of default is lower, in a broad portfolio the winners should offset one or two strugglers, and if there really is a hard asset behind the debt then you can recover some of the loss on failure. A bit like corporations bundling a few distressed mortgages in with a normal portfolio of loans and selling the parcel on to other corporations ... or in the case of Investment Trusts, selling them on to retail investors. You lose sight of what you are investing in, but in good times you might be tempted.I have been watching a handful including ...FAIRSQNCIFUSIHLNCYF maybe shouldn't be in this list because it is mostly invested in UK blue chip debt, and is highly rated by the likes of Morningstar so it trades on 5% premium. NAV is going nowhere, fees are high so payout is barely covered by revenue. The prospect of at least 6.5% yield is pretty good though, Balfour Beatty aren't going bust after all, and this meets most of my criteria ... if only the premium would fade, maybe it will on the prospect of interest rate rises. A strong candidate for me.For good reason not all these trusts are considered to be suitable for UK retail investors. A quick check and I realise I am invested indirectly by way of holdings in trusts which invest in a basket of trusts themselves. Would I risk a direct bet though? Not so far.Well CIFU has interested me because a recent repurchase scheme and factors I don't understand have stretched the sp to NAV discount to the point where the yield is up to 13%. So is FAIR in its 2017 incarnation for reasons I don't understand. Shrieking value-trap or worth a gamble ... actually I can't even select CIFU for my watchlist, it must not be considered suitable.The advice I have read about these is that you should imagine not getting your stake back ... so a bit like an annuity, but at twice the payout rate. Even with a flat NAV you would break even in 7-8 years. Except there is also USD GBP risk to factor in. And volatile sentiment which swings the sp around independent of NAV. And you might lose your stake and your income sooner rather than later. And that underlying stake in Bing Bong Air Leasing may go bust without assets after all.So the wise commentators say only take small positions in these gambles which look too good to be true. Or leave well alone.Be content with 6% or 7% income.
marktime1231
20 Jan 2018
Re: am I missing something? Not for me, I would not be looking for retirement income from emerging markets whatever or wherever they are. My view on 18 months, 3 years and 5 years is that JEMI compares pretty badly on growth, except where you chose to start counting from its deep trough 2 years ago. Divi has been flat for years so % yield is shrinking and is only half WD's 7% target. Volatile, unpredictable, risky, expensive. Apart from that ...
Stepenwolf
20 Jan 2018
Re: am I missing something? Hi EverybodyLike several people I have several IT’s to cover all markets to spread risk. I don’t think emerging markets can be ignored. I have JEMI which currently yields 3.5% with a small discount (used to be more) and has returned 68% with Dividend reinvested in two years. I think an excellent trust to give you diversification into emerging markets.
Windlesham Don
19 Jan 2018
Re: am I missing something? marktime1231 - Interestingly, after our conversation on the BRCI board a few months ago I have kept them on my monitor list. I've noticed that over the last 3-6 months they have at least kept pace with BRWM, and with a better yield.I was going to take a closer look at whether it may be worth swapping holdings...
marktime1231
19 Jan 2018
Re: am I missing something? Terrific conversation.WD may have to change your name to Mr 7%. I thought I was being ambitious targetting 6% and only came close with 5.7% last year. You can't do it without taking more risk and betting on single stocks, or in the case of trusts you sacrifice underlying growth for the promise of high yield ... so CTY plods on at 4% income + 4% growth while SMIF yields as much as 6.5% but stalls on growth (after a good spurt).MRCH has regained momentum, CMHY has stalled, NCYF and ASLI have quite a premium, all candidates for this year's SIPP contribution. Or I might go back to adding BRCI if they restore dividends to 6%. Or punt on SQN recovering.Not even high yield blue chips are steady bets these days ... NG, SSE, GSK, MKS and the like where you have to trade like mad to limit capital losses ... but LGEN has been a good pick, LLOY looks promising and I hold BIFF on potential. GFRD is on my study list.
Windlesham Don
19 Jan 2018
Re: am I missing something? Many thanks to everyone for sharing.To complete my major portfolio holdings I balance income with growth and sector diversification as follows:ITs - SMT, FGT, HINT, BRWM, TEM, FMPI, JETI.Companies - RDSB, AV., VOD, HSBA, GSK, MNDI.
BeaglePup
19 Jan 2018
Re: am I missing something? What a marvellous topic thread, so interesting and useful. I'm 61, still at the grindstone for a couple more years but gradually moving some holdings into income IT's with some growth alongside stocks and trusts for pure growth. Main holdings:EAT (planning to add to holding)NCYF (steady income growth minimal but bond based)HFEL ALAI (decent income and betting on Latin growth medium term)BRWM (good growth recently, thinking of shifting into BRCI to reduce risk)plus main share holdings:HSBALLOYothers being traded
Bahia Prince
19 Jan 2018
Re: am I missing something? "My holy grail is an investment that can consistently yield 4% AND do the same again in average annual capital growth. " - FWIW I absolutely agree with percentage gain on this; any bigger return is an absolute bonus.WD - I also am 57, and took early retirement last year.In addition to EAT, key income IT's currently in my portfolio are:HHICTYFMPIFCPTMRCHIVIPLIAll of these are yielding (for me anyway) between 3.8% and 5%, and all currently are in profit (and long may that continue).I also have individual holdings in:LLOYGSKLGENIMB (significantly under water at moment)PHNXBT (unfortunately)BP.Interesting topic to share on.All the best.
percentagegain
19 Jan 2018
Re: am I missing something? Among income stocks:CTY is my single largest income holding. c4% pa yield. Strong and consistent annual capital growth.MRCH, HHI, HDIV, CMHY, HICL pay c5% divs (but not growing). The capital performance okay but nothing spectacular.TIGT, SIGT, HINT, EDIN, DIVI pay c3.5% with similarly solid but unspectacular capital return.UEM c3% yield, capital performance nothing flashy but useful emerging markets exposure.FCPT, PCTN, MYI c4% with little capital return recently.TRY & JETI just under 3% yields but with good capital return.SDV, JAI, JPGI, JCH pay c3.5% with very healthy capital outperformance. ADIG new holding, paying 4.8%. Jury currently out.Ditto ASLI.Also have biggish positions in RDSB and LGEN.Lastly two OIECS; TB Wise Income and Premier Multi Asset Monthly Income. These yield c5% but current capital return small/non exsistent.Rest of portfolio in growth focused funds - SMT, FGT, HEFT, FRCL, WTAN, EWI, MNKS, HSL, JESC, FCS etc
marktime1231
19 Jan 2018
Re: am I missing something? I get my other income fromBRCI where the "income" is from trading as well as natural yield, same as EATSIGT naturalSMIF naturaland some bonds(I tried others and got fed up eg TIGT, HFI, IPMIP, FIGT. Some of your picks have been on my study list but never made it to the portfolio.)and to a lesser extent some income fromCTY naturalMYI naturalRDI naturalI also gamble on a spread of high yield single stocks, with mixed fortunes.That was an understatement.
Windlesham Don
19 Jan 2018
Re: am I missing something? A very interesting debate on here.I am 57 and will be stopping work in about a year. My aim is for a return of around 4% above inflation, so around 7% pa at the moment. I also believe in absolute return as the key driver, but feel that 'safe' dividends are a key part of absolute return. Obviously, the word 'safe' is key, as the short to mid term vagaries of the market can be ignored if income is secure.Sadly, of course we can never truly know what is 'safe'...I also would like to source income from diversified markets, and so I am holding IPE, NCHY, CMHY, HFEL, MRCH, SHRS, JAI, HDIV, FCPE, AEWU and ASLI for income. These are part of a portfolio comprising 30+ ITs and individual shares.If anyone else has ideas regarding income ITs then I'd be interested to hear.Regards and DYOR,
