Vodafone Group Live Discussion

devonplay 11 Jun 2019

Trumped Again! Overall 2.5% (excluding my pension, but including my pension in my overall investment pot). I also hold debt through a number of IT’s, for example I believe HHI has been beefing up it’s debt holdings. The cleaner play is dividend across 2 IT’s, 4 direct lending platforms and WiseAlpha where I hold 32 mixed fixed income positions. That percentage would of course grow if I included long term “income” funds/IT’s as they all have debt in them and stuff like ALIA (etc) that has governement debt holdings as part of it’s mix. Overtime time I’d like to have that up to double digits. If add to that start-up’s where I hold a mixture of equity and convertables, some interest bearing, that might add another 2%. As far as NCYF goes I wanted to understand the dynamics of a bond fund, and sector in general, so I used WiseAlpha as playround as it allowed me to invest in 00’s rather than 000’s. I’ve found that very useful as it’s helped me think in a slightly different way. I’m also a shareholder in WiseAlpha. My top holdings on the platform now look very much like the top 10 of NCYF. It’s also been interesting exploring a long/short strategy using debt/equity. Overtime I’m hoping WiseAlpha will grow, not only becuase I’ll make money , but becuase it also allows accress to assets that you could only buy in 000,000’s. I guess if I include my pension, income funds etc it would be a lot more than 4.5%. DL

PrefInvestor1 11 Jun 2019

Trumped Again! Hi @J_Westlock, Well there are specific metrics out there for these things, if you google the topic as I did you can find the details. But unless the company publishes the details they aren’t a lot of use for monitoring the companies performance (though they may well use them internally). I guess that LTV is a possible measure, anything much over 65-70% would get me a bit nervous. Big banks will normally have a contingency fund to cover any non performing loans, but a small company like RMDL arent going to do that. I found that Hardman report very useful and interesting in understanding how RMDL manage their operations and it sounded quite good to me. Key features of their operation would seem to me to be secured lending, careful selection of their clients and a rigorous operating methodology. They publish quite detailed monthly reports on their web site and I found it easy to find out the big picture on their loan portfolio and their diversified nature. Overall I am relatively encouraged by what I read, especially when combined with share price performance and dividend yield. I too hold NCYF which I have been happy with. But having looked at them in detail previously things like VSL, SQN and LBOW are not for me. ATB Pref

Eadwig 11 Jun 2019

Trumped Again! PrefInvestor1: Hi @Eadwig, Guessing thats from the bible ? 20 BC = 20 years before the birth of Christ - and no, its not from the old testament either. Horace was a Roman writer/poet type.

J_Westlock 11 Jun 2019

Trumped Again! Thanks @devonplay I will take a further look at these. You reminded me that I have had a dated order in place for NCYF for some time, but it’s well away from the current market price now. Just out of interest, what proportion of these ‘direct lending funds’ (Debt in general); do you aim to have of your whole portfolio?

PrefInvestor1 11 Jun 2019

Trumped Again! Eadwig: "Our sires’ age was worse than our grandsires’. We, their sons, are more worthless than they; so in our turn we shall give the world a progeny yet more corrupt. Horace c. 20 BC Hi @Eadwig, Guessing thats from the bible ?. Not well versed in my scriptures…?. Only one destination for me when Im gone I suspect !. Well my kids certainly had a more affluent and advantaged upbringing than my wife and I had. And that is EVEN more the case for my grandchildren. None of them will have experienced the labour party in full cry with their crazy spending plans, strikes and all of the general benefits of “socialism”. Its only natural for them to be far more liberally minded and green I think. ATB Pref

Eadwig 11 Jun 2019

Trumped Again! PrefInvestor1: As for getting old and having a different attitude to the younger folk, well yes but that’s inevitable isn’t it. Your attitudes are shaped by your experiences and each generation has had (and will have) markedly different lives so are bound to see things very differently. "Our sires’ age was worse than our grandsires’. We, their sons, are more worthless than they; so in our turn we shall give the world a progeny yet more corrupt. Horace c. 20 BC

devonplay 11 Jun 2019

Trumped Again! J_Westlock: Loans are secured against tangible assets or income streams such as receivables. I found it difficult to find out what RMDL owns. They only one that I remember digging around in was Voyage Care [link] Voyage Care is a leading care provider that supports individuals with complex care needs across the UK. The business supports over 3,000 adults and children operating out of 266 cares homes, 22 rehabilitation centres and 13 day centres. In 2017, the business refinanced existing debt and issued £205 million of Senior Secured notes and £35 million of Second-ranking Secured notes, alongside a £40 million equity injection to boost near-term liquidity. With visible and stable earnings and a solid underlying property portfolio with a value in excess of £350 million this is exactly the type of investment RMDL focuses on. The investment participation is £4 million combined across both debt tranches to give an average yield in excess of 8% and a blend of risk across the capital structure. I already owned Voyage for the same reason "solid underlying property portfolio " via [link] with a 10% yield and 11.3% YTM. I came to the conclusion that property is often the ultimate " tangible assets", hence my preference was for LBOW which is a more clean play on that. RMDL has a large exposure to “healtchcare”, I like sector specialists, so my reasoning was that if I wanted to play that angle BioPharma Credit might be the one. In answer to your question about exposure to limited loans, then I think it’s the usual answer, diversifications between funds. Own several. Some of the larger “debt” funds hold 80 or 90 positions. I seem to remember NCYF has 90. I now own a very similar “top 10” mix of NCYF via my WiseAlpha account. That isn’t stopping from planning to buy NCYF and Royal London’s Coprporate Bond fund for my partner’s ISA (on a drip basis). [link] DL

devonplay 11 Jun 2019

Trumped Again! Hi @PrefInvestor1 Yes, we all have different views on risk don’t we, that LTV didn’t worry me too much, if it was over 70% I might feel the same. I’m happy to pay up a little bit more for the ICG experience. Commercial property at the moment looks interesting to me. But as you say, maybe not for your temperament. The price is volatile, but again that doesn’t concerne me over the short term, my take on it is they have migrated the business away from P2P pools, but they are still being clobbered by sentiment. That might make for a good entry pont. I check in on the Fool everyday, I just don’t post that much. I find by the time I’ve caught up with reading the threads I follow I need to get on with other stuff. I’m still buying SSD on WiseAplha and that’s been a really interesting experience. The portfolio I’ve created (some 32 bonds, CoCo’s etc) has a yield just under 8% and YTM of nearly 11%. Minus the platform carry fee of 1%. I’m certainly not over exposed over there. I hope they make it. It’s a really exciting business if they can pull it off. Good luck with RMDL, I hope it works out to be nice and boring for you. DL

J_Westlock 10 Jun 2019

Slight surprise that no comments on price collapse here? mememe: I thought you were with iWeb. Did you transfer to AJBell recently and are you pleased with them I don’t find the new platform as good as the previous one. I have a few Broker accounts. I deliberately separate them to ensure I don’t go over the FSCS fund limit but also to avoid any transfer costs. I didn’t know the old AJ Bell platform but it does the job. I don’t like the way they handle corp actions and usually find their secure messages on them confusing or wrong… and their menu item for them doesn’t always work. Other than that AJ Bell are my second favourite. I guess I’m just unlucky with ISA transfers!

J_Westlock 10 Jun 2019

Trumped Again! Having just read about it… RMDL invests in loans to smaller and medium-sized companies mainly in the UK, but 30% of the portfolio can be invested in currencies other than sterling. Loans are secured against tangible assets or income streams such as receivables. My only concern with a direct lending fund like this that is relatively small is what happens if one or two loans go bad? (If they only have around 10-20 operating at any one time) I don’t know how often this happens but I guess in a downturn it gets more likely. Bring secured doesn’t always mean that much when a company goes bankrupt. I don’t know how to measure that risk with these companies… do you know what metrics to look at? Maybe I should be looking at some of the metrics used to measure it in retail banks.

PrefInvestor1 10 Jun 2019

Trumped Again! Hi @devonplay, Yes I’d picked up on LBOW from some of your previous posts and have already had a quick look. My first take was that the costs were high at 1.93% (if you can trust the KID), LTV very high at 63% and that I didn’t feel very comfortable investing in commercial property (given the brexit situation). I will want to take a closer look at the sort of debt RMDL is invested in. I have also watched developments at VSL and have to say that at first sight that doesn’t look to be going well and the share price looks very volatile. Very high yield but SP down a lot YTD. Not for me. RMDL looks at lot more stable and therefore more suited to my temperament!. I’ve been pretty active over on the Lemon Fool, but our paths haven’t crossed there. Maybe we are operating in different parts of the site ? ATB Pref Copy @J_Westlock

devonplay 10 Jun 2019

Trumped Again! I’m glad you found them interesting. I’ve been increasing my exposure as I reach a point where I want to do less active investment management. Having exposure might also help wth volatility, but it isn’t always dull stuff. For instance I have small % of my porfolio in VSL [link] As you can see that’s anything but boring. It has a near 12% yield at the moment. This might be a good time to add it, but it’s not loved by the market. They published an overview of the business this morning. [link] There’s also a wind up vote every 5 years to consider. Like everything else you have reseach to do. There are also some really interesting plays out there. I have on my long term watch list: BIOPHARMA CREDIT [link] The LSE is showing the yiled at 17.6% That should turn a few heads LOL Certainly not one to bet the family farm on! BioPharma Credit plc provides investors with an opportunity to gain exposure to the fast growing life sciences industry, through a diversified portfolio of loans and other instruments backed by royalties or other cash flows derived from sales of approved life sciences products. BioPharma Credit’s primary objective is to generate predictable income for shareholders over the long term. DL

mememe 10 Jun 2019

Slight surprise that no comments on price collapse here? @J_Westlock, I thought you were with iWeb. Did you transfer to AJBell recently and are you pleased with them I don’t find the new platform as good as the previous one. My transfers to AJBell took no more than 6 weeks that was 3 years ago. I was able to trade until a few days before the settlement date. The transfer from Fidelity to ii took just over a week!! If they both use the Origo system there is no excuse for a delay.

J_Westlock 10 Jun 2019

Slight surprise that no comments on price collapse here? mememe: @Footsie_Explorer, how long did it take to transfer to AJBell and were you able to trade right up to the settlement date? Not what you are asking… but… transferring from a UBS ISA to a AJ Bell ISA took over 3 months. That isn’t unusual for any ISA transfer in my limited experience… they never seem in any particular hurry and that 3 months+ is full of long gaps with zero happening and both ‘sides’ waiting for each other to do something. Frankly… it needn’t take a week if they got their arses into gear.

J_Westlock 10 Jun 2019

Trumped Again! Thanks. Yes, both RMDL and LBOW look interesting and I need to look at these some more. Debt is a sector I have least invested in… in fact I only have some SEQI (soon to be a bit more from their offers). I may well look to invest in some more ‘Debt’… one of the reasons I haven’t is that I find it difficult to establish how risky their loans actually are. I can read balance sheets /understand basic accounts but with these type of trusts I don’t get a good sense of knowing what the future holds for them/what makes them do well or bad. I try to have a diversified portfolio along these lines: Asia 10% Debt 5% Emerging Markets 5% Europe 10% Fixed Income 5% Global 10% Japan 5% Property 10% UK 20% US 10% Commodities 5% Renewables 5%