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Aberdeen Diversified Income & Growth IT
Rishan
Posted: 12 June 2017 12:21:08(UTC)
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Do others have any thought on this? Is it too early to judge it since Aberdeen took over? On the one hand it's a good diversifier and holds a number of different asset classes that an individual wouldn't need to hold, err, individually.

On the other hand it seems very complex to me and I always try to avoid too much debt in my investment choices. Alan Selwood made a great point in another thread about how some people: 'favour investments that avoid derivatives or obscurity of process'.

Whenever I look at it ADIG I come away thinking 'accident waiting to happen', which puts me off. But I am too much in cash since last summer and need to use up my (Aberdeen) ISA allowance.
M&S >
Posted: 12 June 2017 16:19:52(UTC)
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I recently attended a seminar sponsored by A J Bell in which Harry Nimmo of Aberdeen Asset Management gave a very interesting talk on ADIG.

Since coming under Aberdeens management the portfolio is being completely revamped, gearing is down to 6-7% and in my view and that of my colleagues this is an ideal defensive play in these turbulent times.

I asked Harry how he expected ADIG to react in a major down turn and he is confident that there will be a correlation of approximately 30%-40% to each % point downturn in the FTSE - in other words if the FTSE goes down 10% then the expectation is the this trust will lose 3-4%.

As I said a defensive play that will pay a good dividend - I have invested half my own and wife's iSA allowance and so has a colleague.
Big boy
Posted: 12 June 2017 19:28:06(UTC)
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Do we know the mix between quoted and unquoted. What is the LTV and the cost of debt....I see at fair valve the NAV is reduced by about 7p What is the yield and how are the cost of debt and other exs treated ...revenue or capital a/c.
Mr Helpful
Posted: 13 June 2017 07:15:01(UTC)
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Rishan;47859 wrote:

..... But I am too much in cash since last summer and need to use up my (Aberdeen) ISA allowance.


There is a name for this condition : RHINOPHOBIA

"- A term coined by Warren Buffet as "an investors' disease meaning 'the dread of ever having cash"

In fact the word seems to pre-date even the WB usage.

Also suffer from bouts of this affliction.
Don't know of a ready cure !!!
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dyfed on 13/06/2017(UTC)
Rishan
Posted: 13 June 2017 09:36:50(UTC)
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Big boy;47875 wrote:
Do we know the mix between quoted and unquoted. What is the LTV and the cost of debt....I see at fair valve the NAV is reduced by about 7p What is the yield and how are the cost of debt and other exs treated ...revenue or capital a/c.


Annual report and accounts won't be available until the end of the year and portfolio has changed dramatically since Aberdeen took over.

Yield about 5.5 and looks like an expensive debenture (hedged) until 2031, although not really sure what that is.

Also in the asset allocation breakdown - synthetic cash (offsetting index futures). Doesn't sound good to me.

http://www.fundslibrary....ser=hl_website_documents
Big boy
Posted: 13 June 2017 10:36:37(UTC)
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Rishan.... Do we know if the yield is inflated by the debt interest and exs being taken from capital??? Or is it taken from revenue.. You has to watch the smoke and mirrors accounting with some of these Trust which can produce an inflated yield which can sometimes drag investors in.
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Rishan on 13/06/2017(UTC)
Rishan
Posted: 13 June 2017 11:15:11(UTC)
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Big boy;47892 wrote:
Rishan.... Do we know if the yield is inflated by the debt interest and exs being taken from capital??? Or is it taken from revenue.. You has to watch the smoke and mirrors accounting with some of these Trust which can produce an inflated yield which can sometimes drag investors in.


Yes, this is what worries me and I think what had happened to this IT in its previous form. Don't think I'm proficient to read the accounts well enough, but I would normally look at levels of gearing and other loans.

Monthly factsheet states: Allocation of management fees and finance costs - 65% from capital, 35% from revenue. So as this trust is an income play it seems fair to say not much capital growth is possible with this ratio, the long-term 6.25% loan and hedges involved.

All in all I don't think I'll be buying this, at least until I can read the first annual report
Gordon Russell
Posted: 13 June 2017 20:43:09(UTC)
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I think the Kames Diversified Monthly Income fund yielding 5% is a better and proven option.
2 users thanked Gordon Russell for this post.
Hugh M on 14/06/2017(UTC), antigricer on 15/06/2017(UTC)
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