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ITs for regular investment ISA
PeteDavis
Posted: 21 September 2017 12:27:10(UTC)
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I am 29 and finally getting around to setting up a regular investment ISA that I plan to restrict to Investment Trusts only. I don't have a lump sum to invest and plan on investing about £200 a month from left over income. With a small sum to invest each month I don't want a portfolio that is made up of many different ITs, but would prefer 6 or 7 strong holdings that I can slowly invest in over time and build up the value of my portfolio. I am looking for suggestions as to what these 6 or 7 ITs should be. I have my own ideas in mind, and will of course do my own research, but I'd be interested in hearing what the community also thinks!
Thanks for the help.
Tim D
Posted: 21 September 2017 13:39:20(UTC)
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PeteDavis;51287 wrote:
I am 29 and finally getting around to setting up a regular investment ISA that I plan to restrict to Investment Trusts only. I don't have a lump sum to invest and plan on investing about £200 a month from left over income. With a small sum to invest each month I don't want a portfolio that is made up of many different ITs, but would prefer 6 or 7 strong holdings that I can slowly invest in over time and build up the value of my portfolio.


Seems like you'll be spread very thin to me. What's your platform's dealing costs and what's your actual plan for the mechanics of investing? (Spreading 33 quid around 6 things each month using some "regular investment" deal? Or investing in one thing with a couple of months contributions, then moving on to the next target next time?) Personally with that level of contributions I'd be thinking about sticking to just one or two things maximum for at least a year to a least get some "weight" into them, and only then consider how to diversify. Useful question to ask might be "if I could only hold one or two trusts, what would they be?" then go for just those initially.

Hmmm this site is being super-flaky today; "500" errors on half the forum.
PeteDavis
Posted: 21 September 2017 14:01:41(UTC)
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Tim D;51291 wrote:
Seems like you'll be spread very thin to me. What's your platform's dealing costs and what's your actual plan for the mechanics of investing? (Spreading 33 quid around 6 things each month using some "regular investment" deal? Or investing in one thing with a couple of months contributions, then moving on to the next target next time?) Personally with that level of contributions I'd be thinking about sticking to just one or two things maximum for at least a year to a least get some "weight" into them, and only then consider how to diversify. Useful question to ask might be "if I could only hold one or two trusts, what would they be?" then go for just those initially.

Hmmm this site is being super-flaky today; "500" errors on half the forum.


It would definitely be the latter: I'd invest in only one (or perhaps two) ITs each month, aiming to slowly build up the portfolio. The dealing charges are £1.50 for each regular investment. Without a lump sum, this is the only way in I can see! You're probably right about just picking two to start with and slowly building from there, however. What would you suggest those two should be, and what would you diversify into later?

Thanks for the help, and I am also getting the 500 errors everywhere!
AJW
Posted: 21 September 2017 14:30:59(UTC)
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You could start out investing in funds, which can be free to deal (useful for smaller investment amounts).

Otherwise, I'd suggest Scottish Mortgage Investment Trust to begin with. But read other responses and do your research. The joy of starting out is you have less investment to lose, so get stuck in and make your mistakes now rather than later.
Catch The Pigeon
Posted: 21 September 2017 14:55:04(UTC)
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AJW;51293 wrote:
You could start out investing in funds, which can be free to deal (useful for smaller investment amounts).

Otherwise, I'd suggest Scottish Mortgage Investment Trust to begin with. But read other responses and do your research. The joy of starting out is you have less investment to lose, so get stuck in and make your mistakes now rather than later.


As per above, I'd put the whole £200 into SMT each month.

Let that build up to a few thousand and then introduce another IT.
Amateur hour
Posted: 21 September 2017 15:20:11(UTC)
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I'd go for CTY and FMPG. The former is a really solid UK focussed IT with a fifty year record of growing dividends. The latter is unusual in IT world, the growth element of an IT fund of funds, which would give you access to lots of the sexier ends of the investment spectrum. If you think that markets are toppy ADIG might make an interesting alternative to CTY.

Good luck, whatever you decide...
Captain Slugwash
Posted: 21 September 2017 16:06:22(UTC)
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Just 2 for me, CTY for UK and MYI for global.

Low fee steady eddies with a reasonable dividend, which I feel is all important to encourage a new investor who may get disheartened by a red screen.
Jim Thompson
Posted: 21 September 2017 16:30:36(UTC)
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Have a look at Baillie Gifford's own web site. They do their own savings scheme, and have some good funds and IT's to choose from. The paying in part is free subject to minimum contributions, and you would pay an annual ISA charge. If you lose faith with it you could open up another isa elsewhere in the following tax year.

I have never looked into the monthly contributions thing for a fixed fee, but if you go for all of the market, perhaps Witan and SMT might suit. Or Bankers and City of London.
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Keith Cobby on 22/09/2017(UTC)
TJL
Posted: 21 September 2017 18:34:10(UTC)
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Congratulations on a wise decision to become an investor.
Unless you make daft choices and take stupid risks (i.e. getting rich slowly is more reliable than trying to get rich quick), you should reap the rewards in times to come - becoming an investor about 20 years ago by investing spare capital, now underpins our whole lifestyle.
I agree with earlier posts; SMT, CTY, BNKS (I chose MNKS instead), MYI etc.
I would add FGT, but if you do some research you will see that there are several others, all highly thought off and successful over time.
I would also say, that if you choose a global IT, it will give you immediate diversification, but you should check where it invests (e.g. MYI is heavier than some in emerging markets).
Don't underestimate the effect of charges, and if trying to choose between two potentials which are in all other respects comparable, choose the cheapest.
If you have a mortgage, consider overpaying it to the limit as another option.
Good luck.
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Tim D on 21/09/2017(UTC)
Tim D
Posted: 21 September 2017 19:44:39(UTC)
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ATS put out some interesting monthly lists of where their punters have been putting their money. Here's the trusts list. Has been the same usual suspects in the top 3 for the last few months now (PNL, SMT and ATST; perhaps representing fear, greed and... a nice cup of horlicks before bedtime?).

Not sure if other platforms put out similar lists. There was a recent article on HL and they do have a list for funds.

Not that I'm saying following the herd is a good idea, but it's interesting to see where they're going.
Tyrion Lannister
Posted: 21 September 2017 20:49:49(UTC)
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Have you thought about an ETF as an Initial core fund?

I'd start with VWRL with the intention of building a portfolio of ITs around it.

The first IT I'd invest in would be either HSL or FCS, either would be a perfect complement to VWRL imo.
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Bellabeck on 28/09/2017(UTC)
Keith Cobby
Posted: 22 September 2017 08:22:16(UTC)
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As Jim suggests I also would recommend the Baillie Gifford investment plans and those offered by F & C. Access to some good trusts at a low cost.
P L
Posted: 22 September 2017 08:37:19(UTC)
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Aberdeen also do a cost effective investment plan
Inderpal Singh Khalsa
Posted: 22 September 2017 09:13:48(UTC)
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Aberdeen offers a range of ITs in their investment plan. For UK income paying MUT and for international MYI are worth considering.

F&C - Foreign & Colonial Investment Trust, F&C Global Smaller Companies are popular choices with good track records.

Baillie Gifford- SMT, Monks, Baillie Gifford Japan, Shin Nippon are worth considering.

Regular investment is £100 monthly for each trust in ISA.

Good Luck!!
P L
Posted: 22 September 2017 09:33:05(UTC)
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As an aside if you prefer to invest ad hoc rather than via a regular investment plan you might want to take a look at Digero (www.degiro.co.uk).

dealing fees £1.75 + 0.004% and no account / inactivity fees.


Drawback is they are a Dutch outfit, so covered by the Dutch compensation scheme, albeit still registered with the FSA. So only 20,000 Euro cover as opposed to £50,000.

However, given like all platforms the ownership of the shares is segarated from the dealing platform the main risk being covered is wholescale fraud or reconciliation mistakes rather than company failure.
P L
Posted: 22 September 2017 09:46:58(UTC)
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... and if you really want to live on the edge

Trading 212 (www.trading212.com)

£1.95 + 0.05% with 10 commission free deals a month.

Not sure if they support all shares on the UK markets.
Also I think they might charge for depositing funds - depending on how it is done.
Rishan
Posted: 22 September 2017 11:04:52(UTC)
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Also recommend Baillie Gifford, as I use their share plan for one of my platforms. Very low cost and SMT is one the best ITs going.

If I was starting out again I would look no further. And as others have said the Aberdeen and F&C share plans/ISAs are also very good and with a wider choice of ITs if you might eventually need higher dividends, private equity, commercial property ITs.

Only downside to these platforms is you are limited to their managed ITs only, but there are enough good ones and I find too many holdings is unnecessary. Would also recommend sticking to one or two ITs at this stage.
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Keith Cobby on 22/09/2017(UTC)
JohnW
Posted: 22 September 2017 19:34:17(UTC)
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Investment is a long term thing. When I started the max you could invest in an ISA (PEP in those days) in a year was £1000. For money I used the money I saved by giving up smoking. I decided that the minimum worthwhile size for a holding was £6000 so for the first few years I invested each year in the same core trust. And for that I selected CTY. It wont make you a millionaire but it wont cause you sleepless nights. When I hit £6000 I selected a second trust and that time I selected a global trust, (Monks at that time, but now I prefer WTAN) When I had £6000 in there I started a third IT, looking for something more exciting this time. and so it went along. For a long time I held a maximum of 10 trusts, although now I've upped the total to 12 trusts, but this is on a portfolio of over £250K, so you can see how fag money builds up in time!

John
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Guest on 22/09/2017(UTC), Captain Slugwash on 22/09/2017(UTC), Sara G on 24/09/2017(UTC), Tim D on 25/09/2017(UTC)
william barnes
Posted: 24 September 2017 10:15:53(UTC)
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As has been said many times before build up a reasonable sum then add another trust.all the trusts mentioned are all good steady funds.most have had good and bad streaks but are all steady funds.l started in 1994 with a monthly dd to f and c investing in their frcl and fcs funds.obviously auto reinvesting the dividends.i can assure you if you stick with it over a longish period it will certainly perform over time.whether you choose any of the inv trusts mentioned doesn't really matter.
Just get investing monthly.
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Keith Cobby on 24/09/2017(UTC), Guest on 24/09/2017(UTC)
PeteDavis
Posted: 28 September 2017 10:17:00(UTC)
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Many thanks to everyone for their invaluable advice - I certainly have plenty to think about and research to do. I think I am going to take the approach of initially building up a holding in a single IT, and then once that has reached a decent size, I'll add a second to the portfolio, and so on and so forth until I have a decent portfolio built up.
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