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UK equity income IT
Tyrion Lannister
Posted: 20 October 2017 17:25:26(UTC)
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I have just one UK equity income IT in my portfolio, SDV, which is heavily biased towards small caps.

I want to invest in just one more that would take in larger caps such as RDBS, HSBA, RIO etc. The exact stocks don't matter too much, the key would be to compliment SDV.

I'd be looking primarily for a decent income but total return would also be important.

If you had to choose just one fund, which would it be?


(Edit: Mods, apologies but I've already posted this under "funds" which was a mistake, pls could you delete that one?)
Mr Helpful
Posted: 20 October 2017 17:43:11(UTC)
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Either SCF or CTY might suit?
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Tyrion Lannister on 20/10/2017(UTC), The Spanish Inquisition on 21/10/2017(UTC)
Tim D
Posted: 20 October 2017 17:46:58(UTC)
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Tyrion Lannister;52184 wrote:
I have just one UK equity income IT in my portfolio, SDV, which is heavily biased towards small caps.

I want to invest in just one more that would take in larger caps such as RDBS, HSBA, RIO etc. The exact stocks don't matter too much, the key would be to compliment SDV.

I'd be looking primarily for a decent income but total return would also be important.

If you had to choose just one fund, which would it be?


One of CTY or MRCH depending which one's holdings/discount/yield you most like the look of. Besides the larger cap orientation I couldn't begin to think of how they might complement SDV in particular... other to note that their relatively low charges (especially CTY) would help dilute the impact of what you're paying SDV.
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Tyrion Lannister on 20/10/2017(UTC), The Spanish Inquisition on 21/10/2017(UTC)
Chris Howland
Posted: 20 October 2017 20:13:04(UTC)
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+1 for CTY - one of the most dependable Investment Trusts I own.

I also agree with Tim D's comment - low charges are important. The management team at Henderson are also very good and report each month on the market and any action they have taken.

Dividend reserves run to eight months (and this increased from that reported last year) which is also reassuring.

Chris
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Tyrion Lannister on 20/10/2017(UTC), The Spanish Inquisition on 21/10/2017(UTC)
Captain Slugwash
Posted: 20 October 2017 20:47:38(UTC)
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I use CTY for my daughter, a popular choice which shouldn't lose you any sleep.

I also like the look of MUT & MRCH, but they are usually quite similar in make up.
Not fussy on SHRS as it is heavy in financials.

That aside have you thought of a Global such as MYI for a more international look? Yield is similar.
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The Spanish Inquisition on 21/10/2017(UTC), Tyrion Lannister on 21/10/2017(UTC)
The Spanish Inquisition
Posted: 21 October 2017 07:50:53(UTC)
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My pf CTY 5% for UK equity income & growth
MUT 6% for UK high yield eq. inc.
HHI 3.5% for UK high yield eq. inc.

CTY has a good record of divi increases and rising share price
MUT has a low divi increase and share price has risen slowly but steadily
HHI this I added recently only for its yield, poor or static divi increases, share price has performed ok over time, but static since my purchase haha.

All the above are above there 07 high,a must for me, showing they can recover from major setbacks and don't pay the divi at the expense of your capital, they also have reasonable fees.

CTY seems to fit your criteria and would be and is my current choice.
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Tyrion Lannister on 21/10/2017(UTC)
colin overton
Posted: 21 October 2017 08:04:50(UTC)
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Although an UT rather than an IT, I have recently bought TM Cavendish Aim Fund. It's made a profit in each of the last 5 years and beaten the Aim100 and FT100 indeces. I guess there is a worry that the "golden years" of small cos has come to an end and the next 2-3 years are uncertain - ask Neil Woodford!!!
I would have thought that capital growth was a more likely goal, than income, for smaller cos?
I'm also looking to buy Marlborough UK Micro Cap Growth, another UT.
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The Spanish Inquisition on 21/10/2017(UTC)
The Spanish Inquisition
Posted: 21 October 2017 08:35:53(UTC)
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colin overton;52214 wrote:
Although an UT rather than an IT, I have recently bought TM Cavendish Aim Fund.


I run my stepsons pf for him, he's only recently started to invest a little monthly so oeic's make the most sense charges wise, and use Thredneedle UK equity income acc. as the CTY proxie fund. Happy with this choice for a long term investment.
Nigel Meek
Posted: 23 October 2017 14:41:38(UTC)
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Yep CTY every day of the week. Have held for about 6 years now, and yield on cost is 6.14%. A real buy and forget for me.

I added MRCH just over a year ago, and hold EDIN in my SIPP. The latter has been a bit disappointing, but will persevere.
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martin hargan on 23/10/2017(UTC)
william barnes
Posted: 23 October 2017 15:00:28(UTC)
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I’d go for one of the inv trusts mentioned ie cty and mrch.
Or one of the following mit,dig,pli.eit or any inv trust in the uk inc growth sector
Keith Cobby
Posted: 23 October 2017 16:08:15(UTC)
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I had held CTY for many years but sold a couple of weeks ago. Although there have been small increases in dividend for a long time (no small achievement) the NAV is increasing very slowly, and although I haven't crunched the numbers, it seems to be slowing over time. My concern was that capital was being sacrificed to preserve the dividend. The portfolio contains the usual suspects and I think it is basically a lowish cost closet tracker.

Even for those investors who need an income, I think you have to look at total return first and only then consider the yield. Fair enough if you are not bothered by some erosion of capital, but for investors looking at the very long term, CTY and many other constituents of the UK Equity Income sector look poor value to me.
4 users thanked Keith Cobby for this post.
Vince. on 23/10/2017(UTC), Micawber on 23/10/2017(UTC), Tyrion Lannister on 23/10/2017(UTC), Sara G on 23/10/2017(UTC)
Tom Mozy
Posted: 23 October 2017 17:23:32(UTC)
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I use SLET, Shires, and JCH for my 10% weighting of UK equity income in my IT portfolio
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Tyrion Lannister on 23/10/2017(UTC), Mickey on 23/10/2017(UTC)
Blue S
Posted: 23 October 2017 18:27:04(UTC)
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A useful site for research is the Morningstar X-Ray tool at
http://tools.morningstar...s.aspx?LanguageId=en-GB
In the free version you can put from 1 to 10 investments trusts into the tool with the % required and get lots of info.
There are several screens in the "select a view" dropdown but it will tell give you the style/size analysis plus the top 10 stock overlaps as well as lots of other useful info.
This will allow you to see the % of large companies in an IT.
I found a few years back that there seemed to be a positive correlation between performance and the % of smaller companies held so it was difficult to compare performance of equity income ITs correcting for the market cap of stocks held. Not sure if this still applies.
For the record I use SCF in my SIPP for UK Equity income from large companies.
JohnW
Posted: 23 October 2017 20:59:21(UTC)
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CTY was the first trust I ever brought, and I still hold it. Increased it's dividend every year for over 50 years. It wont make you a fortune, but it also wont keep you awake at nights worrying.
Tug Boat
Posted: 23 October 2017 21:32:15(UTC)
#15

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I hold DIG, SLET, TMPL and Threadneedle UK Equity Income.

One is likely to get dumped in the new year, probably TMPL. One I'm happiest with is Threadneedle.
Sinic
Posted: 23 October 2017 22:23:33(UTC)
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TMPL (Temple Bar IT) and MRCH (Merchants IT) have both recovered from the doldrums as value investing has come back into fashion. Neither is exciting but both are relatively safe along with CTY (City of London IT). I hold all three.

Personally with the ups and downs of Brexit and the growing risk of a Marxist led Labour Government I see real danger in favouring UK investment and I am shifting steadily into international ITs notably SIGT (Seneca Income and Growth IT), MYI (Murray International IT), WTAN (Witan IT) and SCAM (Scottish American IT). I also have holdings in Artemis Global Income UT and Newton Global Income UT.
4 users thanked Sinic for this post.
Mickey on 24/10/2017(UTC), Alex Peard on 24/10/2017(UTC), The Spanish Inquisition on 24/10/2017(UTC), Keith Cobby on 24/10/2017(UTC)
Joe Soap
Posted: 24 October 2017 09:24:49(UTC)
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Well, a first ever for me. I have no income trusts or funds in my ISA/SIPP portfolio. I too am focused on a small cap stocks fund but a growth oriented fund, I hold Chelverton Growth Fund. For large caps I hold Fundsmith.

For the first time ever, I hold a physical gold ETF. And for the first time in a very long time, I hold a property investment, Regional REIT.

I have about 25% in cash.

Why? I think many/most income generating stocks are over bought and further growth may be hard to find or pedestrian at best. Hence a complete turn round for me over the last few months.
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Mr Helpful on 25/10/2017(UTC), Keith Cobby on 25/10/2017(UTC)
jvl
Posted: 24 October 2017 09:56:34(UTC)
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IVI, KIT - both trading at discounts of over 10%, 3-3.5% yield, fairly low charges.
Also LWI.
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Tyrion Lannister on 24/10/2017(UTC)
Tyrion Lannister
Posted: 24 October 2017 18:56:53(UTC)
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jvl;52299 wrote:
IVI, KIT - both trading at discounts of over 10%, 3-3.5% yield, fairly low charges.
Also LWI.


LWI has never been on my radar but it's recent performance looks pretty impressive, so why the discount I wonder?

The one downside is its relatively low dividend for an equity income fund.
Mr Helpful
Posted: 25 October 2017 07:42:57(UTC)
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Joe Soap;52298 wrote:
Well, a first ever for me. I have no income trusts or funds in my ISA/SIPP portfolio. I too am focused on a small cap stocks fund but a growth oriented fund, I hold Chelverton Growth Fund. For large caps I hold Fundsmith.

For the first time ever, I hold a physical gold ETF. And for the first time in a very long time, I hold a property investment, Regional REIT.

I have about 25% in cash.

Why? I think many/most income generating stocks are over bought and further growth may be hard to find or pedestrian at best. Hence a complete turn round for me over the last few months.


Curiously we have tilted away from growth to income, as our portfolio's defensive measure response to elevated valuations!
One (or neither) of us may prove to be correct?
With you on RGL and Cash.

Thanks for the insight.
Food for thought!
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Joe Soap on 25/10/2017(UTC)
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