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Thoughts on income funds RECI and JLIF?
Jezzer
Posted: 08 November 2017 16:35:06(UTC)
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Hi folks

I've liquidated a couple of underperforming funds in my SIPP and ISA and am looking for a home for the cash. Given that I recently retired and have what I feel is 'enough' in equities, bonds and property, I'm looking at alternative asset classes, to provide diversification, seeking to put 5% of my portfolio into each fund of this type, to keep risk at a reasonable level. I'm also looking for yields c.5%. I've reviewed HICL, JLIF and 3IN, which I did a couple of years ago and rejected back then due to the very high premia on all three funds back then. I've also looked at RECI, which invests in asset-backed loans (on property)

I feel that the premia and yields on HICL and 3IN are still unappetising, but JLIF looks a lot better at the moment, with a yield of 5.6% and premium of just 4.5% (according to HL's website). However it seems to have taken a bit of a nosedive recently, the shares being down more than 10% in the last 6 months. Do the readers on this forum think that this a problem with the fund (which I can't see) or a buying opportunity?

http://www.hl.co.uk/shar...-gbp0.0001/share-charts

On RECI, the yield is 6.4% and the premium to NAV is 5.2%, which is a fair bit higher than the recent average premium to NAV, but is perhaps a reflection of the fairly positive outlook for the asset classes its invested in. The AMC is 1.25% of net assets but combined with its performance fee, has worked out at 2.29% over the last FY. However as I understand it, the yield is over and above this. The NAV is holding up reasonably well despite the fees and, following a calamitous crash in 2008 has since been on a fairly steady upswing, in the main.

http://www.hl.co.uk/shar...investments-ltd-ord-npv

I'd be interested in views on both JLIF and RECI or any other alternative asset funds yielding 5% or thereabouts.

Tug Boat
Posted: 08 November 2017 20:55:36(UTC)
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I have held RECI for a couple of years. It pays a good divi and has just paid off some debt. Been looking for it to drop to 165 as wanted to top up, but it is going slowly up.

Other high yielding stuff I hold that are a bit different: TFG, TORO and BGLP. The last two come with a health warning.

AX207024470GBThere are a number of REITs and a few bond funds that pay over 5%.


3 users thanked Tug Boat for this post.
Jezzer on 09/11/2017(UTC), what me, worry? on 10/11/2017(UTC), dlp6666 on 13/11/2017(UTC)
Mr Helpful
Posted: 09 November 2017 12:14:06(UTC)
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Some thoughts :-

JLIF : Some time since looked at in detail, remember rather UK heavy, interlinked with JL construction side?
3IN : We hold but seems fully priced.
RECI : Interesting. Very small outfit, short history, financials not obvious. But then as noted is 'Property' heavily related which was not preferred?
TRIG : circa 5.8% yield, but this Renewable Energy stuff is all relatively new.
BBGI : circa 4.5% yield, might be worth comparing underlying holdings with JLIF.
GCP : circa 6% yield, but again debt!
SEQI : circa 5.3% yield, ditto

Keep us informed as thoughts develop.
4 users thanked Mr Helpful for this post.
Jezzer on 09/11/2017(UTC), North Star on 09/11/2017(UTC), what me, worry? on 10/11/2017(UTC), dlp6666 on 13/11/2017(UTC)
Jezzer
Posted: 09 November 2017 12:54:06(UTC)
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Mr Helpful;53051 wrote:
Some thoughts :-

JLIF : Some time since looked at in detail, remember rather UK heavy, interlinked with JL construction side?
3IN : We hold but seems fully priced.
RECI : Interesting. Very small outfit, short history, financials not obvious. But then as noted is 'Property' heavily related which was not preferred?
TRIG : circa 5.8% yield, but this Renewable Energy stuff is all relatively new.
BBGI : circa 4.5% yield, might be worth comparing underlying holdings with JLIF.
GCP : circa 6% yield, but again debt!
SEQI : circa 5.3% yield, ditto

Keep us informed as thoughts develop.


Thanks for these ideas. Will take a look. I note your point about RECI being property-related (although not directly investing in property like FCRE and BBOX, which I hold) - I was originally looking at TFIF which was mentioned in a recent copy of MoneyWeek, until I realised that it's investing in exactly the type of instruments that were behind the financial crisis - "asset backed" securities like securitised mortgage loans and even credit card loans (which are widely expected to be at the root of the next financial crisis). RECI was mentioned as it's "nearest competition", although the assets seem very different. I don't know, maybe given the increased regulation in the market since 2008, TFIF is invested in an area worth looking at. I recall the market generally avoiding tech shares for at least a decade after the dot com bust, but look at them now.

I have long liked the look of JLIF and it seems to have fallen significantly in value, to the point where the premium seems almost reasonable - certainly compared to 3IN (16.5% premium) and INPP (13%) for example. I'm just wondering (a) why? and (b) what happens to the premia on all these funds when interest rates reach 3, 4 and 5%? Looks like a recipe for capital losses, although that could be 5+ years away and by then I would hope to have gained a decent return from the yield.

On the renewables front, FYI, I've been in FSFL for a while (it's XD today as it happens) since March this year. The price is about the same as it was then and it's yielding 5.8%.

More as I have it..

Cheers
Jez
3 users thanked Jezzer for this post.
Tim D on 09/11/2017(UTC), Mr Helpful on 09/11/2017(UTC), what me, worry? on 10/11/2017(UTC)
Jezzer
Posted: 09 November 2017 14:48:02(UTC)
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I've bought some JLIF (5% of pf) while in the process of rebalancing. I will continue to think about 1-2 other funds and in the meantime sit on the cash, which feels OK for a little while, as Donald Trump travels the world upsetting people.

Look forward to more thoughts and ideas from the learned folk up here in the meantime.
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what me, worry? on 10/11/2017(UTC)
Mr Helpful
Posted: 10 November 2017 11:54:57(UTC)
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One other thought.
Does Commodity Income feature yet in the portfolio?
While BRCI (Commodity Income) invests in Stocks, its' share price traces a very different path to mainstream indices. So a good diversifier with income, 5.3%ish.
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dlp6666 on 13/11/2017(UTC)
what me, worry?
Posted: 10 November 2017 18:15:59(UTC)
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hicl might be worth a look. its paying around 5% and the premium is coming down slowly.
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Jezzer on 10/11/2017(UTC)
Peter59
Posted: 12 November 2017 17:45:14(UTC)
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JLIF and HICL are stuffed with PFI contracts which Labour may Nationalise if they are elected. It explains some of the recent price falls. 3IN is not and is doing very nicely indeed. With all investments you really do have to look closely at the where the portfolio is invested, a current yield may seem attractive but might be built on a pack of cards.

After dramatic falls in commodity prices, BRCI cut the yield as the share price had fallen so much. However, there might be a special place for BRCI and commodities to hedge against inflation and recent share price increases might suggest this. It`s hugely volatile so perhaps don`t get too carried away.

TRIG is the largest renewable IT and seems the most diversified. Along with a sustainable income stream, part of their remit is capital preservation. I wonder if that comes with a guarantee?!

Any non-equity investment is most likely to be heavily reliant on debt and therefore more sensitive to movements in interest rises.
4 users thanked Peter59 for this post.
Mr Helpful on 12/11/2017(UTC), Jezzer on 12/11/2017(UTC), Tim D on 13/11/2017(UTC), dlp6666 on 13/11/2017(UTC)
David BB
Posted: 21 November 2017 21:49:28(UTC)
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I'm not sure if this is the correct thread, but could learned colleagues please advise where I can fine out the months in which both SOHO REIT and Warehouse REIT pay their dividends. Thanks in advance.
Tim D
Posted: 21 November 2017 22:18:41(UTC)
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David BB;53488 wrote:
I'm not sure if this is the correct thread, but could learned colleagues please advise where I can fine out the months in which both SOHO REIT and Warehouse REIT pay their dividends. Thanks in advance.


For things this new with no history on the usual sites you probably have to go back to the IPO document.

In SOHO's (I hold a little) I find:

Quote:
Timing of Distributions
The Company’s financial year end is 31 December.
The Company intends to pay dividends quarterly in March,
June, September and December each year, as three equally
weighted interim dividends and a final dividend taking into
account the requirements of the REIT regime.
The Company is targeting a first interim dividend of 1 pence
per Ordinary Share in respect of the period from Admission
to 31 December 2017, payable in March 2018 (the “Initial
Dividend”). Thereafter, dividends are expected to be paid
quarterly in June (in respect of the three month period to
31 March), September (in respect of the three month period
to 30 June), December (in respect of the three month period
to 30 September) and March (in respect of the three month
period to 31 December).


Digging up equivalent info for that warehousey thing (a desperate attempt to jump on the BBOX bandwagon by rebranding any old light industrial real estate as cool bleeding-edge ecommerce infrastructure? I'm out) is left as an exercise.
1 user thanked Tim D for this post.
David BB on 22/11/2017(UTC)
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