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OEIC versus IT
Jeff Liddiard
Posted: 08 May 2018 18:51:07(UTC)
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It has been said on here by some that they prefer ITs to UTs with some valid reasons for that preference. However, Fundsmith and Lindsell Train Global Equity Fund are both popular on here. Is it fair to say that these two funds are so good that the IT preference can be ignored or are there any ITs which have the same/similar remit with a similar return on investment?
Tom Bards
Posted: 08 May 2018 19:05:26(UTC)
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Jeff Liddiard;61939 wrote:
It has been said on here by some that they prefer ITs to UTs with some valid reasons for that preference. However, Fundsmith and Lindsell Train Global Equity Fund are both popular on here. Is it fair to say that these two funds are so good that the IT preference can be ignored or are there any ITs which have the same/similar remit with a similar return on investment?



Similar returns? Yes.


Similar remit? Debatable. Especially for the cost Lindsell Train stands out, IT's following a similar investment style with almost certainly cost more. I'm not very keen on Fundsmith personally so won't comment on that.
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Jeff Liddiard on 08/05/2018(UTC)
Jeff Liddiard
Posted: 08 May 2018 19:31:54(UTC)
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Just done a bit more research and MNKS and EWI appear to be possibilities if wanting to go the IT route. Are these as good as the two funds mentioned is the question?
Tom Bards
Posted: 08 May 2018 19:49:15(UTC)
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Jeff Liddiard;61943 wrote:
Just done a bit more research and MNKS and EWI appear to be possibilities if wanting to go the IT route. Are these as good as the two funds mentioned is the question?


Well, EWI is a smaller companies IT so, while a good IT, it can't really be directly compared with Lindsell Train or Fundmsith. As for Monks I would probably say the two funds mentioned are better investments.
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Jeff Liddiard on 08/05/2018(UTC)
philip gosling
Posted: 08 May 2018 21:33:40(UTC)
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Tom Bards;61948 wrote:
Jeff Liddiard;61943 wrote:
Just done a bit more research and MNKS and EWI appear to be possibilities if wanting to go the IT route. Are these as good as the two funds mentioned is the question?


Well, EWI is a smaller companies IT so, while a good IT, it can't really be directly compared with Lindsell Train or Fundmsith. As for Monks I would probably say the two funds mentioned are better investments.




When talking about EWI being a smaller companies just remember Douglas Brodie one of its 3 key staff said at BG Forum in Edinburgh they invest in companies that are between £100 million and £5 billion! Until then I and most of the audience had assumed much smaller figures. It made me re think what in a global fund is "smaller".
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Jeff Liddiard on 09/05/2018(UTC)
Freddy4Skin
Posted: 08 May 2018 22:40:04(UTC)
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Tom Bards;61948 wrote:
Jeff Liddiard;61943 wrote:
Just done a bit more research and MNKS and EWI appear to be possibilities if wanting to go the IT route. Are these as good as the two funds mentioned is the question?


Well, EWI is a smaller companies IT so, while a good IT, it can't really be directly compared with Lindsell Train or Fundmsith. As for Monks I would probably say the two funds mentioned are better investments.


Why would you say that?
Since Charles Plowden took over as manager of Monks in 27/03/2015, Monks has outperformed both of the Funds, according to Trustnet. Of course 3 years is probably too short a time to judge.
I do hold all 3 so I am interested as to how you arrived at your assertion.Thanks.
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Jeff Liddiard on 09/05/2018(UTC)
Jeff Liddiard
Posted: 09 May 2018 14:35:43(UTC)
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philip gosling;61951 wrote:
Tom Bards;61948 wrote:
Jeff Liddiard;61943 wrote:
Just done a bit more research and MNKS and EWI appear to be possibilities if wanting to go the IT route. Are these as good as the two funds mentioned is the question?


Well, EWI is a smaller companies IT so, while a good IT, it can't really be directly compared with Lindsell Train or Fundmsith. As for Monks I would probably say the two funds mentioned are better investments.




When talking about EWI being a smaller companies just remember Douglas Brodie one of its 3 key staff said at BG Forum in Edinburgh they invest in companies that are between £100 million and £5 billion! Until then I and most of the audience had assumed much smaller figures. It made me re think what in a global fund is "smaller".




Re smaller companies, EWI do appear to have better performance over 1, 3 and 5 years (according to Trustnet) than two others I have under consideration (if I decided to overweight smaller co's) namely, F&C Global Smaller Companies I.T. (FCS) and Vanguard Global Small-Cap Index ACC GBP Fund.

Food for thought!

Dan L
Posted: 09 May 2018 16:32:21(UTC)
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Freddy4Skin;61954 wrote:
Why would you say that?
Since Charles Plowden took over as manager of Monks in 27/03/2015, Monks has outperformed both of the Funds, according to Trustnet. Of course 3 years is probably too short a time to judge.
I do hold all 3 so I am interested as to how you arrived at your assertion.Thanks.


Monks is growth based, very cyclical. The other two are much more defensive. Theoretically the other two hold up better during a crash
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Guest on 10/05/2018(UTC), Jeff Liddiard on 12/05/2018(UTC)
chazza
Posted: 10 May 2018 16:43:02(UTC)
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Biotech.
Polar Cap Biotech OEIC has outperformed both the ITs, IBT and BIOG for several years now.
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Jeff Liddiard on 12/05/2018(UTC), Hilary hames on 14/05/2018(UTC)
Pensioner
Posted: 10 May 2018 16:43:50(UTC)
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In a nut shell the beauty of OEIC v IT. Is the question of costs. IT's are good if you can afford £2000 to £5000 as you will have broker costs and stamp duty at half a percent on the lump sum when you buy and a broker cost when you sell. I do use IT's but wouldn't personally invest less than £2500 because of costs (A forever holder of FRCL). Where as if money is tight or you wish to invest monthly (best way as little as £25) or a small lump sum (minimum £100), there is no immediate broker charge and no stamp duty. I prefer this way and have built up a good sum in Fundsmith, Lindsell Train various classes, Jupiter v classes, and others. I personally deal with HL and I pay costs monthly and find service and info very good. I think the first £250k of holdings is half a percent per annum.
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Aminatidi on 10/05/2018(UTC), Jeff Liddiard on 12/05/2018(UTC)
Elie Gabay
Posted: 10 May 2018 17:03:52(UTC)
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What about the Baillie Gifford Japanese Smaller Companies Fund as opposed to the Baillie Gifford Shin Nippon Trust. They seem to be very similar but the Shin Nippon Trust is trading at a premium of 9.15%, so despite its better historic return why would you buy the IT at a 9.15% premium when you can get the OEIC at the actual NAV without paying a spread or commission (if using Hargreaves Lansdowne). Even if you use another broker, the fee for buying an OEIC is much lower than buying an IT.

The IT also can use gearing, which may increase returns but also comes with increased risks in a falling market.
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Jeff Liddiard on 12/05/2018(UTC), Richard_L on 13/05/2018(UTC)
Pensioner
Posted: 10 May 2018 21:01:37(UTC)
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I should have mentioned on my earlier post, which I often do, on the HL site you can easily SWITCH from one OEIC fund to another. The site gives you a percentage return on each investment you hold, you can either switch so many units or a value in pounds which you choose, with an IT you have the cost of selling and repurchasing some other IT. HL do not charge for switching an OEIC. Again, if money is tight the OEIC is the better road.
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Dan Mall on 11/05/2018(UTC), Jeff Liddiard on 12/05/2018(UTC), Richard_L on 13/05/2018(UTC)
Apostate
Posted: 11 May 2018 07:57:09(UTC)
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with ITs you're 0.5% down before you've even started
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Jeff Liddiard on 12/05/2018(UTC)
brian jackson
Posted: 11 May 2018 08:13:01(UTC)
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Costs do come into play and with Hargreaves in their ISA you only need a £10000 value before you reach the £45 annual charge cap with ITs. Any OEIC/unit trust above that value will continue to attract a 0.45% charge. For larger sums therefore IT dealing charges can become the relatively cheaper option.

In terms of dealing between OEICS/unit trusts there are inherent delays in actual completion:
a) the manner in which Hargreaves pools deals for onward transmission to the OEIC/unit trust; and
b) the forward pricing on these instruments required under the regulations that govern them.

In short you will never know the exact price you are dealing at in an OEIC/unit trust when placing the deal and significant market moves could work for you, or against you. With an IT you will know your dealing price.

As ever all of the investment vehicles have pluses and minuses and its a question of using what suits you and the applicable circumstances.
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Apostate on 11/05/2018(UTC), Jeff Liddiard on 12/05/2018(UTC), Richard_L on 13/05/2018(UTC), David 111 on 16/05/2018(UTC)
Fell Walker
Posted: 11 May 2018 08:18:00(UTC)
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Apostate;62099 wrote:
with ITs you're 0.5% down before you've even started


Far too short term thinking IMO. You could also add the spread on as well. MWY is 2% but when you are buying to hold it doesn't really matter.

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Jeff Liddiard on 12/05/2018(UTC)
mark spurrier
Posted: 12 May 2018 12:46:58(UTC)
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If you look at Finsbury Growth and Income and Lindsell Train UK Equity they are both run by Nick Train and they both have the same holdings give or take in the same sort of proportions.
FGT wins........An IT with the same holdings as a UT should be a better investment because of the structural benefits of ITs

BGS and Baillie Gifford japanese Smaller.... BGS has won 37/30% annualised over 3 years but I choke on a 9% premium even though the numbers suggest I should swallow it.


Exact matches are rare but if I have a choice I would always go with the IT variant

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Jeff Liddiard on 12/05/2018(UTC)
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