7 funds £200 each


#1

 

I am looking to create a portfolio with the 7 funds below giving a global and fixed income emphasis which i will try and pick up at a discount.

Looking to hold for the long term (3 years plus) and on a scale from 1 (cautious) to 10 (aggressive) looking to be around a 5.

Any views ?

Foreign & Colonial Investment Trust

Personal Assets Investment Trust

RIT Capital Partners Investment Trust

Bankers Investment Trust

Witan Investment Trust

Henderson Diversified Income Investment Trust

Invesco Perpetual Enhanced Income


#2

First observation is that two hundred quid won’t buy even a single share of Personal Assets. The second is that three years isn’t a long time for equity investments.

As you are looking at total capital of £1400 then I’d suggest just the one, or possibly two ITs from the list. But I’d favour just the one. Because it is not possible to buy fractions of shares, the more ITs you hold, the greater the amount of uninvested cash you are likely to have hanging around.

 

F&C, Witan and Bankers are too similar to each other for me to want to hold all of them (not that I do hold any of them), so I’d narrow these down to just the one.

Whilst RITCap says that it is interested in capital preservation, I wouldn’t put it in the same league as Personal Assets or Ruffer - not without seeing how it copes with the next downturn, whenever that might be. I have always thought of it as a growth fund, and both bought and sold it for that reason. But the last sale was a few years ago and I haven’t been keeping up-to-date with it, so it might be doing things a bit differently now. Not sure that I think of it as being a 3-year, cautious fund!

I’d also replace IP Enhanced Income with City Merchants High Yield for consideration. The two do have the same managers and have similar holdings, but the former has quite a high level of gearing, and certainly well above what is appropriate for a risk level of 5! In fact, CMHY currently has a net cash position. Both of these hold more sub-invesmtment grade bonds than investment grade, and carry higher associated risks accordingly. If you did want to have a separate bond fund and did want a lower potential correlation with equities then you might consider an OEIC bond fund instead - these have a level of choice that simply isn’t available with ITs. Or, you hold something like Personal Assets as a proxy for them.

Regarding Henderson Diversified, are you clear on the types of assets that this holds? There is a bit more to it than just ‘bonds’, so you need to be aware of this. Not trying to dissuade you, just making sure you’ve done your research!


#3

I hold both Witan and Henderson Diversified Income. I invested relatively small sums of money in to them for my two children, £700 in to both funds twice over in a Junior ISA.

The rational for investing in them you can find on here, that was how I found them.

Witan is basically multi-manager fund. My previous financial adviser sold me a multi manager but the difference with the Witan trust is it’s fees are only 1% where as I was paying almost 3% for the fund I had before.

The Henderson fund is fixed interest but the difference with non investment trust fixed interest funds is they can invest in something called Senior Secure Debt which if a company goes belly up gets paid out before Corporate Bond holders so it’s a little bit safer.

I am really happy with both of them but I would suggest you do your own research. I read everything I could read. I am not wealthy and so these investment are important to me.

This article explains the Henderson trust: http://whichinvestmenttrust.com/henderson-diversified-income-suitably-hedged-inflation/

This one Witan: http://whichinvestmenttrust.com/witan-trepid-world-explorer-track-record-making-money/

Good luck :slight_smile:


#4

£200 is ok if you’re using a broker that charges a percentage rather than a fixed fee. There’s no stamp duty to pay below £1000.

Personally I wouldn’t invest less than £750 in a fund.

Witan’s new set up is really interesting, as @sandradore states it’s basically a very cheap multi-manager. One of the advantages investing in it is you are exposed to some of the best fund managers world wide all via one fund.

I agree with @arkwelder that 3 years is not long when investing in equities and over that time frame I don’t think any of these could be considered a 5 on your 1-10 scale. Over 5 years I would consider the Henderson, Invesco (and City Merchants), and Personal Assets to be 5. The others would be 7-8 because equities are volatile but they’re still the place to make money long term.

 


#5

I tend to agree with the feedback you’ve had from others @phippsit

Interestingly, all of the trusts you mentioned you could make a perfectly good investment case for because they all have merit.

Witan does give you wonderful exposure to managers you often can’t access any other way as a retail investor (see the list of managers at the bottom of that article that’s linked to).

A good global fund can do something similar though, that is give you international exposure and sometimes multi-asset too - F&C has investments in private equity, property and bonds for instance, Ruffer, Personal Assets and RIT invest in a range of assets too.

Good luck whatever you decide.