British and American Investment Trust


#1

I am considering investing 7% of my drawdown account in British and American Investment Trust.
The yield is very (suspiciously) high, and the charges seem on high side. I just wonder if it produces a reliable income, but I do note that it is in AIC Heroes list of 20.
Just wondered if anyone has any toughts on this please. ?


#2

Not do much one for the brave as the positively heroic. It is a very small fund of funds, so not only are the fees very high but as I understand it the published TER figures make no allowance for the fees charged by the underlying funds.
Unusually for an IT they apear to have a lot of debt. Even more suprisingly they are heavily exposed to Biopharma and a single Californian company represents a third of the assets. So, I haven’t checked the accounts but can’t see how this portfolio generated any net income let alone enough to pay a dividend from earnings.
I’d say this is as unreliable as you can get! .


#3

Thanks very much mickbeaman very helpful. I will keep looking in US for a reliable income payer.


#4

It is notoriously difficult to beat the market in the USA . This is one instance where you might find an income-oriented ETF a better bet!


#5

Thanks for that, I will have a look.
I have been looking at Blackrock North American Income Trust and it invests in large US companies and yields 5%. But it does trade at a small premium. It seems quite solid. I feel that I need a bit more cover in US as I am a bit light there.


#6

I’m considering the Baillie Gifford American Growth Trust, it doesn’t have much of a track record of course, and like @mickbeaman states it’s pretty hard to beat the US market but I’m attracted to its growth bent because I think there is a lot more to come to investors as AI improves, and more data is collated.


#7

@kevdraw64, note that the Trust pays out far more in dividends than it receives in revenues and also charges more than half of their running costs to the capital account so a proportion of that dividend income is basically a repayment of your own invested capital which you will then be taxed on! In addition as far as I can see they sell options to further enhance that income. None of that is a problem providing you accept the potential diminution of your capital relative to the market!