City of London trust
Discussion
Hi, I'd very much appreciate views on the following.
I'm considering placing a fair sum into the city of London trust based on their history of increasing dividends year in year out for the past fifty years. I'm looking for income with out the aggravation of buy to lets.
My concerns are that as CTY is a trust they'll be a 0.5% stamp charge, and whilst capital gains will be low the 3.5% yield after fees would be enough to keep me with a handsome income for the next fifty years.
Other ideas that have crossed my mind is to dump the whole amount in an even lower fee no stamp duty Vanguard S&P tracker fund and take a set amount of income from profits. Looking at an S&P chart it appears to have trended neatly over the past three decades rarely going below the 20 moving average on a monthly chart.
Be grateful to have the heads up on any other interesting income funds/trust????????
I'm considering placing a fair sum into the city of London trust based on their history of increasing dividends year in year out for the past fifty years. I'm looking for income with out the aggravation of buy to lets.
My concerns are that as CTY is a trust they'll be a 0.5% stamp charge, and whilst capital gains will be low the 3.5% yield after fees would be enough to keep me with a handsome income for the next fifty years.
Other ideas that have crossed my mind is to dump the whole amount in an even lower fee no stamp duty Vanguard S&P tracker fund and take a set amount of income from profits. Looking at an S&P chart it appears to have trended neatly over the past three decades rarely going below the 20 moving average on a monthly chart.
Be grateful to have the heads up on any other interesting income funds/trust????????
Looking at it briefly there’s no magic to what CoL do - they just own a basket of UK equities with a focus on low volatility dividend payers.
Might as well access the same risk in the lowest cost format, which is likely a Vanguard fund through their platform.
Dividend income versus accumulation / growth is a bit of a red herring as you can always sell units in an acc fund to give you liquidity.
Might as well access the same risk in the lowest cost format, which is likely a Vanguard fund through their platform.
Dividend income versus accumulation / growth is a bit of a red herring as you can always sell units in an acc fund to give you liquidity.
NickCQ said:
Dividend income versus accumulation / growth is a bit of a red herring as you can always sell units in an acc fund to give you liquidity.
^^^ This.Investing is about getting returns. If you keep these invested you have growth. If you draw them out you have income. If you do a bit of both your have growth and income.
I like CTY. It is about 15% of my ISA. I have owned it for approx 10 years (when it was a larger percentage) and the value of my holding with dividends reinvested has just more than doubled. Am not sure how that compares to the FTSE with dividends reinvested - probably about the same? The fees are low (0.39%) and so on some platforms like the one I use which charge a platform fee for funds but not ITs, it is cheaper to hold than a vanguard fund.
At the moment I suspect it is on a small discount to NAV which may make up for the stamp duty.
Like you are proposing, my strategy has been to accumulate income paying funds in my ISA (this, Murray Income, Witan, Caledonia etc) with a view to letting the dividends roll up before I need to switch on an income stream (which may be sooner rather than later if this virus doesnt clear up!). Ive added in a few other dividend paying stocks (Tritax BBOX, RECI), some fixed income / prefs and some non-dividend payers for balance. Ironically, and perhaps in support of Julian's point, these have been the best performers in recent years (Scottish Mortgage and Syncona).
Overall yield is just over 4%, maybe slightly higher given the last week or so, which I think I could take as income pretty much in perpetuity. My biggest concern is replacing the fixed income investments when they mature. I will be very sad to say goodbye to my 5% Tesco Personal Finance bonds when they mature in November for example. At the moment between my and my wife's account we would yield about £2.5k a month (although lumpy).
I should add that although I worked in finance I am absolutely not an investment professional and there are others on here who are much better qualified than I am!
At the moment I suspect it is on a small discount to NAV which may make up for the stamp duty.
Like you are proposing, my strategy has been to accumulate income paying funds in my ISA (this, Murray Income, Witan, Caledonia etc) with a view to letting the dividends roll up before I need to switch on an income stream (which may be sooner rather than later if this virus doesnt clear up!). Ive added in a few other dividend paying stocks (Tritax BBOX, RECI), some fixed income / prefs and some non-dividend payers for balance. Ironically, and perhaps in support of Julian's point, these have been the best performers in recent years (Scottish Mortgage and Syncona).
Overall yield is just over 4%, maybe slightly higher given the last week or so, which I think I could take as income pretty much in perpetuity. My biggest concern is replacing the fixed income investments when they mature. I will be very sad to say goodbye to my 5% Tesco Personal Finance bonds when they mature in November for example. At the moment between my and my wife's account we would yield about £2.5k a month (although lumpy).
I should add that although I worked in finance I am absolutely not an investment professional and there are others on here who are much better qualified than I am!
I've noticed a fund that is paying a handsome 4.5% after fees. ROYAL LONDON STERLING EXTRA YIELD BOND It appears to have not budged much this week even though everything else has taken a 10% hit.
I like the idea of investing for growth and taking money as and when. But as I've been so use to receiving guaranteed rents from a portfolio of fifty properties for the last fifty years I guess I'm still looking for that secure income stream.
I like the idea of investing for growth and taking money as and when. But as I've been so use to receiving guaranteed rents from a portfolio of fifty properties for the last fifty years I guess I'm still looking for that secure income stream.
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