Member Info for zac0_4

" . . . 9% yield - seriously what is not to love? . . . "

The continuous reosion of my capital! Over 5 years - 15.5%, 3 years -17.5% and 1 year -4.4%. It's not simply about the dividend. It's about total return. Ignore that at your peril!

The market certainly disapproves of something. Probably the fact that annual dividend growth will now be below the rate of inflation. In fact, year on year, the spending power of future dividends will be in decline.

Ignore inflation at your peril!

TheTrotsky / Eighteen - increasing the earnings per share doesn't guarantee an increase in the dividend.

The Trotsky " . . . The "financial engineering" principle is clear; as the number of shares in circulation reduces the share price ought to start rising . . . "

That's not my view. To buy the shares they remove cash from the balance sheet. At that point the business is devalued by that amount. They then buy the equivalent value of shares and cancel them. The share price remaims static. It's a cost neutral transaction.

GeneralLevy - " . . . Is there anything more thoroughly depressing than U.K. listed shares . . . "

Yes. Some of labour's muted tax plans!!

So a £200m share buy back and a reduction in dividend per share growth down from 5%pa to 2%pa.

Can't say it does a lot for me.

GeorgeW1995 - " . . . Might have to bed and ISA LGEN, but thanks to the tories hammering dividend allowance i'm pretty much used up all of my annual tax free dividend allowance for this tax year . . . "

I'm might be pessimistic here but I fully expect a Labour government to bring both dividend and capital gains tax, sitting outside of an ISA or Sipp, in line with income.

So, for basic rate tax payers, dividend tax will increase from 8.75% to 20%, and CGT from 10% to 20% .

Not sure what they'll do with the current tax free allowances. However, as you rightly state, the tories have pretty much hammered them anyway.

I still hold a number of funds outside of my ISA. I'm in the process of selling a number of them, realising the profit and reinvesting in other very similar funds. Although this will take me above this years CGT allowance I'd prefer to pay 10% tax on the profits rather than 20% next year!

Whether my forecast proves to be correct only time will tell!

Meconopsis – I certainly wouldn’t use historical performance figures in isolation to make an investment decision. However, the figures are factual.

To me they provide data showing actual share price performance over a long period taking into account economic cycles and market shocks.

I also think markets are pretty efficient when it comes to evaluating business value and tend to price in all known and anticipated future factors affecting share prices.

I hope your estimate of fair value being 40% higher than it is today is correct. I’ve no idea what catalyst is required, or what you believe is required, to deliver your fair value estimate. Maybe we’ll get something on Wednesday! (Fingers crossed)

Or, maybe £2.50 is fair value.

All this analysis is fine but what's the conclusion?

There is a saying something along the lines of history having a habit of repeating itself. Over the last 10 years the average annualised total return from LGEN has been 5.9% pa. That's all I expect going forward. Maybe others know differently?

That's just one of the reasons why my LGEN holding is only about 10% by value when compared to my global equity tracker fund holding. L&G International Index Trust has delivered an average annualised return of 12.4% over the same 10 year timescale.

Sometimes it pays to keep it simple.

Glasshalfull - have you spoken to someone at HL regarding the issue? If you haven't you should! Perhaps you could let us know the outcome.

I've never had a problem with them. I know you're not invested here but as an example the LGEN dividend paid today has arrived in my HL ISA account and I've reinvested it across 3 separate ETFs with no issue at all.

I'm with HL. My divi will arrive today and i'll reinvest it today (into LGGG).

Maybe I'm missing something but i have no issue accessing divi payments the moment they arrive.

I'm happy for them to divest and focus on their core business offer

First bought into this in May 2017. Have added on 35 separate occasions since. Highest price paid £3.70, lowest price paid £2.13. Tomorrow, all being well, once my dividend is banked I'll be at break even.

Not one of my better investments!!!!

Dedino - "We could be £3 very soon . . . "

On what basis do you come to that conclusion?

Finley1 - As has been highlighted it's very difficult to come to a definitive answer with regards to the impact, so called, tech stocks have had on the overall return from this fund.

Here's my take, and I've used the 21% Meconopsis figure as a base for tech contribution.

If the rate of growth from the tech element is halved and the rate of growth from the balance of the fund simply mirrors what's been achieved over the last 5 years, the fund will deliver a 5 year total return of 65% so an average of just over 10.5% pa

That's why I hold simple global equity tracker funds as core to my portfolio.

Hi Finley1 - The global equity fund I was referring to, L&G International Index Trust, has Nvidia at 3.25% of the overall fund. So, despite substantial growth, it's still a relatively small part of the fund (and therefore the global economy)

As for monetising AI well they seem to be doing ok with recent revenues for q1 at $26bn with a gp of 78%!

I'm not a greedy person and if I can achieve an average annual total return into double figures then I'm happy. With that in mind the fund has returned an average annualised return over the last 10 years of 12.6% pa. It's not my only holding but it (and other very similar global tracker funds) is certainly core to my portfolio.

Drew57 - type GB00BG0QP604 into google. That should find it.

Crossley - 39% is the total return achieved over the 5 year period with dividends reinvested

I can be as critical as anyone regarding LGEN performance. However, as a longterm investment it tends to deliver a positive total return ie +13% over the last year and +39% over 5 years. CSN has delivered a negative total return over the same periods of -5% and -2%. Too many people are seduced by the promise of a high dividend yield in isolation of total return.

My best returns come from funds. The L&G International Index Trust has delivered +21% and +80% over the same periods. A simple global equity tracker fund. Well diversified, less risk, better results.

Correction, cgt is levied at 10% it's dividends that are subject to 8.75% tax above tax threshold for a basic rate tax payer