Member Info for zac0_4

AbjectPerformer

" . . . this wasn’t a great investment for 5 years . . . " is a statement of fact

" . . . At this price, going forward for top ups or new investors, it is a good investment . . . " is an opinion and we'll have to wait and see! Good luck.

Johnoxxx - the point I was making was simply that in return for a dividend of 14.62p you've seen the value of your investment capital decline by 16.00p since the start of the year. So, to date, a negative total return.

And although LGEN pays a healthy looking dividend, that masks what has been a pretty unremarkable return over the last 5 years. During that time period with dividends reinvested your total return today would be 23.75%. An annualised average return of 4.35%

A simple global equity tracker fund would have returned 73.87%. That's around 11.70% pa.

That's just 1 reason why I've been selling down my dividend holdings over the last 3 years or so. I have other reasons.

" . . . 3 quid will be back with us by june/July this year . . . "

Perhaps you could share your rationale behind your forecast for a 30% uplift in the share price over the next 2 / 3 months

From holding around 30% of my portfolio by value in dividend paying stocks 3 years ago I've now reduced the figure to around 17% as of today. The reason? Well, this share is a prime example of why. As of today I've locked in a dividend payment of 14.62p, unfortunately it's cost me 16.00p in lost capital!!

I sold 33% of my holding here last month, 18% earlier this week and the balance (50% of my original holding) I'll continue to hold for the time being.

My investment in a simple global equity tracker fund has delivered a positive return ytd of 7.5%; my holding here (including future dividend) a negative 0.7%. An outperformance of 8.2%.

Total return is the key measure for me.

Auguste - if you buy on or after the ex-dividend date you will not receive the dividend. Fact.

Cardinal3 - yes, there is a concentration based on market cap of so called tech stocks. The major players (Microsoft, Nividia, Meta etc) account for around 18% of the value of the L&G International Index Trust. So, a 20% correction would drive the unit price down by 3.6%. I'm ok with that.

You are also correct that there is a fair amount of overlap in my holdings. That's inevitable if you invest in succesfull leading businesses.

I'm happy with the level of diversification across sectors and countries. My alternative, historically, was to just invest in a small(ish) number of UK listed companies. That's not diversification and I would argue carries more risk.

Aangus1 - I can't say I give much thought to the question you've posed. I don't invest in funds for the short-term, so a percentage point either way is of little concern.

My largest holding, in a global equity tracker fund, is in L&G International Index Trust Acc. If you want instant trading they offer an ETF (LGGG) which has an almost identical make-up and performance.

Craigb - L&G International Index Acc, Vanguard Global All Cap Acc, L&G Global Tech Acc and 3 ETFs, LGGG, RSGL and IUQF.

Cardinal3 - simple really. The total return from my dividend paying investments produces an inferior total return compared to a simple global equity tracker fund over the long term.

The average annualised 10 year total return from LGEN is around 4.5%. Their global equity tracker fund has produced a total annualised return of 11.5% over the same period.

I'm far better off selling units as and when I require income than taking a dividend at the expense of capital.

Sold approximately a third of my holding earlier today.

Looking to reduce my exposure to dividend paying holdings to around 15% of my total portfolio value.

Still some work to do but a big improvement on the 30% value it was a couple of years ago.

Don't forget to make use of your tax allowances by Friday - ISA, CGT allowance & SIPP. Even if you're retired with no earnings you can top up a SIPP and, contrary to popular belief, it's more advantageous than an ISA!

Tichtich - here's a rough breakdown of my portfolio. Actively managed global equity funds 40%, Tech funds and 2 individual tech shares 10%, Growth & Income funds 4%, Global equity tracker funds 17%, Small & medium cap (managed & tracker) 5% and dividend payers 18%. The remaining 6% I'm looking to further rationalise.

LGEN is currently about 3.5% of the portfolio's value. This has come down from 5% at the start of the year and will further reduce to 2.5%, probably next week.

" . . . if you assume a completely static SP of say £2.50, LGEN has returned, over the last 5 years . . . . . . a compounded return of roughly 43% . . . "

Well, you shouldn't assume a static share price of £2.50, because it isn't static! Let's look at some facts shall we? Over the past 5 years , with dividends re-invested, LGEN has deliveres a return of 30%, not 43%. That's an annualised average return of approx 5.5%

" . . . If you want to get rich, there’s few better than LGEN out there . . . "

How about a simple global equity tracker fund? Less risk and better returns. LGGG has returned 80% over the past 5 years. That's an average annualised reurn of 12.5%!

AbjectPerformer - without knowing specifically which fund(s) your pension provider invests in I can't say.

However, whilst I do hold a number of funds, I have been migrating over many years to simple global equity tracker funds. I hold Legal & General International Index Trust as a core holding. I've just checked and my inital purchase was made on 2nd July 2019 at £1.54 per unit. Today it's worth £2.62 per unit. A 70% return!

To put that into context had I purchased LGEN on the same date, and reinvested the dividends annually, my holding today would have returned 33%.

That's a massive difference over time.

. . . another sluggish year for my dividend payers!

Here we are at the end of q1 and overall year to date my portfolio has returned +7.4%. That's made up of a total return from my non-dividend paying holdings of +9.2%, whilst my dividend payers are about flat at -0.3%.

Thankfully my dividend payers only account for around 18% of my portfolio by value. The plan is to further reduce this to around 15%.

An interesting article. So, with dividends reinvested, a £100 investment in BP 25 years ago would today be worth £302. That's an average annualised compound return of 4.525%

Do you expect a different return over the next 25 years?

A £100 investment in a simple global equity tracker fund 25 years ago would today be worth £862. Less risk and better return!

B-w-f " . . . How does a buyback work? Is it a percentage of everybody’s holding? And how does it impact share price? . . . "

The company simply buys shares on the open market and cancels them. Your shareholding remains as-is. In theory it shouldn't affect the share price at all as it's a neutral transaction.

From my experience buy backs are a waste of time.

Eckie8 - " . . . Same as it ever was!! . . . " - Of course it is. Why would you expect anything different. Over 5 years LGEN has returned 29%. FTSE100 26%. FTSE UK Index 25%. I'm afraid the UK stock market has been a laggard for years.

Look at the 5 year return from a global equity tracker fund at 84%. Remember it's a big wide world out there and the UK is only about 4% of it!!!!

Cardinal3 - " . . . I'm staying away from the riskier end and beginning to think of IHT more . . . "

Well, on that basis I'd be very careful of AIM stocks. The one that's been recommended (if it's the one I've looked at) currently trades at 820p per share. Over the last 12months it's had a high of 957p and a low of 445p. Doesn't look very stable to me coupled with an annual nett profit of c.£5m and a pe ratio of 33.

I'd be looking to load up my pension as much as possible as pensions sit outside your estate for IHT purposes. Also, when you withdraw cash, providing you keep your income level below the higher rate tax band you're better off than putting the same amount into an ISA!

Phyl - looking to get dividend payers down to no more than 15% of my portfolio value. I suspect over time I might even reduce to 0%!

Fundsmith is my largest holding by a long way. I invest with them directly as there are no platform charges and they offer an automatic withdrawal facility ie you can drawdown a set amount on a quarterly basis just like a dividend if you wish.

I started buying in 2018 and to date my total return is 73%. So, no complaints there. Good Luck.