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For me the only thing that increases a share price is an increase in profits or potential future profits. As per my example removing £1bn from the value (from the balance sheet) of the business and reducing the number of shares in circulation to the same value simple maintains the status quo.
. . . "There are risks, of course, but they are in line with most investments . . ."
Yes, much bigger risks investing in a single UK business in one sector as oppossed to a global equity tracker fund investing in 2,200+ companies across multiple sectors and geographies.
With more risk you hope for better results. In this case the reality doesn't match hope!!
I held these in both my ISA and SIPP. Sold my SIPP holding just prior to recent ex-div date at 243.36p - seems like a shrewd move now! Just wanted to reduce my exposure to dividend (+5% yield) holdings so I've decided to ditch all in my SIPP and just hold in my ISA. My SIPP sale cost me 30.4% in lost capital, however the dividends received the holding period delivered exactly the value as the lost capital. So, break even.
My ISA holding is currently 29.8% down in capital terms with dividends received to date of 23.2% of the value of capital invested. So, over 6% down.
It's safe to say this hasn't been one of my better investments! I've no idea where this will go from here and hear nothing to reassure me from the fund managers!!
I'm definately no fan of buy backs. In my experience it has no effect on the share price. Let's say a company has £1bn to spend on buying backs its own shares. That £1bn sits as cash on their balance sheet so is priced in the share price. It is removed from the balance sheet so the value of the business is reduced but is offset by a reduction in shares in circulation. The sp remains as-is. Yes, with less shares, it increases EPS and reduces cost of overall dividend payments. But for me, as a shareholder, I'm no better off.
Anon3 - . . . "my point is more that the performance is, while not good, not particularly woeful either . . . " I agree
. . . "A company that's rising consistently is going to become harder and harder to find in the next 18m-2 yrs, imo, so if you find one, let me know please . . ."
Well, I know I'm beginning to sound like a broken record, but L&G International Index Trust has risen each year for the last 5 years (maybe more, I don't have the data). I'm expecting a continued growth in the global economy, albeit small, over the forthcoming couple of years. Remember, it's not all about simply level of growth it's about not losing money. Take the last 12 months, the trust has delivered growth of almost 5%, whilst LGEN has lost 7%. That's a 12% outperformance and it make a big difference!
I'm not really interested in other companies who are performing even worse than LGEN! I'm interseted in my holding here.
At the current share price this year's dividend of c.19.64p per share will have cost me 22.5p per share in lost capital. Better than last year I suppose, were a 18.71p dividend cost me 47.5p per share is reduced capital.
Robleo - for those who are interested they can copy and paste below for access to fund info
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-international-index-trust-c-accumulation
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/f/fundsmith-equity-class-i-accumulation
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-global-technology-index-trust-c-accumulation
Robleo - you may well be right. The period you've picked ie Jan22 to date has been a poor period for funds as well as dividend paying shares. My largest holding, Fundsmith Equity, has declined by 5.2% during that period. However, my holding here, in LGEN, has declined by over 12%. You tell me which is best.
Can anyone name a dividend paying holding (5%+ div pa) that has outperformed a simple global tracker fund over the last 5 years? Say L&G International Index Trust Acc.
My 7 dividend paying positions all fail the above test. I've sold out most of my dividend payers in my Sipp and currently I'll continue to hold in my ISA. However, despite holding them for years, the data simply doesn't add up. I'd be better off selling down units annually in the above mentioned fund to use as income.
Maybe I'm just a poor picker of shares / trusts!!
RogueRiver - thanks for the link
Gwm121 - SEDOL is BG0QP60
I don't favour this fund over Fundsmith etc I just like to have a core holding in a global equity tracker. On that basis I hold both the L&G fund and Vanguard FTSE Global All Cap Index. Very little to choose between them. Vanguard holds about 4% of UK equities, L&G fund excludes UK I think.
My top 5 funds, out of about 15, by current value are:
Fundsmith Equity
Rathbone Global Opps
LF Blue Whale Growth Fund
L&G International Index (would be no.2 if combined with Vanguard Global Tracker)
Lindsell Train Global Equity
In all cases I invest in the accumulation version of each fund, with the exception of the Lindsell Train fund which is only available in an income type
Gary59 - Snap! I take cash from funds as and when required. It amazes me how many people are against investing in funds, and simply focus on dividends for as a means of income.
A £10,000 investment in LGEN 5 years ago would have delivered £3,402 in dividends to date but cost you £1,142 in lost capital. So a total return over 5 years of 22.6%.
If you invested the same £10,000 in the L&G International Index Trust 5 years ago, and at the end of each year sold down units to the equivalent value of the L&G annual dividend, today you would have drawn down £3,402, but your capital is now worth £11,705. A total return of 51.0%.
For me it's important to have balance in my portfolio.
Gary59 - Checked my numbers. Blue Whale actually sits at 5. My current top 5 by value is:
Fundsmith Equity
Merchants Trust
Legal & General
Rathbone Global Opps
LF Blue Whale Equity
I hold Legal & General across 3 accounts. Normal fund and share, ISA and SIPP.
Planning to sell my holding in my normal fund and share account later in the year, following which it will fall to position 7 , by value,out of 27 holdings. Far too many!!