M&G High Income Share Discussion Threads

[cnelms] 02/7/2012 18:36

Isn't the problem here that MGHI is a split capital investment trust? This means that there are at least three different types of shares: preference, income, and capital. When the company is wound up in 2017, the preference share holders get their capital back first, and anything left over is distributed to the income and capital share holders, in that order. Thus there is a risk that if you invest in the latter two types of shares, you may not get your original investment back. Given that 2017 is only 5 years away, that risk is becoming greater: if it were 100 years away the shares would be an excellent investment. Hence the high return as usual is commensurate with the high level of risk buying the shares entails.

Data is available on the M&G website and the Telegraph website. You also need to read the detailed information download on the M&G website.

[and1] 12/3/2012 11:57

nobody can give any info on this share. i spoke to M7G and they hadnt heard of it, they passed me onto equininity or some such company who promptly passed me back to m&g who once again havent heard of this share which carries their name. yet it is traded daily an dhas supposedly a good income. yet advfn has not shown any data on this share since 2003. what a disgrace.

[rat attack] 15/6/2011 11:49

Investment objective is to achieve an above average and increasing income over the life of the Company while seeking to achieve capital growth.

The portfolio comprises quoted investments together with preference shares, AAA/AA/A and BBB bonds with a very smaller percentage of unrated bonds. The vast majority of the investments are well known UK blue chips such as: GSK, Unilever, BG, Shell, BT and HSBC.

In the current financial year the Company has declared three quarterly dividends of 1.2p with a final quarterly dividend of 1.4p anticipated in July. The total anticipated dividend of 5p would equate to a yield of 10.75% at the mid price of 46.5p. If the last quarterly dividend of 1.4p were the norm for FY2012 the yield would be 12.04%.

MGHI will wind up on 17 March 2017 when the assets will be distributed amongst shareholders. MGHI has an proposed redemption value of 70p on winding up, but whether this is paid out depends, as always, on performance between now and the payout date. As at 30 November 2010 the income shares had a NAV of 54.07p so the income shares are trading at 15% below NAV. The current redemption value is 52.61p so the income shares are trading 12% below current redemption value and 34% below the 2017 redemption value.

Anyone investing should always do their own research and remember that no reliance, or responsibility, can be accepted for any inaccuracy of the information, or any misleading statement, contained on this thread.