Legal & General Share Discussion Threads

[rs34] 03/7/2020 08:41

legal and general dividend due to be declared next month

[netcurtains] 02/7/2020 16:26

NAV per share is 153. Share price is about 223. So NAV about 70% of share price.
So LGEN is really really cheap ...

Take Standard Life it has similar NAV but its liabilities are way bigger than its current assets.....

LGEN is incredibly cheap by comparison (using NAV and current assets)

[milliethedog] 02/7/2020 15:01

Very helpfull, thank's EJ......

[high yields] 02/7/2020 06:58

Is it a good time to buy UK gilts?

[high yields] 02/7/2020 00:25

Hi guys, you are amazing IMO. JUST DO NOT STOP with comments.

[ianguerin] 01/7/2020 22:40

As opposed to buying individual gilts, you can buy gilt units where the investment manager does all the underlying buying, selling & holding. Not done it myself, but they are commonly used by pension funds as a pooled investment (i.e. pooled with other pension funds' investments). I guess some of them are available as distribution, rather than accumulation units. Management charges should be low as gilts have low dealing costs.
A key aspect at the moment is that index-linked gilts are starting (started even ?) to reflect the ONS' plans to ditch the RPI & replace it with CPI. Many pension fund liabilities have links to RPI & they will at some point want to match their interest risk on those liabilities with CPI (which will be cheaper for them).
If you look at a factsheet for a pooled gilt unit, it will tell you their largest holdings. If there are some paying a nominal 4% or above, you may think that's attractive, but note that the actual return on your investment will be much less because the 4% is paid per £100 of nominal value, & you will pay much more (think £200+) for each £100 of stock

Sorry for the OT, but there seemed to be some interest shown in gilts

[jbarker5555] 01/7/2020 20:41

OK, thanks Pierre for the clarification, good reasoning. I find it helpful to crosscheck other people's thought processes with my own as circumstances and age can make a big difference to investment decisions, no point comparing apples with pears!! :)

[nigel123] 01/7/2020 17:28

Pierre, thanks for taking the time it's very much appreciated :)

[pierre oreilly] 01/7/2020 17:01

jb, yes, i expect that on average, the stockmarket returns more than gilts on average if you hold for many years (of course gilts or more likely derivatives of them can be traded daily for those inclined) When i decided to give up work (at the time i had a young family) i wanted to be certain i could provide for them come whatever. So I bought sufficient gilts to give a decent income whatever crashes may have come, so yes, it was certainty i wanted. I already had plenty of shares, just a matter of selling some tech boom shares to get that guarantee, and the rest stayed in the stock market. Wealth at that time in techs came easy for many, but it quickly disappeared again for those who didn't sell into the boom.

If you buy a tracker or fund of ftse100 or a fund of gilts there's a risk far higher than gilts directly. It seemed sensible to me to guarantee me and my family a reasonable guaranteed income rather than chancing it, but that's all I'd use gilts for, and the minimum necessary to achieve that level of security.

[jbarker5555] 01/7/2020 16:14

PO - Is it the fact that they pay a set amount each year that attracts you to gilts? Surely over the long term, left to compound, the stock market gives a better overall return? For example, your £300K invested in an S&P500 tracker in 1990 with average yearly dividends of about 1.8% re-invested would surely give a better return at today's 3100 level ?

Just wondered whether you were looking for certainty of return or overall capital growth. :)

[milliethedog] 01/7/2020 15:17

Thanks zac......
It's for a friend, i'll pass that on

[zac0_4] 01/7/2020 15:10

Milliethedog - Here's some funds I hold. L&G Global Tech, L&G International Index, Rathbone Global Opps, LF Blue Whale Growth, Lindsell Train Global Equity and Fundsmith Equity. I hold the accumulation version of each. To date I'm very pleased with the returns. All held with either HL or Fidelity with the exception of Fundsmith which I hold directly with them. I've set up a regular, automated, withdrawal payment from Fundsmith just like a dividend payment. You need to do your own research. I can recommend the Hargreaves Lansdown website as an excellent tool for research. Good Luck.

[milliethedog] 01/7/2020 14:42

Thanks for that PO, much appreciated
Does anyone have any Funds they would also be happy to recommend?
M

[pierre oreilly] 01/7/2020 09:01

Here's HL which has the current (mid) prices

hxxps://www.hl.co.uk/shares/corporate-bonds-gilts/bond-prices/uk-gilts

[pierre oreilly] 01/7/2020 08:46

Here you go, hope it works.

I just googled 'gilts in issue' and you get to the dmo and you can download the lot. You just buy and sell through your broker just like normal shares. Best to get them in an isa, then they're tax free (although you can't then use the eventual capital loss). btw, i don't follow gilt prices or whether they are good buys or not - i just literally buy and forget them until maturity (which for my current ones was 12 years!).

I was surprised what someone posted about the yield being very low atm - but not surprising given inflation and interest rates. I have to look more carefully into the very basic 'do i want index linked gilts, or conventional gilts' - I'm no expert on individual ones, but i did find out what they are all about and decided they were right for my circumstances (and certainly MUCH better than any pension - I avoided pensions like the plague when i worked, and consequently paid more income tax due to that. I took all that into account. Be good to hear from someone who knows the current state of gilts - the yield, views on index linking v conventional. ej touched on that, be good if he could expand.

[milliethedog] 01/7/2020 08:12

Me too PO
I have a friend in her late 50's who has £60k to invest & Gilts sound like just the thing; regular income and her money will be safe....

Thanks in advance

M

[nigel123] 30/6/2020 21:32

A very interesting subject.
Pierre, Can you provide a link to what gilts are available at this time? A steady/safe income certainly appeals especially as my dividends/interest payments are being hacked at from all directions.

[skinny] 30/6/2020 12:58

Interesting posts chaps - takes me back about 45 years.

[pierre oreilly] 30/6/2020 12:35

EJ, that's interesting. Was there any particular reason t44 stuck out?. I'm more tempted by non linkers since i'd trade income now for growing income which has a benefit in the future (normal shares will grow their income to cater for the future imv, hopefully). Then again, who knows what inflation will do over the next 5/10 years?

[pierre oreilly] 30/6/2020 12:12

Tom, Is that all the return is on gilts today? Seems low, but gilt prices are the result of specialist city institutions who analyse these things to death. Obviously, cast iron guarantees don't come cheap, so gilts will never be fantastic performers compared to the best shares when looked at in retrospect. The value comes from certainty - you don't want to tell your boss to f off based on bt or lloy dividend for example. They aren't for trying to make yourself rich (like shares or horseracing), more they are once you've got a decent pot to give you a lifestyle, (or guaranteed income), much like, but much better and much more secure, than a pension annuity.

I've got to reinvest when my gilt is repaid next year. I don't even try to analyse whether the prices are poor, or which are better than others. I'll just buy one with 20 years to maturity, reasoning the price is optimal (as decided by city professionals, who mainly deal in them rather than pis). They aren't like shares, to me at least, where i can have a guess or opinion whether the business area is good or bad for the next 10 years.

[pierre oreilly] 30/6/2020 11:52

Short of the uk getting invaded by aliens, or complete economic collapse, or 99% death rate from covid 3, gilts will do as they promise. It's the only 100% guarantee you get in investments, and the whole foundation of the economic situation is built on that afaik. If one tiny bit of an existing gilt were changed, the gov wouldn't be able to sell any gilts ever again. Pension copanies for example can confidently buy an income matching their commitments for 50/60 and sometimes even 100 years ahead istr.

Although the terms are fixed and guaranteed and will come about without change, there are factors which can change the buying power of the income and final payment, like inflation. It's just the raw numbers which are fixed, the buying power is at risk.

[tomleafs] 30/6/2020 11:40

atlantic57, if the government did that then no one would want to buy gilts and it would cause the interest rate on them to skyrocket. This would make future government borrowing much more expensive. It would be better for the government to just print some money out of thin air in order to repay the gilt holders. If this behaviour causes inflation to rise it will be the gilt holders that take the hit in terms of purchasing power loss anyway. I'm not sure how those locking in 0.6% for 30 years whilst inflation runs at 2% expect anything other than a poor result.