Merchants Share Discussion Threads

[zac0_4] 27/7/2020 15:58

This has underperformed the FTSE over the last month by best part of 10%. It’s certainly not filling me with confidence at the moment.

[panshanger1] 27/7/2020 13:13

Added a few on a reasonable discount

[zac0_4] 25/7/2020 13:40

I'm not sure if this has been posted previously. An update from trust manager, Simon Gergel, dated 7th July can be found on Merchants Trust website. It's entitled Maintaining a Focus on Income. hxxps://www.merchantstrust.co.uk/podcast

[tim 3] 25/7/2020 12:20

Have concerns here chart looks horrible if 350 goes 300 is next support.

[superiorshares] 25/7/2020 08:53

The biggest problem for the dividend paying trusts is coming.
If they have to cut dividend payments ?.. and I think they will.
Then you are looking at Low or nil growth stocks with a decreasing dividend.
Now that will be very unattractive !

[zac0_4] 24/7/2020 12:10

CHC15 - my aim, when the time is right, is to completely move away from individual shares and investment trusts that focus on and pay dividends. I'll focus more on investment funds to deliver overall capital growth. Watching your capital depreciate over time simply so you can enjoy dividend payments is having less appeal to me day by day! Good Luck with your investments.

[chc15] 24/7/2020 09:00

I have the same issue, use fidelity, 0.2% platform fee, as over 250k, funds doing well overall. Use vanguard direct at 0.15%, Lifestrategy funds doing ok. I use iweb for IT holdings, I have around 20 IT's, and they have performed much worse, apart from SMT, and a few others. My holdings in MRCH and CTY not doing well at all!

[zac0_4] 23/7/2020 18:50

Gateside - providing the fund generates a good return I'm happy to pay a platform fee. Fidelity charge 0.35% pa. That's £35 a year per £10,000 held. My alternative has been to buy dividend paying shares and trusts, pay a trading cost and spend my time watching my capital, seemingly, continuously be eroded. I might not pay a platform fee for holding MRCH but it's cost me 22.5% of the value of my capital to hold this over the last 12 months. As the advert says, 'You do the maths!'

[gateside] 23/7/2020 17:48

I avoid funds too, as most brokers charge a percentage fee for holding funds in an ISA. I stick mostly to shares and have just a few investment trusts, MRCH being one of them!

[redponza] 23/7/2020 16:19

Hi Zac,
That's because I can only buy things listed on the main board (ie investment trust) but not necessary open end fund...

[zac0_4] 23/7/2020 13:44

redponza - As far as I'm aware there is an emerging markets trust, but I've no interest in that sector so can't comment. The other trust from the Fundsmith stable is Smithson Investment Trust (SSON). Same principles as main fund but in companies of a slightly smaller size. Launched in Oct 2018 at £10.20 per share, now trading at £15.34, so +50% in less than 2 years. What I really like about both the Fundsmith Equity Fund and Smithson Inv Trust is the fact that whilst both suffered downturns in March both have shown excellent rates of recovery since. On the basis that the best time to look for winners is when the battlefield is littered with corpses, I can recommend both. However, your own research is essential! Is there a particular reason why you asked whether Terry managed any investment trusts and not other funds?

[redponza] 23/7/2020 12:21

Zac,
Does Terry Smith run any investment trust? Thanks.

[zac0_4] 22/7/2020 23:17

That’s the one I’m invested in. My holding is directly with Fundsmith. I have set up an automatic withdrawal payment with them on a quarterly basis just like a dividend payment. Not one of my 9 dividend paying shares or trusts, including MRCH, has come close to the performance I enjoy from this fund.

[dandu69] 22/7/2020 22:02

Hi Zac, is this the fund code? GB00B4Q5X527

[zac0_4] 22/7/2020 18:51

My largest single holding is in Fundsmith Equity fund, accumulation version. I’m a big fan of the manager and CIO, Terry Smith. Terry has a view that investing for income simply doesn’t deliver. He says you’re far better investing for capital growth and to take capital when required. I’m coming round to his way of thinking. If you’d have invested £10,000 here 12 months ago you’d have enjoyed £562 of dividend payments but your capital is now £7,313. If you’d have kept £562 back and invested £9,438 in Fundsmith your capital is now worth £10,238. He has a very valid point!

[gateside] 22/7/2020 18:14

Underperformed FTSE again. Maybe there is concern about the sustainability of the dividend?

[mister md] 22/7/2020 14:21

probably needs Brexit to be done and dusted before the undervalued FTSE gets back to reasonable levels ...

[tim 3] 22/7/2020 14:19

Exactly zac.

I would not buy the Nas as it valuations scare me but like the S&P as it has tech but also lots of other sectors its a great index Warren Buffet certainly thinks so and if its good enough for him...

Will try and do a chart of the ftse vs the Dax later but I think it seriously underperforms that too.

[redponza] 22/7/2020 12:39

Yes, tech is hot these days. But if you look around the world, there aren't many indices with a high portion of tech. Let alone tech stocks that can float an index...
I think US is the only major index that have such "world changing" tech stocks...

In fact, when you compare FTSE 100 to non US indices, such as DAX, STOXX600, I do not think FTSE 100 is too shabby.

Maybe the US is more innovative? Though I think it's more related that they are paying more, thus can attract the best talent...

[gateside] 22/7/2020 11:46

Totally agree zac - no point looking at an Index without its half dozen or so star performers.Without technology, FTSE will constantly be lagging behind.

[zac0_4] 22/7/2020 10:58

redponza - I think that’s the point. The FTSE has too little exposure to companies operating in sectors that are growing and, in my opinion, will continue to grow. On that basis the FTSE will continue to lag the DOW.

[redponza] 22/7/2020 10:42

Well, for the share price 500 index, I read somewhere that the bulk of the return has been from the FAANG + microsoft in last few years...

FTSE 100 without these star performers, is doomed to lag behind.

I suspect that if you compare the performance of share price 500 index (SP 494?) excl. FAANG + microsoft to FTSE 100, FTSE 100 is not that poor.

[tim 3] 21/7/2020 23:02

No worries happy sharing some of my own research on the thread.

[zac0_4] 21/7/2020 22:33

I just wonder why the FTSE continues to underperform compared to say the Dow Jones. I’m beginning to think that dividend paying companies, certainly in the uk, return too much profit to shareholders at the expense of business investment. US listed companies return far less to shareholders in the form of dividends. That, and has been pointed out that the uk index lacks technology stocks. 5 year return for FTSE is 13% whilst the Dow has returned 85%. MRCH has returned -0.85% over the same period!

[gateside] 21/7/2020 22:04

Thanks tim 3

I feel part of the problem is that the FTSE has been so poor over many recent timeframes, which means that MRCH is fighting against headwinds all the time.

Regardless of my poor view of MRCH - have to say that there is always good discussion on this bb.