Vpc Specialty Lending In... Share Discussion Threads

[solarno lopez] 10/4/2024 09:32

Hi CWA in this instance the discussion has been extremely useful introducing many to an alternative investment. Thank you

[cwa1] 10/4/2024 09:11

Cheers r_o_t_a, thanks for the reminder of that

Apologies to all for my off-topic posings on non-VSL matters. I'll try to behave myself now!

[spectoacc] 10/4/2024 07:33

Tbh I dumped into TN25 & T26 when they were c.5%, equivalent to over 8% risk-free taxable, and have done nothing since. Intend to hold both until redemption.

There's very few free lunches - used to hold a lot of Ventus VCT until they sold themselves off, but not keen on any standard VCT/SEIS etc, a licence to print money for the managers.

[cwa1] 10/4/2024 07:28

No need to apologise at all! I was just concerned that I might have missed some trick to minimise the already high tax burden!

The low gilt yield/high maturity value "trick" is a useful one. Is TN25 the current favourite?(I haven't looked in a while)

[spectoacc] 10/4/2024 07:19

Yes, apologies, I should have worded it better - ahead of the tax-free 4% on Gilts, eg a taxable (to CGT) 15%.

Depends on tax position as to what that 4% tax-free is "worth" - at the top rate, quite a lot, but still not better than eg 15% less 20% CGT.

Safe money better in Gilts than fixed rate bonds or corporate bonds/PIBS IMO. Eg 8% on a PIB that carries risk, and is taxable, vs 4%+ on a no-risk, tax-free Gilt.

I'm confident on API/ADIG/GABI, but not enough to put all my chips on them.

[cwa1] 10/4/2024 07:03

Morning Specto

Was interested in your comment: VSL, GABI, API, ADIG all ought to be well north of tax-free 4%

When you say tax free, surely there will be CGT on these(assuming held outside a tax free wrapper)? Or were you meaning after tax 4%?

Just checking in case I've missed something!

[chucko1] 10/4/2024 06:58

In HI, Gilts are just another bond or stock, and so their general asset charge applies, and those charges should be read on their web site as they are pretty low so long as you are not holding funds or a small overall portfolio (whereupon the charge as % of assets is one of the highest of the main on line firms.

ii only charge a fixed amount, independent of fund size, so that is a better option for a larger fund in some respects. Nevertheless, so long as you avoid funds where the charges are materially high, you ought not be concerned - and there is nothing specific about Gilts to be concerned re. charges.

Well, that is my experience at any rate.

[waterloo01] 10/4/2024 06:54

lol. Thanks CWA1.

[spectoacc] 10/4/2024 06:51

Lending to the UK govnt - sometimes it's Guilts ;)

VSL, GABI, API, ADIG all ought to be well north of tax-free 4%, but Gilts also have total capital safety if held to redemption (for the past few hundred years anyway).

[cwa1] 10/4/2024 06:49

hi waterloo01. I hope you don't mind me pointing out but it is GILTS not guilts!

[waterloo01] 10/4/2024 06:31

thanks again. I'll certainly look at guilts. As a higher rate payer, I need a divi rate of 7% ish to beat guilts post tax. VSL certainly fits that bill.

[spectoacc] 10/4/2024 06:21

Curious @waterloo01 - that says a 0.45% charge, but I've not paid one.

Yes re calc - c.4% tax-free, plus the 0.125% pa taxable. There's interest to accrue/pay depending on when the last interest payment was (but again, will be tiny).


Edit:
"Shares
Including UK and overseas shares, investment trusts, exchange-traded funds, VCTs, gilts and bonds.
No Charge"


Definitely no 0.45%.

[metis20] 09/4/2024 19:47

re#1663 - another approach to the return per share

shares in issue 278mn

returning c£11.9mn to shareholders

c£11.9mn/278mn = £0.0428 or c4.28pps

[waterloo01] 09/4/2024 17:06

As an example, with HL the 31/01/26 guilt can be bought for 93p. If held to redemption you get £1.00, about a 7.5% return over 21months, just under 4% per full year, tax free. Is that about right?

HL do seem to suggest a charge for holding? Thanks for your patience

[spectoacc] 09/4/2024 16:38

It's worth a Google - there's some good articles on it - and I'm only talking conventional Gilts, Linkers are very different creatures.

[waterloo01] 09/4/2024 16:24

Thanks again. Getting my head around it.

[spectoacc] 09/4/2024 15:43

No, it's annual, and is what you want - absolute minimum income (taxable), and maximum capital uplift (gradually to par, ie £100).

So if you buy say TN28 at £86.50, on 31/01/28 you'll get back £100, and it'll mostly climb up to that level between now and then.

Or take T26 at £93 - a little under 21 months to run, during which time it'll rise a guaranteed £7, all tax-free. It won't quite be linear due to changing rates expectations, but it will redeem at par.

Edit - no holding charge on Gilts, that's on funds.

[waterloo01] 09/4/2024 15:34

thanks. A question. Take the 1st on the list with HL. It's a running yield of 0.135%. Assume that's monthly, only 1.62% yearly? What am I misunderstanding?

HL also have a .45% holding charge

[spectoacc] 09/4/2024 15:33

Yes:



Eg the top 2, can be bought through most brokers but some don't deal online (HL do).

0.125% coupons, taxable, ie next to nothing.

Uplift to par is entirely tax-free. And don't even need to hold them until then - if you sell in say 6 months, that gain is also tax-free.

And little chance of much interest rate movement in that time due to them being short-dated - ie if rates expectations change, these change not that much. Is possible to lose on them if you needed the money in a hurry - holding to par is best - but generally they'll appreciate in capital value a little every week.

An absolute gift for cash outside of tax wrappers.

[waterloo01] 09/4/2024 15:29

SpecoAcc, not traded bonds directly, only via bond funds. Something I should research. Any pointer as to where to start? Any 'tickers'?

[spectoacc] 09/4/2024 15:26

@waterloo01 - 100% of mine is in short-dated, very low coupon Gilts. Next to no tax at all, an absolute gift.

[solarno lopez] 09/4/2024 11:29

Thanks 2wild

[2wild] 09/4/2024 11:06

With all the record all time highs, increased corporate activity and successful IPOs in USA, during last few weeks. Suspect equity portfolio will show at meaningful increase at end of March, if not end February, due imminently. I think decent chance of 80p NAV realisation plus Dividends.