Discussion in 'Listed Investment Companies (LIC) and Trusts (LIT)' started by austing, 19th Sep, 2016.
4 ideas for small and mid-cap exposure
Thank you moderator, I need to remember to include LIC in thread headers so it makes sense in "recent / new posts" links etc. Sorry.
Just sitting here enjoying my morning coffee. Thinking about my overall mix of stocks in my share portfolio. I have decided I have too many stocks. Currently I have 15 (long term would like about 8). Currently I have 41% in LICs (long term aiming for 80%) Others are a mix of A-reits and infrastructure shares. What does everyone elses portfolio look like? Really only interested in LIC percentages.
As a retiree we roughly have the following now:
Direct stocks 12% (OZ)
LICs 80% (88% Oz, 12% International)
Because of the amount of capital invested the number of LICs is usually around 10 - 12. SANF is better when money is spread across a number of Mgrs.
Overtime I expect the direct stocks percentage will keep decreasing as I continue to add to LICs. I'm no longer adding to direct stocks anymore.
For equity asset allocation,
In super I have around 70-75% in LICs and 25-30% in ETFs (VAS + VGS only) I expect this kind of asset allocation to continue.
Outside of super it is around 55-65% LICs, 25% ETFs and the remainder in direct shares. I will continue to add to the LICs and ETFs I like (only VAS and VGS, the others I'll just hold). So asset allocation will slowly look more and more like my super. One day I might feel the need for direct investing, however the more I learn the more I believe LICs superior to my own abilities.
In terms of outside super investments is there a considerable disparity between total amounts?? Are you seek to obtain financial independence early or ????
We only make compulsory contributions to super. Retirement is still a long way away and I would like to think I'll be enjoying retirement before super become available.
Equities outside of super went past our super accounts this year I just realised.
Our largest investment remains property however, though there are no immediate plans for further purchases.
We are only small investors trying to grow a decent portfolio that will enable us to retire early.
The more I learn the less I want to invest directly. And if one did choose to become more involved there is plenty of opportunity to outperform with LICs thanks to the premium / discount factor! And you only have to follow a relatively small number of things compared to investing in direct stocks. And importantly they're generally diversified investments. No risk of a single stock going pear-shaped. A wonderful sector to invest in whether you're wanting to take a passive approach and / or looking to add value.
And meant to add that as retirees 70% is in the SMSF and 30% in the Family Trust. If I was younger it would be the other way around with even more than 70% in the trust which gives one the potential option to retire early.
My target asset allocation is more 50 / 50 Aus and international. At the moment it's actually significantly higher in the international side. I was perhaps a bit gung ho with "getting my money offshore before the Australian dollar tanked."
This is because I will be living overseas for the next 2 - 5 years at least. Possibly longer. And I wanted to maintain my purchasing power overseas.
If I come back to Australia later, which I'm likely to do I'd imagine, I might have a higher tilt towards Australia, due to bonuses of franking, etc. Though I think I'd like to keep it about 50 / 50 anyway, for the sake of simplicity
My largest investment is also property, however my LIC section of my investments are growing fast (helps my IPs are funding the purchases). LICs dont require maintenance/repairs dont miss rent payments, dont need monitoring. I am pleased I have several IPs and they have been excellent investments, but I wont be making further purchases. LICs provide hassle free income.
My biggest worry is if I should buy more DUI or get some WHF!!
Haha and what a massive worry that is
In case someone else is actually fretting over such a decision (I'm sure you're not actually haha) both those LICs are very similar, in the long run. In ten years your results will be 80-90% the same.
In regards to long term lic investing at what dollar value would it be beneficial to look for a discretionary trust for asset protection as well as income streaming?!
I have just been looking at buyers and sellers for various LICs.
AFI and WHF were fairly balanced (buyers are almost equal to sellers).
ARG has almost 3x the sellers as buyers.
I have never paid too much attention to such things, I am guessing the price for each matters to a large extent and many sellers may indicate downward pressure and vice versa, however I am sure there are many other factors. Does anyone else look at these types of figures much when picking your entry points? How do you analyse this data?
Hoping ARG goes a little lower and hits my buy price
I'm currently releasing equity from my Sydney (god bless) portfolio and was wondering if I can somehow lend to money to a family trust to get it kick started with a stable of LICs. Is this possible?
Yes, you can lend money to your family trust to give it capital - it's quite common to do so.
Just be aware that doing so can have implications from an asset protection point of view - your trust would become a debtor of yours, the money you have loaned is part of your estate and can be demanded to pay your creditors.
So if you are setting up a trust primarily for asset protection purposes and you are in a high risk profession (or the director of a company) whereby you may get sued or face bankruptcy, you'll want to get good advice first before proceeding.
But this discussion is probably off topic for this thread - best moved to the accounting/legal forum topic.
This is my current allocation, hoping to get PMC/VGS later this week pending the US rate decision tomorrow, maybe more WHF given the widen gap between share price and NTA. MIR/QVE are a bit expensive at the moment.
Here's mine. Please critique!
Here's mine as well. Only I can't produce one of those impressive pie charts!
Direct Shares 10%
VAS - 17%
BKI - 10%
WHF - 10%
MLT - 10%
ARG - 8%
VGS - 8%
PMC - 5%
MFF - 5%
FGG - 5%
Cash - 12% Still to be invested. This is in my SMSF. I have just started to replicate this with our family trust but are only 5% down the track. Keen to add some DUI, AUI and AMH.
I have been reading everything I can and are nearly through The Falcons booklist but one of the biggest things I think about and doubt myself on is my asset allocation. At present I've got 23% international exposure, I'm thinking of around the 25-30% allocated overseas. What are others thoughts?
I am no expert so can't really comment but I think you set the asset allocation you are most comfortable with. My target allocation for portfolio outside of super is 80/20 Aus/Int
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