I was wondering whether anyone had any thoughts on wealth preservation investment trusts.
My portfolioās 100% in equities, so Iām looking to diversify my Sipp a little as Iām getting older and Iād like to smooth out future corrections/crashes.
Rather than add trusts or ETFs for bonds, real estate, infrastructure, commodities and so on, Iām toying with the idea of adding one or two of the following āall weatherā-style ITs instead:
Capital Gearing Trust (CGT) ā The frontrunner. I have a lot of trust in its manager, Peter Spiller, who has been at the helm for nearly 40 years. The ongoing charge is also reasonable at 0.58%.
RIT Capital Partners (RCP) ā Originally set up to manage the Rothchildsā wealth, this oneās a bit different and more volatile. It offers access to some securities that would otherwise be nigh impossible for retail investors to get their hands on. The ongoing charge is not too bad at 0.66% and I think it would complement one of the others quite well.
Ruffer Investment Trust (RICA) ā The 1.08% ongoing charge puts me off because youāre more or less getting the same thing cheaper with CGT. It also has a relatively short track record.
Personal Assets Trust (PNL) ā Probably bottom of my list at the moment because it holds a fair few stocks that I already have exposure to through Fundsmith such as MSFT and ULVR.
Iād be looking at a 5-10% allocation initially, which Iād increase as I approach retirement, and Iām leaning towards a 50:50 split between CGT and RCP, but Iād welcome any thoughts on the above trusts and the strategy more generally.
The LifeStrategy 100% is effectively VWRP and VWRL, depends what currency youāre looking for I guess, but you could just work your way down as you age.
*EDIT Ok so you would have a 0.15% FX fee from 212 potentially on each trade, but the ongoing OCF of Lifestrategy is much lower than that of the two trusts you picked.
I hadnāt, no. Thatās a good shout, I would welcome any other suggestions. I could perhaps combine CGT with one of the 20-40% LS funds or ETFs to lower my costs. I could access the OEICs through my VG Sipp. Decisions, decisions!
Yeah, I find RCP quite intriguing, Iāve been doing a bit of digging through its holdings, and thereās a fair few hedge funds and private equity funds. You would imagine the Rothchild family has some good connections and if itās good enough for themā¦
I think CGT plus RCP would offer more of what Iām missing in terms of some exposure to commodities and real estate as opposed to purely bonds. The equity part of the LS funds/ETFs would also mirror much of what I already hold through VGās global all-cap fund.
Another way is selling some of the all-cap units and buying the VG short term government bonds fund. Not for the returns but to smooth the curve. Iām wary of actively managed funds and the VAGP part of the LS funds contains longer term bonds, which will tank when eventually interest rates rise againā¦
