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Pension boost
Q:
I hope to retire soon and need to boost my teachers’ pension. I wish to invest in investment trusts that will produce a generous and rising income, paid quarterly. I have located some from Henderson, but it is a slow and laborious process, as I also wish to co-ordinate the payment dates to ensure a monthly source of income. Any advice on how to construct such a portfolio would be welcome.
Roger Newman, Harrogate
A:
Jonathan Davis replies: Firstly, you should ask your teachers’ pension scheme if you can buy an ‘added years’ entitlement. If so, that could be your best bet as it is fully tax relievable and quite secure.
I would have thought that capital preservation is equally important to you as income. Thus, I would be inclined to suggest that you look at investment trusts and open-ended investment companies (OEICs) that aim for absolute returns, for example the multi-award-winning British Empire Securities and Trust Plc (www.british-empire.co.uk/ 0845 850 0181).
Alternatively, iimia MitonOptimal’s Arcturus fund is an OEIC from an award-winning investment house (www.mitonoptimal.com/ 01189 528900). Both funds will alter investments to suit investment conditions. Also look at Octopus’s Protected Venture Capital Trust, which gives 30 per cent tax relief and should provide a growing income (www.octopusinvestments.com/ 0800 294 6821).
My general advice for your portfolio would be not to follow trends. As the late and legendary investor Sir James Goldsmith said: ‘If you can see a bandwagon, it’s too late.’ The following have had great runs for many years: equities, bonds and commercial and residential property. Thus, for income you may only be left with cash in the short term until a pullback comes in those other asset classes, as is currently the case with property, giving you an opportunity to invest.
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The limitations of nominees
8 August 2008 [0 comments]Q:
Having read various pieces in your magazine at different times regarding the merits and demerits of certificated and nominee share dealing, it seems to me that certain advantages of holding certificates have been missed.
Indeed, I recently attended an Alliance Trust Roadshow and sat on a ‘shareholder club’ discussion group, where I was amazed to find, among a fairly sophisticated bunch of investors, such a lack of appreciation as to the shareholder rights one loses with a nominee account.
As an extra thread, I also recently attended the AGM of an investment trust in Edinburgh. As a trustee to my grandchildren’s funds, my name was missing from the list at reception. I was told that I was welcome to the meeting as long as I didn’t participate in the voting.
I was further informed that had I informed the plan managers of the trusts beforehand, I could have voted. It occurred to me that nominee shareholders may well find that if they feel strongly about an issue, they might be able to exercise their voting rights in a similar way. I would be interested in your panel’s thoughts on this subject.
Bev Wilkinson
via email
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