First, a thank you. Last I week I asked for ideas on replacing Temple Bar in our model investment trust portfolio. I put up a couple of ideas myself – with Dunedin Income Growth (yielding 5%) being the one I thought we might go with. But most of those who replied felt I was being a tad parochial. We have written here several times that Japanese dividends are likely to be more reliable than UK or US dividends over the next few years (thanks to the high levels of cash on Japanese balance sheets), so why not a Japanese Income fund – CC Japan Income & Growth (yielding 3.7%) being the obvious one? It’s an interesting idea – and if you hold a wider portfolio, a great one to look at. But outside the UK, I am not sure that a single country fund is the answer for a very diversified portfolio such as ours.
Another suggestion was technology-focused Herald Investment Trust. Again, you should look at this, but as we already have exposure to both tech and the unlisted space with Scottish Mortgage (as well as RIT and Caledonia, which both hold unlisted investments), it isn’t quite right. Better fits are Bankers Trust, Mid Wynd and Murray International. Our panel of investment trust advisers like all three. I discounted Troy Income & Growth last week because it shares a management company with one of our other trusts and I have to do the same for Bankers (managed by the same group as Law Debenture). I like Murray for its high yield (5%) and am very tempted to put it in. Anyone interested in exposure to emerging markets should definitely look at it. For this purpose, however, it may be too exposed.
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