Ideas please.

Having just funded our ISAs we are looking for ideas of what to invest in.
We have most of the usual but someone might come up with something new. Yield to be above 4%, preferably 5%.
Have been taking a look at the LLP*s but I don't like this Lloyds Bank led by AH-O. Also RUSP but unsure given current state of play. Even thinking about more BBYB.
All thoughts welcome.
Thank you.
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Comments

  • Nottingham Building Society PIBs - yielding just over 6% at present -
  • Some think that of all the bank Prefs NWBD is "safest" 5.6 ish %.

    They are the only ones I have kept, even then I pruned a bit just in case !
  • You may prefer RUSC to RUSP not quite as lucrative, but they do have a maturity which might appeal. YTM just under 7% I think at present
  • Co-operative Group 42TE at 5.5%+ (looks more solid now with improved trading at stores) or Provident (who have just completed their rights issue) can be had for 5% and more on the 2021 bond
  • Co-op Group 42TF also looks reasonable - the repayment of capital over the life of it may also be of interest to some.
  • Sorry - forgot - it's over 6% as well YTM
  • Premier Oil PMO1 at about par is also worth considering at 6.5%

    I know you said you had the usual suspects but possibly you might not have the odd one above, or, as happens with me at times, haven't considered them lately
  • Thank you Woz. Thank you beekey. We will think about what to do.
  • Noticed that Co-Op Group 42TF dipped a little yesterday so took opportunity to buy another chunk at 6.15p which I make an IRR of 6.434%

    I feel confident that they will still be around in 2025 so that's a nice return on what I consider a boring buy and hold.
  • Belated thanks for this. I bought a few this a.m. to experiment. Bought 15,[email protected] for an all up £1,000. For this I gather I will receive £159 eight times, total £1,272. Deducting the costs of £1,000 leaves £272 over 8 years i.e. about £34 a year. 3.4%? Admittedly a very rough calculation but I thought I would be closer to your IRR 6.434% There must be a very big flaw here somewhere?
  • Ah, but you can't work it out like that. This is not like a bond in that you get interest each year (or twice each year) and then at the end you get your original stake back. Don't worry, it confused me before I got started on these.

    If you use Excel then they have an IRR calculator which works out the internal rate of return on this type of security.

    Using my version I make IRR based on 6.2p come in at 6.38% but this is affected by how many you buy and your dealing charges.

    Don't forget that small changes in price at this level does make significant changes to IRR.




  • Thank you muchly. Like you we think the Coop Group is O.K. now. We have some of the 42TE. These 42TF appear to have a nice return and we think we could add these to our ISAs and forget about them - well not quite but you know what is meant. Thank you again.
  • Hi Laughton,

    May I ask how many you were able to buy in a single trade ? Selftrade seem to have a limit of 50,000 (about £3.1K) and I cannot seem to up this.
  • On the last top up I bought 200,000. OK that sounds a lot but they were only 6.2p each. I got an online quote for 35,000 and then telephoned iDealing to ask if they could get 200,000 at the quoted price. Luckily iDealing don't charge extra for this so dealing charges were only £9.90 plus the stamp duty.
  • Oh no! You lot are all buying 42TF so the price has gone up. That'll teach me.
    I'll have to wait now until, hopefully, the price drifts down again.
  • Enquest 7% 2022 (ENQ1) looks like it is set to resume cash payments in August if the Brent oil price averages above $65/bbl for the 6 months up to 15th July (current average $69.1) I think you will be due the full 6 months interest if you buy before 15th July.
  • Hi jerryg - I've lost track of where I kept a note of the details re Enquest - is that definitely just an average of over $65 for the 6 month to the ex div date or does it also have to have also been above $65 for the whole 6 months?

    Be nice to receive some actual cash after all this time of accumulating additional bonds.
  • Laughton,
    Yes it will! It's an average over $65 for the 6 months to the ex div date which is one month before the payment date, 15th July I think. See quote from Enquest & link below......regards

    The "Cash Payment Condition" will be satisfied in respect of any interest payment (as determined by EnQuest) if: (i) the average of the Daily Brent Oil Prices during the period of six calendar months immediately preceding the "Cash Payment Condition Determination Date" is equal to or above US$65.00; and (ii) as at the relevant "Cash Payment Condition Determination Date", no payment default has occurred and is continuing under EnQuest's senior, secured revolving credit and letter of credit facilities agreement between, amongst others, EnQuest and BNP Paribas asfacility and security agent dated 6 March 2012.


    http://www.enquest.com/~/media/Files/E/Enquest/bond docs/ENQUEST_ Retail Notes FAQs.pdf
  • Just bought a few more 42TF.

    Quoted 6.25 pence for 80,000 and 6.20 pence for 70,000 - so went for the latter. That was online with Selftrade

    Woz
  • Very quiet on here - what's everyone doing?

    I managed to pick up another chunk of Co-Op 42TF yesterday at 5.50p for an IRR of 6.29% which I am more than happy with. I especially like the idea that they are effectively paying back the capital as we go along. Only downside is that they only pay once per year but that at least delays the temptation for me to invest the "coupon" in something I shouldn't.

    Toyed with the idea of buying some more Enquest ENQ1 but with the current oil price I guess they'll be back to paying coupons in PIKS. Great "interest" rate though assuming they last the distance.

  • Laughton, I'm afraid not a great deal regarding Fixed income Securities
    My last transaction was for the new issue REGIONAL REIT LTD 4.5% SNR 06/08/2024 GBP2000 (SEDOL:BG1G105) last August.
    Very little activity during 2018, with the exception of buying a few more Preference Shares earlier in the year, after Aviva Plc attempted to buy back their Preference Shares at par, thus creating a buyers opportunity. Most Preference Shares values have dropped further since 1st July to 31st December, although the first few days in 2019 have seen a small rebound (thus maybe a turning point?).
    With the lack of new securities, I have had to buy a few alternatives, eg INPP, THRL, JLEN, UKW and TRIG. Being a customer of AJ Bell, I also picked a few of their own IPO (AJB)
    So not so great on the Fixed Income side
  • Laughton: Hello. Have you received today's 42TF payment yet please? Had the 11% interest on the 20/12/2025s but no payment for the 42TF, as yet.
  • Hi dandigirl.

    idealing paid this morning (on 2 ISAS and 1 SSAS account).

    Now need to think about what to do with the cash.
  • Thank you Laughton: With A J Bell - still not in. Maybe they are not used to such a holding. Hopefully it will be posted on Monday. Enjoy.
  • edited December 2019
    FYI alll - Stuff I have with Yield (running, YTM or YTC) above 5:
    Have a Merry Christmas and may we be spared a Financial Fimbulwinter in 2020

    AVIVA 8 3/4% CUM IRRD PRF
    Burford Capital 2022 6.5%
    BP 9% CUM 2ND PRF GBP1
    CO-OPERATIVE GROUP 11% SUB NTS 18/12/2025 GBP
    ECCLESIAST INS OFF 8.625% NON CUM IRR PRF GBP
    ENQUEST PLC 5.5% SNR EMTN 15/02/22 GBP
    GEN ACCIDENT 8.875% CUM IRR PRF GBP1
    LLOYDS BANKING GP 9.25% NON-CUM IRR PRF SHS
    NATWEST 9% SR'A'NON CUM PRF
    NATIONWIDE B/S CORE CAPITAL DEFERRED GBP1
    ONESAVINGS BANK PL 7.875% SUB PERP GBP1000
    PARAGON GRP OF COS 6% EMTN 05/12/2020 GBP100'1
    PRINCIPALITY BS 7% PIBS PERP GBP1000
    ROTHSCHILD CON FIN 9% PERP SUB GTD NTS GBP(BR)
    SANTANDER UK PLC 10.375% NON CUM PRF GBP1


  • dandigirl - common excuse, especially if you've purchased this year, is that "they've paid by cheque and we have to wait for it to clear before crediting your account". That's hapened a couple of time to me with AJ Bell in the past. But don't worry - it's on its way.

    Thanks Couponcopia - I have nine of those already so will spend a few days thinking about the others.
  • edited December 2019
    Yes, thanks for those suggestions Couponcopia.

    I didn’t really have many new places to go with the cash from the maturity of ALP1. I have always restricted my fixed income investments to the bond market and have never really seriously considered preferences.

    Perhaps the time has come to venture off in that direction.
  • "All truly wise thoughts have been thought already thousands of times; but to truly make them ours we must think them over again honestly, till they take root in our personal experience." - Goethe
  • Roger, I'm afraid a number of us have taken to the Preference share route (Prefs = 21% of my total portfolio) , therefore this does have some risk should interest rates rise. However, as one gets older & taking pension., the income could be of more importance. Likewise a fall in the value of preference shares may help your estate to avoid too much IHT at one's departure from this world! Beware that some Pref's are Cumulative, but others are not, in particular the banks. Most Prefs are offering a yield of 5% plus. A balanced & diversified portfolio, with no security taking more than 5% of the total.
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