# Investment Trust Shares



## fionn2011 (18 Apr 2011)

I have significant capital losses on irish bank shares, and would like to purchase shares in an investment trust so that any gains are Capital Gains Tax free. Can anyone recommend large & diversified investment trust(s) that are aimed at eurozone investors?

I am aware of RIT Partners (Rotschchild Investment Trust) traded on the FTSE, but assume this is aimed at the needs of sterling investors?

Thanks in advance


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## mercman (18 Apr 2011)

fionn, In general Investment Trust have lost some of their flavour which they used to hold. Have you considered ETFs which, depending on the sector and choice of fund are more appealing. Consider that the costs involved of Managing the ETFs are considerably less than Investment Trusts or Investment Funds.


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## Brendan Burgess (18 Apr 2011)

Hi Mercman

I don't think that you can use the losses for CGT against the gains on ETFs?


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## Marc (18 Apr 2011)

Brendan is correct. You need an investment trust to offset losses.


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## mercman (18 Apr 2011)

Marc said:


> Brendan is correct. You need an investment trust to offset losses.



???? Or other trading, CFDs or property losses that have arisen. 

But the ultimeat question is whether the investment is made to achieve a profit or use losses against ?


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## fionn2011 (18 Apr 2011)

Yes, its to offset losses on shares. I've already looked into this, and you can't offset share losses against ETF gains.

I agree investment trusts maybe are not as efficient as ETFs, but I could make substantial gains on Investment Trust (shares) without having to pay CGT due to my personal circumstances


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## Marc (18 Apr 2011)

We typically recommend a hybrid approach here which combines the tax efficiency of investment trusts from a cgt perspective with a range of index funds where the currency risk from sterling would swamp the returns such as in bond funds. 

This enables us to select from a range of investment trusts that are fit for purpose in appropriate asset classes without damaging the efficiency of the overall portfolio.


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## fionn2011 (19 Apr 2011)

Marc

Can you clarify this? Are there investment trust shares aimed at eurozone investors, and what are they called?
I am only aware of RIT partners which I assume is aimed at sterling investors


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## Marc (19 Apr 2011)

Currency is a red herring here.

Let's take emerging markets as an example. Many emerging markets funds are based in Us$ and this is the underlying currency. It makes no difference if your home currency is chocolate coins the base currency is US$.

Now assume that the fund is structured as a closed end investment trust listed in London. The fund will trade in sterling on the london exchange but the underying fund is still based in US$. 

Now you hold euros so to purchase you need to change euros to sterling but the fact remains that the underlying fund is still based in US$.

All you are doing is triangulating the exchange rates between euros sterling and us$.

The underlying investment is in emerging markets and therefore the fund is not aimed at sterling investors or eurozone investors but rather at investors seeking exposure to emerging markets.

Where this does matter is in cases where the currency exposure can swamp the investment returns such as in a bond fund. In this case as I pointed out we can use a range of euro specific bond funds.

The other obvious issue to watch out for is a UK centric bias in some "general" trusts which tend to overweight the UK. 

Again we select appropriate trusts for each asset class within a portfolio which deal with these issues.

The end result is a portfolio comprised of a mix of index funds and investment trusts optimised from the perspective of an Irish investor with cgt losses.

A word of warning though this isn't a DIY solution I've personally been investing in investment trusts in the UK for over a decade and I would strongly caution anyone against attempting to do this on their own.


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## Rory Gillen (5 May 2011)

If Brendan does not mind my posting a little advert, www.investrcentre.com provides analysis & recommendations of London-listed investment trusts (companies) across the various asset classes including equities, property, private equity, commodities, hedge & absolute return funds and alternative assets like timber, water & non-investment grade corporate bonds. It is a subscription based website and there is a option to sign up to a Free Weekly Email while you check us out.

Personally, I perfer investment trusts over all other fund vehicles, although ETFs have their merits also.

Rory Gillen


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## taytoman (7 May 2011)

Ok, so could anyone give free advice on investment trusts!

Could anyone even give the names of the major investment trusts that are popular with eurozone investors- I know advice on individual shares is not allowed but all I am only aware of are edinburgh partners european and global oppurtunities funds and RIT partners


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## mercman (7 May 2011)

taytoman said:


> Ok, so could anyone give free advice on investment trusts!



If you are seeking free advice in the Irish Investment world you ain't going to get it. Have you heard the saying 'Anything that looks to be good to be true normally is'.

At the end of the day any Investment is a person's own choice. Nobody is going to do anything for free. There is always an underlying commission payable.

Do your own research or find a stockbroker that specialises in personal investments.


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## Marc (7 May 2011)

Or a professional fee merc!! Not everyone operates on commissions.

As John Ruskin said it is unwise to pay too much but it is also unwise to pay too little.

Lots of people arrange DIY investments and some of them know what they are doing. However the more questions I read on AAM the more convinced I am that on average people would be better off paying a fee for professional independent advice.


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## mercman (7 May 2011)

Marc said:


> Or a professional fee merc!! Not everyone operates on commissions.



Apart from some form of respectability is there a difference ?? In the UK, they have banned commissions in the Investment market, why on earth do they refuse some level of respect to investors. Prefer to pay a one of fee rather than having a rolling commission structure, where an agent earns fee regardless of the performance of an investment.


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## taytoman (10 May 2011)

Ok, can I rephrase my initial query, no disrespect but I don't want to pay €399 for a financial review at this juncture. Could anyone tell me what are the major Investment Funds out there that irish people tend to invest in . I am not looking for advice or endorsements of particular funds, just the names of say 4-5 funds that I can then go off and investigate myself initially, and then consider whether I wish to pay for formal investment advice


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## mercman (10 May 2011)

I think you will find that people on AAM, other than those with being accredited with operating as Professional Financial Advisors would want to go down this road. What would be the point of reccomending funds  on a Forum when they earn their living by offering opinions to fee paying clients. 

Anyway giving tips for shares on AAM is not allowed.


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## taytoman (10 May 2011)

Ok, point taken, i'm not looking for any tips, my query is analogous to what are the top five shares on the ISE or whatever. I think this is a reasonable query and I am sure there are users who are not paid IFA's and know about these things....


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## Rory Gillen (12 May 2011)

Are you looking for equity funds, property funds, non-risk funds, hedge funds, absolute return funds, Actively managed multi-asset funds, private equity funds, bond funds, timber funds, non-investment grade corporate bond funds ? Narrow it down and I'll give you the steer you are looking for. If you are unsure, and unsure where the value lies, then that is a further step in the journey.

Rory Gillen


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## maturin (12 May 2011)

Taytoman,

you could do some research on http://www.theaic.co.uk/ and http://www.trustnet.com

Both these websites have good info on IT's and allow searches based on category.

-maturin.


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## taytoman (15 May 2011)

Thank you both for your advice. I had in mind was either a european or global equity investment trusts, but possibly a diversified multi asset investment trust. I note from trustnet that some of the uk based multi asset funds have a uk bias with heavy allocations to uk equities, so I would like to avoid this. I also would prefer a larger trust as it will presumably be more liquid with more shares traded.


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## Rory Gillen (18 May 2011)

I have analysis of a couple of quoted 'Actively Managed Multi-asset Funds' on my own website www.investrcentre.com 

However, one does have to be a subscriber but you can get my weekly summary email for free by entering your email address on the Home Page (top RHS). That's my bit of marketing if you like.

Best I can do.

Rory Gillen


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