Investor Views: 'I'm One of Thatcher's Original Citizen Shareholders'

Retired investor Peter Glazebrook made money from the privatised industries of the 80s, but now says he favours investment trusts for his ISA

Emma Simon 25 November, 2021 | 5:41AM
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Woman facing piggy bank

Like many people his age, Peter Glazebrook first became interested in stock market investmenting as a result of the privatisations that took place in the 1980s.

Led by Margaret Thatcher, the then-Conservative government encouraged ordinary savers to apply for shares in companies like British Gas and BT when they were floated.

Now in his early 70s, Peter says the culture of investing established by the widely-publicised moves kickstarted his investing.

“I was one of the original ‘Sids’ [the name used for ordinary retail investors in the advertising campaign ahead of the British Gas privatisation], and that's how it started," he says.

"I made a bit of money from these various share offerings, and that helped get me interested in investment.”

Peter retired from his work as a lawyer seven years ago, and has enjoyed dabbling in shares over the years. Indeed, it became a hobby in his retirement.

“Initially I was investing in PEPs (Personal Equity Plans) and then ISAs when they launched. I've also had various pension and investment accounts," he explains.

Initially, Peter bought individual shareholdings. As well as holding shares in many privatised companies, he has invested in a range of other companies, including successful FTSE blue chips, like the construction firm Taylor Wimpey (TW).

Taylor Wimpey has benefited from rocketing house prices in recent years, and the various government schemes that have tried to boost housing supply in the UK — for example the Help to Buy scheme, which offered a low deposit route for first-time buyers purchasing a new-build home.

According to Morningstar data, investors in Taylor Wimpey have seen annualised total returns of 19.67% over the past 10 years, comfortably outperforming the 7.02% annualised returned by the FTSE 100 over the same period. Over three years, investors have seen annualised returns of 7.3%, again higher than the annualised 4.95% return offered by the FTSE 100.

Margaret Thatcher on the campaign trail in 1975

Discount Dealing

Peter says that when it comes to buying shares there have been “some misjudgements as well as a bit of luck”. 

“The successes have been balanced out by some holdings that have not performed as well.”

For example, he did have a holding in Marconi, the British telecommunications company, which went bust in 2006.

Perhaps as a result, Peter says he does not quite have the risk appetite he once did. For a number of years, he has focused on investment trusts instead. He says they offer far greater diversification than individual shares, while their closed-end structure offers a more flexible (and cost-effective) investment vehicle than many open-ended funds. 

“On the whole, they have been very successful investments for me,” he says.

In particular, Peter invested in a number of investment trusts in the JP Morgan stable, which have delivered consistently good returns.

They include JPMorgan European Discovery (JEDT) and Mercantile Investment Trust (MRC).

As the name suggests the former is an investment trust primarily invested in smaller companies in Europe. It does not include the UK within its investment portfolio. As it has a small cap bias this could make it seem higher risk, but Peter says that the diversified portfolio has delivered good long-term returns.

According to Morningstar data the 3-star-rated trust has delivered total annualised returns of 18.49% (based on share price, rather than NAV). This has been remarkably stable over time, with similar returns seen over both five and 10-year periods.

Mercantile is another trust with a good long-term track record, and has a 4-star rating from Morningstar, reflecting its strong performance against peers over recent years.

It aims to achieve long-term capital growth from a portfolio of UK smaller and medium-sized companies, most of which are listed on the London Stock Exchange.

Over the past three years it has delivered total annualised returns of 16.78% (again based on share price rather than NAV), and the trust has a current yield of around 2.44%.

Despite their long-term track records both of these trusts are currently trading on discounts, with shares in Mercantile trading at a discount of 8.28% relative to the trust’s NAV, while shares in JPMorgan European Discovery are trading at a 10.2% discount.

Good Moves

Peter, who lives with his wife in Bromley, Kent, uses a number of different platforms to manage his various investments. He and his wife both use AJ Bell for their ISA holdings. His wife switched over too after having an ISA with a local adviser for a number of years. However, it was limited to open-ended funds, which she found restrictive. Peter also has a Sipp with Hargreaves Lansdown and an investment account with Interactive Investor. 

He says having different savings vehicles enable him and his wife to manage their money more effectively in retirement, particularly in relation to tax.

“The pension freedom rules made Sipps and pensions a lot more attractive, but I’ve also been a lot more aware how I want to preserve my pension money. Before I might have been a bit more speculative when it came to my investments; now I am trying to be more responsible.”

As well helping them enjoy retirement, Peter has also been able to use his savings and investments to help his children. “From their point of view as well as mine, investing has been a good thing to do," he says.

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
JPMorgan European Discovery Ord534.07 GBP1.15Rating
Taylor Wimpey PLC2.10 USD0.00

About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk