MDS1951 HYP-ISH Review 2019
Posted: December 31st, 2019, 5:34 pm
Here's how my HYP progressed during 2019. I made no purchases with new money and withdrew £3,000 from dividend income. First, a table.
The value of my portfolio increased by £13.9k, an increase of 15.2% and slightly above the increase of 12.1% in the FTSE 100. So I kept pace with the market.
Dividend income increased by 14.7%; however, this includes special dividends from Rio and BHP totalling £266 in 2019. When I exclude these and compare the resulting £4,965 with 2018's dividends of £4,562 the increase in dividend income is 8.8% compared with 2018. I was pleasantly surprised by this. However, for reasons which will become clear, I don't expect my dividend income to exceed £4,800 in 2020.
I had quite a busy year with my portfolio in 2019 occasioned by trimming, the takeover of Greene King, and the disposal of some holdings because I took against them for various reasons. I'll start with the disposals which were:-
Pearson - I completely lost confidence in their Chief Executive who has issued umpteen profit warnings
Persimmon - their issues with shoddy houses, trapping buyers in leasehold properties etc made me feel like a dishonest profiteer
De La Rue - heading for the corporate equivalent of the Knackers Yard
SSE - despite offloading their customer list onto Ovo, I'm not convinced their dividend is sustainable, though I was anxious about Mr Corbyn as well
Reckitt Benckiser - I was worried about possible litigation re opioids in the USA, UK companies never seem able to bring these legal actions to a close
Greene King, as we all know, was taken over
The capital values of these companies within my portfolio seemed to be running away with themselves at somewhat above 1.5 times the value of my median holding, so I decided to trim them while their share prices were still high:-
AstraZeneca
Compass
Relx
Unilever
I had already assumed that the special dividends re Rio and BHP wouldn't be repeated in 2020 so I thought that I would be lucky to break through £5k for dividend income. After I sold my shares in Persimmon I changed that thought to being certain that £5k would be unattainable in 2020, a prediction given added weight by De La Rue's cancellation of its dividend for 2020 (we are in danger of going bust) and the cut in Tui's dividend. The trimmings enhanced future dividend income slightly because those shares were on relatively low yields and the ITs into which I reinvested the proceeds had slightly higher yields.
The components of my portfolio are set out below; I wouldn't buy some of them today because the yields are too low, either because of dividend cuts or capital appreciation. However, at the time of purchase the yield of each holding was either close to or above the FTSE100 average.
AstraZeneca
Aviva
Billiton
BP
British Land
Compass
Diageo
Glaxo
Legal & General
National Grid
Pennon
Relx
Royal Dutch Shell
RTZ
Sainsbury
Tate
TUI
Unilever
United Utilities
Vodafone
Wood Group
City of London IT
Merchants IT
Murray Income IT
Murray International IT
Schroder Income and Capital IT
Temple Bar IT
The ITs accounted for 25.6% of my portfolio (excluding cash) by value and the shares 74.4%. I decided at the end of 2018 that I was fed up with taking decisions over share purchases and that I would farm the decision-making out to IT managers.
The IRR for the portfolio increased from 6.8% to 7.9%.
Some time ago I unitised the portfolio on an accumulation basis and in 2019 the dividend income (including specials) increased by 18.1% on a unit basis. The price per unit increased as well and now is £23.85.
Overall I think my experience for 2019 shows again the value of having a diversified portfolio. I have a small IT portfolio that I might add to in future, and I have posted about its performance in 2019 - here's the link if anybody is interested.
https://www.lemonfool.co.uk/viewtopic.php?f=56&t=21076
Finally, I wish everybody a Happy and Prosperous New Year - and good luck to us all with our investments.
MDS1951
The value of my portfolio increased by £13.9k, an increase of 15.2% and slightly above the increase of 12.1% in the FTSE 100. So I kept pace with the market.
Dividend income increased by 14.7%; however, this includes special dividends from Rio and BHP totalling £266 in 2019. When I exclude these and compare the resulting £4,965 with 2018's dividends of £4,562 the increase in dividend income is 8.8% compared with 2018. I was pleasantly surprised by this. However, for reasons which will become clear, I don't expect my dividend income to exceed £4,800 in 2020.
I had quite a busy year with my portfolio in 2019 occasioned by trimming, the takeover of Greene King, and the disposal of some holdings because I took against them for various reasons. I'll start with the disposals which were:-
Pearson - I completely lost confidence in their Chief Executive who has issued umpteen profit warnings
Persimmon - their issues with shoddy houses, trapping buyers in leasehold properties etc made me feel like a dishonest profiteer
De La Rue - heading for the corporate equivalent of the Knackers Yard
SSE - despite offloading their customer list onto Ovo, I'm not convinced their dividend is sustainable, though I was anxious about Mr Corbyn as well
Reckitt Benckiser - I was worried about possible litigation re opioids in the USA, UK companies never seem able to bring these legal actions to a close
Greene King, as we all know, was taken over
The capital values of these companies within my portfolio seemed to be running away with themselves at somewhat above 1.5 times the value of my median holding, so I decided to trim them while their share prices were still high:-
AstraZeneca
Compass
Relx
Unilever
I had already assumed that the special dividends re Rio and BHP wouldn't be repeated in 2020 so I thought that I would be lucky to break through £5k for dividend income. After I sold my shares in Persimmon I changed that thought to being certain that £5k would be unattainable in 2020, a prediction given added weight by De La Rue's cancellation of its dividend for 2020 (we are in danger of going bust) and the cut in Tui's dividend. The trimmings enhanced future dividend income slightly because those shares were on relatively low yields and the ITs into which I reinvested the proceeds had slightly higher yields.
The components of my portfolio are set out below; I wouldn't buy some of them today because the yields are too low, either because of dividend cuts or capital appreciation. However, at the time of purchase the yield of each holding was either close to or above the FTSE100 average.
AstraZeneca
Aviva
Billiton
BP
British Land
Compass
Diageo
Glaxo
Legal & General
National Grid
Pennon
Relx
Royal Dutch Shell
RTZ
Sainsbury
Tate
TUI
Unilever
United Utilities
Vodafone
Wood Group
City of London IT
Merchants IT
Murray Income IT
Murray International IT
Schroder Income and Capital IT
Temple Bar IT
The ITs accounted for 25.6% of my portfolio (excluding cash) by value and the shares 74.4%. I decided at the end of 2018 that I was fed up with taking decisions over share purchases and that I would farm the decision-making out to IT managers.
The IRR for the portfolio increased from 6.8% to 7.9%.
Some time ago I unitised the portfolio on an accumulation basis and in 2019 the dividend income (including specials) increased by 18.1% on a unit basis. The price per unit increased as well and now is £23.85.
Overall I think my experience for 2019 shows again the value of having a diversified portfolio. I have a small IT portfolio that I might add to in future, and I have posted about its performance in 2019 - here's the link if anybody is interested.
https://www.lemonfool.co.uk/viewtopic.php?f=56&t=21076
Finally, I wish everybody a Happy and Prosperous New Year - and good luck to us all with our investments.
MDS1951