FF and PP portfolio reviews
Posted: April 6th, 2017, 3:22 pm
Two portfolio reviews which make for an interesting contrast. Both are half HYPish but there are interesting differences in the non-HYP halves.
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Portfolio review – (FF) – Year to end March 2017
Purpose & Context
This is a portfolio for a friend (FF) which we run together, and is deliberately cautious. They have a chunk in some bond products, plus quite a large mortgage free property, but a low-paying job, and several years to retirement. The aim is for this FF portfolio to ultimately yield an income equivalent to the job and to be a substitute for the pension that they do not have.
Platform & Charges
Everything is held in Interactive Investor (II) at a cost of £80/year. The free trades are sufficient for most purposes in this portfolio. Almost nothing happens all year long. I’ve relaxed to taking a one-per-year dump from the II platform into spreadsheets and calculating one end-year comparison spreadsheet so as to minimise time on admin.
Strategy
The first tranches that came in were put into 30-35 HYP-selected shares. Thereafter additional capital and/or dividends has mostly gone into four Vanguard index trackers so as to provide wider diversification, and more growth upside, and as a comparison. Two recent additions (HUR and CAK) were of less than a half holding in total and are purely for ‘play’ purposes as FF also looks over my shoulder to see what I am doing in the PP portfolio, and as a result wants a smidge of excitement inside the FF portfolio.
Holdings
HYP holdings (34) of one or two chunks summing to 43%:
ASHMORE GROUP; ABERDEEN ASSET MANAGEMENT; AMEC FOSTER WHEELER; BANCO SANTANDER SA; BERKELEY GROUP HOLDINGS; BHP BILLITON; BP; BRITISH AMERICAN TOBACCO; CARILLION; CENTRICA; FENNER; GLAXOSMITHKLINE; HSBC HOLDINGS; IMPERIAL BRANDS; KCOM GROUP; KIER GROUP; LANCASHIRE HOLDINGS LTD; LEGAL & GENERAL GROUP; MORRISON (WM) SUPERMARKETS; NATIONAL GRID; NATIONAL GRID; NEX GROUP; PAYPOINT; PEARSON; PENNON GROUP; RIO TINTO; ROYAL DUTCH SHELL; SEVERN TRENT; SOUTH32 LTD; SSE; STANDARD CHARTERED; TATE & LYLE; TP ICAP; VODAFONE GROUP
Index funds summing to 57%:
VANGUARD FTSE 100 UCITS ETF; VANGUARD FTSE ALL WORLD UCITS ETF; VANGUARD FTSE DEV ASIAPAC XJPN UCITS ETF; VANGUARD FTSE DEV EUROPE EXUK UCITS ETF
Sauce of less than 1% in total in the rounding errors:
HURRICANE ENERGY; PATISSERIE HOLDINGS
Capital
Some capital was added this year as a bond matured of 18% of total value, creating a certain amount of dividend lag. Excluding the addition of capital the portfolio value rose by 28% of the start year value compared with 16% rise in the FTSE-100. Apart from the general FTSE response to the GBP devaluation on Brexit vote the most significant rises were VAPX and BAT and almost everything else balanced out risers vs fallers.
Income
Last year income was a dividend yield averaged at 4.9% of average value through the year. This year dividend yield was 4.6% of average value through the year. Dividends are now at two-thirds of income from the day job.
Corporate Actions & Tinkering
The Hurricane and PatVal holdings are just a plaything representing less than half a HYP chunk. PREMIER FARNELL was a corporate action liberating cash on a takeover – interestingly I had not put it in my own PP folio that was created a year later due to my own concerns about the business: it seems the market has a way of curing ills. The TP ICAP merger went through and was held.
Tax
The ISA allowance was filled up at the start of the year with the highest yielding shares, leaving no room for corporate actions. However given that there are 30+ shares the chance of any one corporate action creating a CGT problem was most unlikely and so this was thought to be the better strategy, and it has succeeded. Roughly 30% is now in an ISA-shelter.
Conclusion
Overall this continues to perform. It has been at least as steady as the FTSE and is now far more diversified. The huge dividend lag of the first year is now well behind. I am comfortable balancing the HYP with the index funds and both are delivering. We both sleep at night and it is low maintenance. Most quarters there is just enough activity for dividends to use up the free trading allocation from II and I am happy with their service. Lastly I am happy that my friend can run the FF folio without me if it were ever necessary.
***************
Portfolio review – (PP) – Year to end March 2017
Purpose & Context
This is a portfolio for myself (dsPP) which has a conservative core and a less conservative fringe where I am prepared to take a position in areas where I believe I have a better understanding over the medium term. I still have a mortgage and in time will have a DB pension, but my day job is at the unreliable but interesting consultancy / owner end of the spectrum and so the portfolio may need to deliver in an unpredictable timescale.
Platform & Charges
Everything is held in Interactive Investor (II) at a cost of £80/year. Some additional trading fees are incurred. I’ve relaxed to taking a one-per-year dump from the II platform into spreadsheets and calculating one end-year comparison spreadsheet so as to minimise time on admin.
Strategy
The first tranches that came in were put into 30-35 HYP-selected shares. Thereafter additional capital and/or dividends was mostly going into four Vanguard index trackers so as to provide wider diversification, and more growth upside, and as a comparison. However when oil prices fell a few years ago I put about one-third of the portfolio into RDSB as I felt the market had over-corrected. The profit from that position which I held for about a year was then mentally made available for other similar opportunities and is now in Hurricane which is a minor oil exploration company, so the PP folio is now .
Holdings
HYP holdings (32) of one or two chunks summing to 52%:
ASHMORE GROUP; ABERDEEN ASSET MANAGEMENT; AMEC FOSTER WHEELER; BANCO SANTANDER SA; BERKELEY GROUP HOLDINGS; BHP BILLITON; BRITISH AMERICAN TOBACCO; CARILLION; CENTRICA; FENNER; GLAXOSMITHKLINE; HSBC HOLDINGS; IMPERIAL BRANDS; KCOM GROUP; KIER GROUP; LANCASHIRE HOLDINGS LTD; LEGAL & GENERAL GROUP; MORRISON (WM) SUPERMARKETS; NATIONAL GRID; NATIONAL GRID; NEX GROUP; PAYPOINT; PEARSON; PENNON GROUP; RIO TINTO; SEVERN TRENT; SOUTH32 LTD; SSE; STANDARD CHARTERED; TATE & LYLE; TP ICAP; VODAFONE GROUP
Index funds summing to 12%:
VANGUARD FTSE 100 UCITS ETF; VANGUARD FTSE ALL WORLD UCITS ETF; VANGUARD FTSE DEV ASIAPAC XJPN UCITS ETF; VANGUARD FTSE DEV EUROPE EXUK UCITS ETF
Major oils of 23%:
BP; ROYAL DUTCH SHELL; = 23% (note the valuations of these are excluded from the HYP values above, i.e. no double-dipping)
Minor oils of 13%:
HURRICANE ENERGY
Capital
No capital was added this year but about £7k was withdrawn to complete a project on the house – about the same as the dividends yielded. Hopefully that is the last of the house needs for a long time, and it yields even better in house terms as it is for a lodger. The portfolio value rose by 32.8% of the start year value compared with 16% rise in the FTSE-100. Apart from the general FTSE response to the GBP devaluation on Brexit vote the most significant rises were RDSB and VAPX and BAT and almost everything else balanced out risers vs fallers. The BP inclusion is a very recent one simply to use up some CGT without reducing major oil exposure, i.e. some RDSB was sold into BP because the RDSB position succeeded much better than I had hoped.
Income
Last year income was a dividend yield averaged at 2.7% of average value through the year due to dividend lag from when it was set up. This year dividend yield was 5.6% of average value through the year. Dividends are now at two-thirds of the bread-and-water income required if all else fails !
Corporate Actions & Tinkering
Having some index funds makes life easier when some cash needs liberating, which is one less decision at times like those.
The TP ICAP – NEX merger went through and was held. I sold some StanChart to fund into Hurricane inside my ISA. In due course, I expect I will buy back into StanChart though when remains to be seen.
Tax
I realised that the RDSB position, if it succeeded, would create a CGT problem and so I had about half inside the ISA and half outside it. This proved to be not enough so late in the year I banked some CGT winnings into BP in my trading account. Also inside the ISA I sold some RDSB and bought almost all of my HUR exposure inside the ISA.
Roughly 25% is now in an ISA-shelter.
Conclusion
Overall much better than I had expected – I took the decision to put 25% into major oils and saw that grow to a third or more at which point I top-sliced some into the Hurricane play. It has been better than the FTSE-100 and is now far more diversified. The huge dividend lag of the first year is now one year behind. I am comfortable balancing the HYP with the index funds and in due course will buy more index funds either if new capital becomes available or when I unwind the major oils position. I want more Asia-Pacific-India-Brazil exposure in my indexes but it will take time to build. I must not draw out any dividends this year.
regards, dspp
*************************
Portfolio review – (FF) – Year to end March 2017
Purpose & Context
This is a portfolio for a friend (FF) which we run together, and is deliberately cautious. They have a chunk in some bond products, plus quite a large mortgage free property, but a low-paying job, and several years to retirement. The aim is for this FF portfolio to ultimately yield an income equivalent to the job and to be a substitute for the pension that they do not have.
Platform & Charges
Everything is held in Interactive Investor (II) at a cost of £80/year. The free trades are sufficient for most purposes in this portfolio. Almost nothing happens all year long. I’ve relaxed to taking a one-per-year dump from the II platform into spreadsheets and calculating one end-year comparison spreadsheet so as to minimise time on admin.
Strategy
The first tranches that came in were put into 30-35 HYP-selected shares. Thereafter additional capital and/or dividends has mostly gone into four Vanguard index trackers so as to provide wider diversification, and more growth upside, and as a comparison. Two recent additions (HUR and CAK) were of less than a half holding in total and are purely for ‘play’ purposes as FF also looks over my shoulder to see what I am doing in the PP portfolio, and as a result wants a smidge of excitement inside the FF portfolio.
Holdings
HYP holdings (34) of one or two chunks summing to 43%:
ASHMORE GROUP; ABERDEEN ASSET MANAGEMENT; AMEC FOSTER WHEELER; BANCO SANTANDER SA; BERKELEY GROUP HOLDINGS; BHP BILLITON; BP; BRITISH AMERICAN TOBACCO; CARILLION; CENTRICA; FENNER; GLAXOSMITHKLINE; HSBC HOLDINGS; IMPERIAL BRANDS; KCOM GROUP; KIER GROUP; LANCASHIRE HOLDINGS LTD; LEGAL & GENERAL GROUP; MORRISON (WM) SUPERMARKETS; NATIONAL GRID; NATIONAL GRID; NEX GROUP; PAYPOINT; PEARSON; PENNON GROUP; RIO TINTO; ROYAL DUTCH SHELL; SEVERN TRENT; SOUTH32 LTD; SSE; STANDARD CHARTERED; TATE & LYLE; TP ICAP; VODAFONE GROUP
Index funds summing to 57%:
VANGUARD FTSE 100 UCITS ETF; VANGUARD FTSE ALL WORLD UCITS ETF; VANGUARD FTSE DEV ASIAPAC XJPN UCITS ETF; VANGUARD FTSE DEV EUROPE EXUK UCITS ETF
Sauce of less than 1% in total in the rounding errors:
HURRICANE ENERGY; PATISSERIE HOLDINGS
Capital
Some capital was added this year as a bond matured of 18% of total value, creating a certain amount of dividend lag. Excluding the addition of capital the portfolio value rose by 28% of the start year value compared with 16% rise in the FTSE-100. Apart from the general FTSE response to the GBP devaluation on Brexit vote the most significant rises were VAPX and BAT and almost everything else balanced out risers vs fallers.
Income
Last year income was a dividend yield averaged at 4.9% of average value through the year. This year dividend yield was 4.6% of average value through the year. Dividends are now at two-thirds of income from the day job.
Corporate Actions & Tinkering
The Hurricane and PatVal holdings are just a plaything representing less than half a HYP chunk. PREMIER FARNELL was a corporate action liberating cash on a takeover – interestingly I had not put it in my own PP folio that was created a year later due to my own concerns about the business: it seems the market has a way of curing ills. The TP ICAP merger went through and was held.
Tax
The ISA allowance was filled up at the start of the year with the highest yielding shares, leaving no room for corporate actions. However given that there are 30+ shares the chance of any one corporate action creating a CGT problem was most unlikely and so this was thought to be the better strategy, and it has succeeded. Roughly 30% is now in an ISA-shelter.
Conclusion
Overall this continues to perform. It has been at least as steady as the FTSE and is now far more diversified. The huge dividend lag of the first year is now well behind. I am comfortable balancing the HYP with the index funds and both are delivering. We both sleep at night and it is low maintenance. Most quarters there is just enough activity for dividends to use up the free trading allocation from II and I am happy with their service. Lastly I am happy that my friend can run the FF folio without me if it were ever necessary.
***************
Portfolio review – (PP) – Year to end March 2017
Purpose & Context
This is a portfolio for myself (dsPP) which has a conservative core and a less conservative fringe where I am prepared to take a position in areas where I believe I have a better understanding over the medium term. I still have a mortgage and in time will have a DB pension, but my day job is at the unreliable but interesting consultancy / owner end of the spectrum and so the portfolio may need to deliver in an unpredictable timescale.
Platform & Charges
Everything is held in Interactive Investor (II) at a cost of £80/year. Some additional trading fees are incurred. I’ve relaxed to taking a one-per-year dump from the II platform into spreadsheets and calculating one end-year comparison spreadsheet so as to minimise time on admin.
Strategy
The first tranches that came in were put into 30-35 HYP-selected shares. Thereafter additional capital and/or dividends was mostly going into four Vanguard index trackers so as to provide wider diversification, and more growth upside, and as a comparison. However when oil prices fell a few years ago I put about one-third of the portfolio into RDSB as I felt the market had over-corrected. The profit from that position which I held for about a year was then mentally made available for other similar opportunities and is now in Hurricane which is a minor oil exploration company, so the PP folio is now .
Holdings
HYP holdings (32) of one or two chunks summing to 52%:
ASHMORE GROUP; ABERDEEN ASSET MANAGEMENT; AMEC FOSTER WHEELER; BANCO SANTANDER SA; BERKELEY GROUP HOLDINGS; BHP BILLITON; BRITISH AMERICAN TOBACCO; CARILLION; CENTRICA; FENNER; GLAXOSMITHKLINE; HSBC HOLDINGS; IMPERIAL BRANDS; KCOM GROUP; KIER GROUP; LANCASHIRE HOLDINGS LTD; LEGAL & GENERAL GROUP; MORRISON (WM) SUPERMARKETS; NATIONAL GRID; NATIONAL GRID; NEX GROUP; PAYPOINT; PEARSON; PENNON GROUP; RIO TINTO; SEVERN TRENT; SOUTH32 LTD; SSE; STANDARD CHARTERED; TATE & LYLE; TP ICAP; VODAFONE GROUP
Index funds summing to 12%:
VANGUARD FTSE 100 UCITS ETF; VANGUARD FTSE ALL WORLD UCITS ETF; VANGUARD FTSE DEV ASIAPAC XJPN UCITS ETF; VANGUARD FTSE DEV EUROPE EXUK UCITS ETF
Major oils of 23%:
BP; ROYAL DUTCH SHELL; = 23% (note the valuations of these are excluded from the HYP values above, i.e. no double-dipping)
Minor oils of 13%:
HURRICANE ENERGY
Capital
No capital was added this year but about £7k was withdrawn to complete a project on the house – about the same as the dividends yielded. Hopefully that is the last of the house needs for a long time, and it yields even better in house terms as it is for a lodger. The portfolio value rose by 32.8% of the start year value compared with 16% rise in the FTSE-100. Apart from the general FTSE response to the GBP devaluation on Brexit vote the most significant rises were RDSB and VAPX and BAT and almost everything else balanced out risers vs fallers. The BP inclusion is a very recent one simply to use up some CGT without reducing major oil exposure, i.e. some RDSB was sold into BP because the RDSB position succeeded much better than I had hoped.
Income
Last year income was a dividend yield averaged at 2.7% of average value through the year due to dividend lag from when it was set up. This year dividend yield was 5.6% of average value through the year. Dividends are now at two-thirds of the bread-and-water income required if all else fails !
Corporate Actions & Tinkering
Having some index funds makes life easier when some cash needs liberating, which is one less decision at times like those.
The TP ICAP – NEX merger went through and was held. I sold some StanChart to fund into Hurricane inside my ISA. In due course, I expect I will buy back into StanChart though when remains to be seen.
Tax
I realised that the RDSB position, if it succeeded, would create a CGT problem and so I had about half inside the ISA and half outside it. This proved to be not enough so late in the year I banked some CGT winnings into BP in my trading account. Also inside the ISA I sold some RDSB and bought almost all of my HUR exposure inside the ISA.
Roughly 25% is now in an ISA-shelter.
Conclusion
Overall much better than I had expected – I took the decision to put 25% into major oils and saw that grow to a third or more at which point I top-sliced some into the Hurricane play. It has been better than the FTSE-100 and is now far more diversified. The huge dividend lag of the first year is now one year behind. I am comfortable balancing the HYP with the index funds and in due course will buy more index funds either if new capital becomes available or when I unwind the major oils position. I want more Asia-Pacific-India-Brazil exposure in my indexes but it will take time to build. I must not draw out any dividends this year.
regards, dspp