Tag Archives: pension

June July performance

End of July (what happened to June?!) so let’s see what’s what.

Big cap portfolio.

There have been a few more ‘downs’ than ‘ups’ than I’m really happy with in my big cap portfolio, but then that’s the nature of the stock market. As for general performance, fallers include GlaxoSmithKline and Tate & Lyle, but the main nasty has been JD Sports which through June and into early July fell by nearly 25%. However if you look at JD’s performance over the last three years it’s been a pretty solid non-stop climb. Add to that a sudden upsurge in April, then a bit of a correction was not unexpected. This fall has brought the share price back to where it was about 6 months ago and is also now showing signs of perking up again, so I’m not too worried.

On the performance plus side Rio Tinto and Electrocomponents are up nicely. Rio has moved up 20% from a local low in May, while Electrocomponents continues its general climb which started back in early October 2015. Back then we’re talking of a share price of around 170p, now around the 620p mark.
So despite JD Sports upset, the portfolio is still outperforming the FTSE100 index and is showing an annual rate of growth equivalent of a little over 8%.

Income portfolio.

As for my investment trust based income portfolio, that’s been flat-lining for the last couple of months. Despite this it ‘s still up 12% since its inception in December last year. However in dividends (it is, after all an income portfolio) it has returned an equivalent annual yield of 3.9%. Add that to its capital growth and I’m more than happy with it.

So it’s all very much let things continue on as they are, no plans to sell anything yet. The first real review time for that won’t be till September for the big cap portfolio (its 6 month point). Even then any re-balancing may not occur till its first birthday. Likewise not till December (1 year) for the income one.

End of April finance

End of month finance review time.

What’s happened on the finance and investment side of things? Redrow has done rather nicely but star performer has been JD sports, up neatly 15% over the last month. On the downside, Burberry recently announced a reduction in sales and so suffered a sudden fall in price but looks to be recovering a little. Rio Tinto seems to be on a bit of a downer, but it’s GlaxoSmithKline that’s going to be sold out of the portfolio. So on Tuesday (Monday being a bank holiday) Glaxo will go and be replaced with Persimmon (PSN).
Overall the portfolio is up over 2% and is nicely outperforming the FTSE 100 index. It is generally targeting capital growth, any dividends will be seen as a bonus.


As for setting up an income virtual portfolio I’m doing something a little non-standard. I’ve sorted out 10 high income type investment trusts (Brunner (BUT), City of London (CTY), F&C Capital and Income (FCI), JPMorgan Claverhouse(JCH), Merchants (MRCH), Murray Income (MUT), Schroder Income Growth (SCF), Scottish American (SCAM), Temple Bar (TMPL), Value & Income (VIN)), and have, in my simulation, bought £1,000 of each of them.

The slightly non-standard thing is that having decided on what to buy (based on long term dividend stability / growth) I back-dated the purchase to the start of last December. This does immediately give me an idea of how the income side is performing in respect to dividend generation. The start of December is also an important date regarding some pension stuff I have, so having this income portfolio running parallel to my pension stuff will be useful to me. This straight away lets me see that it’s currently paying out dividends at an equivalent interest rate of 3.5% a year, but if I add this to overall capital growth then since December it’s showing a 10% gain. This compares to an 8% gain in the FTSE100 Total Return Index over the same period.

I’m happy enough with things at the moment. It is a learning experience and will be useful later in life when I’m no longer having a wage as an income but am relying on other investment sources.

Time to think about generating income.

Income please.

As well as my big cap portfolio I’m playing with, I might start a second one looking to see about generating income. A mix of relatively high yield unit trust / OEICs and of investment trusts, say 5 of each. The idea will be very much a buy and hold routine, reviewing it once a year in case any disasters need to be weeded out.
As it will be targeting income I won’t be too concerned about capital growth and will assume any growth in one investment will probably be balanced out by losses in another. Any actual ‘overall growth’ in the portfolio will be through reinvesting any income not withdrawn at yield or dividend payment time. This should be an interesting experiment. Dividends are usually paid out twice a year, so this will not be a portfolio to be ‘rushed’. As a target a 4% income seems a reasonable objective to aim at. As this will be a learning experience I’m not too worried as to what it actually turns out to be, so long as I can gain some knowledge and experience doing it.

As for my main virtual portfolio, then I think I will go for the idea at the start of each month of culling out the worst performer if it really has behaved badly. I don’t want to get into the bad habit of too much churning and replacing things just for the sake of it, that will only rack up unnecessary charges. However cutting losses is so important in ensuring an overall gain. Remember that if an investment falls by say 50%, then a 100% gain will be needed to get it back to where it was.
The portfolio is currently just getting into profit mainly through a nice set of results from JD Sports. Rio Tinto is still looking a bit weak, so if anything’s going to go at the start of next month it is still favourite for the chopping block. It would be nice if it did burst back into life.