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HYP1 vs. FTSE 250

General discussions about equity high-yield income strategies
pbarne
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HYP1 vs. FTSE 250

#4808

Postby pbarne » November 14th, 2016, 1:48 pm

On Another thread it was asserted that the performance of a FTSE250 tracker with some capital sold off to supplement income would have outperformed HYP1 since the TR figures looked a lot better for the tracker. I posted that I thought the sequence of returns would affect this as bad capital performance in the early years leads to selling when value are low.

Here's a stab at a comparison with the following assumptions:
- assume the HYP 1 year Nov-Nov aligns to a calendar year for FTSE 250
- the income needed to match HYP1 come is FTSE250 yield supplemented by with capital sales
- the extra sales happen at the end of the year

Code: Select all

      FTSE 250  Updated  FTSE 250   FTSE 250  HYP 1   Shortfall  Running
      Index     Cap Val  His Yield  Income    Income  Sale       Cap Val
2000      6548        -          -         -       -          -   75,000
2001      5939   68,025      2.85%     1,942   3,451      1,509   66,516
2002      4319   48,372      3.06%     1,479   3,474      1,995   46,377
2003      5802   62,301      3.41%     2,126   3,197      1,071   61,230
2004      6937   73,208      2.76%     2,019   3,205      1,186   72,023
2005      8794   91,303      2.74%     2,504   3,546      1,042   90,261
2006     11178  114,730      2.43%     2,793   4,131      1,338  113,392
2007     10658  108,117      2.28%     2,469   4,452      1,983  106,134
2008      6361   63,344      3.63%     2,301   5,040      2,739   60,605
2009      9307   88,673      2.97%     2,632   3,187        555   88,118
2010     11559  109,439      2.58%     2,819   3,297        478  108,962
2011     10103   95,237      2.90%     2,762   3,843      1,081   94,156
2012     12375  115,330      2.95%     3,398   4,289        891  114,439
2013     15935  147,361      2.72%     4,007   5,828      1,821  145,540
2014     16085  146,910      2.70%     3,967   5,601      1,634  145,276
2015     17430  157,424      2.59%     4,081   6,093      2,012  155,412
   


Comparing running capital values:

Code: Select all

      Running  ( HYP 1 
      Cap Val  Cap Val )
2000   75,000     75,000
2001   66,516     75,414
2002   46,377     66,180
2003   61,230     72,177
2004   72,023     80,450
2005   90,261     98,367
2006  113,392    127,330
2007  106,134    140,417
2008   60,605     79,884
2009   88,118     97,485
2010  108,962    113,893
2011   94,156    114,218
2012  114,439    124,335
2013  145,540    144,000
2014  145,276    151,897
2015  155,412    149,974
   


So FTSE 250 ahead by a bit but with bigger drawdowns in 2002/2008.

Cheers,
P

toofast2live
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Re: HYP1 vs. FTSE 250

#4888

Postby toofast2live » November 14th, 2016, 5:01 pm

Thanks, P. Always good to see some analysis. I suppose there are etf costs and transaction costs but nevertheless it shows there's more than one way of skinning a cat. Or putting food on the table.

pbarne
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Re: HYP1 vs. FTSE 250

#4948

Postby pbarne » November 14th, 2016, 7:16 pm

toofast2live wrote:Thanks, P. Always good to see some analysis. I suppose there are etf costs and transaction costs but nevertheless it shows there's more than one way of skinning a cat. Or putting food on the table.


Yes both come out with a similar result over this timer period.
I should have clarified I ignored costs in this comparison.


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