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(1) daveh's HYPish Portfolio Review 2019 - The Lemon Fool
(1) daveh's Income portfolio 2020 update - The Lemon Fool
daveh's Income portfolio 2021 update - The Lemon Fool
daveh's HYPish Income portfolio 2022 update - The Lemon Fool
Executive Summary
Performance in income terms was OK again this year. After 2021’s 50% increase in cash terms there was a 19% increase last year and 9.0% this year.
Capital performance has been rather up and down again, with it dropping 3-4% some months and gaining 4-5% some months. Overall, in cash terms (after accounting for cash added), the portfolio has increased by 8.0%
This year accumulation have climbed back to a new peak of £4.36 and income units have climbed to £1.65 (income units were at their maximum value of £1.79 in May 2018). Therefore, in the last couple of years, the majority of portfolio performance is coming from the income and capital performance has been poor. Overall the portfolio performance calculated by XIRR was a rise of 8.25% for the year.
Details and Commentary
Portfolio Constituents
Value Div Fcst
Share Epic Sector %Total %Total Yield
BP BP Oil & Gas Producers 3.55% 3.23% 4.80%
Aviva AV Life Insurance 2.35% 3.43% 7.70%
AstraZeneca AZN Pharmaceuticals & Biotechnology 3.98% 1.74% 2.30%
BT Group BT-A Fixed Line Telecommunications 1.48% 1.72% 6.10%
InterContinental Hotels Group IHG Travel & Leisure 0.55% 0.19% 1.80%
GlaxoSmithKline GSK Pharmaceuticals & Biotechnology 3.24% 2.38% 3.87%
Marks and Spencer Group MKS General Retailers 0.86% 0.00% 0.00%
Lloyds Banking Group LLOY Banks 1.80% 2.02% 5.90%
Mitchells and Butlers MAB Travel & Leisure 0.06% 0.00% 0.00%
Prudential PRU Life Insurance 1.02% 0.35% 1.80%
Persimmon PSN Household Goods & Home Construction 1.79% 1.42% 4.20%
SEGRO SGRO Industrial & Office REITs 4.07% 2.47% 3.20%
Smith (DS) SMDS General Industrials 4.79% 5.27% 5.80%
SSE SSE Electricity 4.00% 3.95% 5.20%
Vodafone Group VOD Mobile Telecommunications 1.28% 2.75% 11.30%
United Utilities Group UU "Gas, Water & Multiutilities" 0.90% 0.74% 4.30%
British Land Company BLND Retail REITs 2.38% 2.53% 5.60%
Tesco TSCO Food & Drug Retailers 1.30% 0.94% 3.80%
Sainsbury (J) SBRY Food & Drug Retailers 1.23% 1.03% 4.40%
South32 Limited (DI) S32 Mining. 1.37% 0.97% 3.70%
Legal and General Group LGEN Life Insurance 2.99% 4.71% 8.30%
BAE Systems BA Aerospace & Defence 5.30% 2.82% 2.80%
Galliford Try GFRD Construction & Materials 0.50% 0.45% 4.70%
BHP Group BHP Mining. 3.32% 3.15% 5.00%
Vanguard FTSE All-World UCITS VWRL Equity Investment Instruments 4.75% 1.58% 1.75%
M and G MNG Financial Services 2.36% 3.95% 8.80%
Henderson Far East Income Ltd. HFEL IT - Asia Pacific Income 1.68% 3.66% 11.50%
The Renewables Infrastructure TRIG IT - Renewable Energy Infrastructure 2.42% 3.02% 6.56%
Vistry Group VTY Household Goods & Home Construction 1.96% 1.79% 4.80%
NatWest Group NWG Banks 1.24% 1.70% 7.22%
Middlefield Canadian Income PC MCT IT - North America 2.57% 2.63% 5.40%
Unilever ULVR Food Producers 2.50% 1.82% 3.85%
Currys Plc CURY General Retailers 0.24% 0.10% 2.16%
Shell SHEL Oil & Gas Producers 3.43% 2.71% 4.16%
LLoyds Banking Group 9.25% Non LLPC Banks 1.63% 2.31% 7.50%
IShares Asia Pacific Dividend IAPD Equity Investment Instruments 2.28% 3.07% 7.11%
IShares EuropeDividend Ucits E IDVY Equity Investment Instruments 2.33% 2.53% 5.73%
S&P Emerging Markets Dividend EMDV Equity Investment Instruments 2.61% 2.57% 5.20%
Gore Street Energy Storage Fun GSF IT - Renewable Energy Infrastructure 2.70% 4.52% 8.82%
Aviva 8.375% Pref AV-B Corporate Bonds 2.25% 3.08% 7.20%
Woodside WDS Oil & Gas Producers 2.12% 4.78% 11.90%
Haleon HLN Pharmaceuticals & Biotechnology 0.86% 0.21% 1.29%
CQS New City High Yield Fund L NCYF IT - Debt - Loans & Bonds 3.13% 5.44% 9.15%
Scottish Mortgage Inv Trust SMT IT - Global. 2.84% 0.30% 0.56%
Greencoat UK Wind UKW IT - Renewable Energy Infrastructure 0.00% 0.00% 6.09%
Portfolio Running Yield = 5.27%
Value Div
Sector %Total %Total
Oil & Gas Producers 9.10% 10.72%
Life Insurance 6.36% 8.49%
Pharmaceuticals & Biotechnology 7.22% 4.12%
Fixed Line Telecommunications 1.48% 1.72%
Travel & Leisure 0.61% 0.19%
General Retailers 1.10% 0.10%
Banks 4.67% 6.03%
Household Goods & Home Construction 3.75% 3.21%
Industrial & Office REITs 4.07% 2.47%
General Industrials 4.79% 5.27%
Electricity 4.00% 3.95%
Mobile Telecommunications 1.28% 2.75%
"Gas, Water & Multiutilities" 0.90% 0.74%
Retail REITs 2.38% 2.53%
Food & Drug Retailers 2.53% 1.97%
Mining. 4.69% 4.12%
Aerospace & Defence 5.30% 2.82%
Construction & Materials 0.50% 0.45%
Equity Investment Instruments 11.97% 9.75%
Financial Services 2.36% 3.95%
IT - Asia Pacific Income 1.68% 3.66%
IT - Renewable Energy Infrastructure 5.12% 7.54%
IT - North America 2.57% 2.63%
Food Producers 2.50% 1.82%
Corporate Bonds 2.25% 3.08%
Pharmaceuticals & Biotechnology 0.86% 0.21%
IT - Debt - Loans & Bonds 3.13% 5.44%
IT - Global. 2.84% 0.30%
Total 100.00% 100.00%
Note: 1...'Value %Total' is the portfolio value of the share as a % of the total portfolio
2...'Div %Total' is the expected dividend of the share based on forecast yield
as a % of the total portfolio expected dividend
This year, my trading was at my usual low levels. I added a little new money (~6.0% of the end of year portfolio value) in addition to reinvesting all dividends. I only sold one share, Petrofac (PFC) at a significant loss, but it could have been worse as I sold for 64p and they went as low as 15p this year.
There were two new purchases:
1) NCYF CQS New City High Yield Fund; bought for its good dividend, its significant discount to net asset Value and that I think the interest rate cycle has turned and we may see capital appreciation as well as the good dividend going forward.
2) SMT Scottish mortgage Investment Trust, I’m normally an income investor but I have been trying to transfer as many of my high dividend shares to my ISAs as possible to bring my dividends below the £1000 allowance this tax year and £500 allowance next tax year. This has meant there was cash available for investment in may taxable account, so SMT was chosen due to its low yield, discount to net asset value and possible growth prospects.
.
The following shares were topped up:
1) GSK, bed and ISA’d with the holding size slightly increased
2) SMDS bed and ISA’d with the holding size significantly increased
3) VOD
4) WDS
5) BLND
6) GSF
7) NWG
8) MCT
9) BT.A
10) AV.B
Most were as suggested by HPTUSS though VOD has been at #1 almost all year, but I haven’t been brave enough to invest more beyond a single top up. I’ll also be adding UKW at the start of the year.
Performance
The portfolio was unitised from September 2003 and the details are shown below.
Capital Performance (dividends reinvested) Accumulation units and Income units
Income Performance
My portfolio contains EMDV, IDVY and IAPD all high yield exchange traded funds and HFEL and MCT which are Investment Trusts. These have been included to add extra diversification to high yielding companies in Emerging and non-UK Markets that I do not feel able to achieve by buying individual shares myself. I’ve also added TRIG and GSF high yielding infrastructure funds investing in renewable energy assets.
I’ve also wanted to invest more in the USA and in this case have included VWRL, which though an all-world ETF is >50% invested in the USA. Though VWRL is not particularly high yield, neither was the high yield equivalent (VHYL) or ETFs investing in US dividend shares (eg QDIV only yielded 2.5% similar to VWRLs yield at the time) so I went for the extra diversity and better total return of VWRL. I will have another look at VHYL as its yield is improving, and it may be a good time to buy. Last year I said I was thinking of adding bonds/debt via bond/debt ITs and had been looking at NYCF, BIPS, SMIF and HDIV. This year I added NYCF, I may look again at the others mentioned this year. I have this year (Octoberish) bought low coupon short dated gilts as away of avoiding tax on my cash. They are not treated as part of my Income portfolio, but I mention it in passing.
Running yield of the portfolio as suggested by HYPTUSS is 5.27% or 5.15% taking the dividends received and the average value of the portfolio over the year.