DeBriefed wrote:Yes I have wondered about unitisation: is it very time consuming?
I do agree that in the end Net Worth is what matters and where it comes from is less critical. The reason I want to track is mainly to check whether it's actually sensible for me to be investing in individual shares at all, or whether I should chuck everything in a handful of trackers and be done with it. I'm pretty sure financially the latter would be better. I only got into individual shares because I didn't want too much exposure to financials before the financial crash (yet they seemed to make up a huge amount of the FTSE), and then after that I bought some housebuilders because I didn't yet own a place and wanted to get some exposure to the housing sector in case prices continued to rocket. Now I don't have any particularly strong preferences along those lines and my picks have been more driven by sectoral views (e.g. that commodities were oversold) that have turned out to be .... erm... shall we say underwhelming in their accuracy (so far at least!)?
However, I do feel that when I am retired I would like to be able to make these kinds of judgements, and will have more time to research them properly, so there is something to be said for "getting my eye in" as long as I don't lose my shirt in the process. Therefore I'm pretty interested to know just how much better/worse my individual stock picks have done compared with my index trackers - but I do think I will probably need to unitise to do that in any kind of sensible way.
If you want to compare individual shares and trackers, unitisation doesn't really help. My method is to have a cash flow for the overall portfolio and for each holding, which includes purchases as negative elements and dividend payments, sales and current value as positive elements. You can then use the XIRR function to work out the rate of return for that individual holding, or you can amalgamate them to get the XIRR for that part of your portfolio.
If you really want to compare them then you need a common start date, as the results will vary with start date. I have a few residual holdings of OEICs which are a useful yardstick to my own performance.
Hence the IRR for my overall HYP is 10.4% since April 1987, the IRR for the shares held past and present vary vetween -81.5% and +129%, the IRRs for the OEICs are 11.9% for JPM Natural Resources (Held since it was Ebor Commodity in 1970), 9.1% for M&G Dividend, held since 1975 and 8.0% for Threadneedle UK Equity Income held since it was Eagle Star High Income in 1993.
Obviously the respective IRRs vary from time to time, as the market goes up and down. This table shows how my portfolio has performed to the present day from the end of each year since 1998:
Code: Select all
Since Acc Unit IRR
31-Dec-98 5.89 8.05%
30-Dec-99 6.85 7.59%
31-Dec-00 6.68 8.25%
31-Dec-01 6.43 9.12%
31-Dec-02 5.23 11.44%
31-Dec-03 6.38 10.66%
31-Dec-04 7.59 9.99%
30-Dec-05 9.69 8.50%
31-Dec-06 12.25 6.84%
31-Dec-07 12.41 7.49%
31-Dec-08 7.41 15.78%
31-Dec-09 10.24 12.86%
31-Dec-10 12.32 11.65%
31-Dec-11 13.45 12.15%
31-Dec-12 15.80 10.85%
31-Dec-13 19.56 6.70%
31-Dec-14 20.34 8.15%
31-Dec-15 21.42 11.37%
You can see how the IRR varies as the "accumulation unit" value fluctuates.
TJH