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Arbit, HYP and OEICs 2022 Q2

For discussion of the practicalities of setting up and operating income-portfolios which follow the HYP Group Guidelines. READ Guidelines before posting
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Arborbridge
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Re: Arbit, HYP and OEICs 2022 Q2

#519705

Postby Arborbridge » August 4th, 2022, 9:27 am

Revised chart of the three streams. I have now taken the TATE "dividend" as a sale of shares and removed it from the HYP income stream. This way of dealing with it is now consistent with what I did in other similar cases.

Image

As it happens my original comments are still valid: the HYP stream has now popped back above the other two, but just not so dramatically.

Thank you to all those who spotted my error and put me back on the right path.

funduffer
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Re: Arbit, HYP and OEICs 2022 Q2

#520607

Postby funduffer » August 7th, 2022, 9:39 pm

The most alarming line on the chart is the RPI line. I can see that continuing it’s steep upward trajectory for some time - maybe even into 2024.

It will be interesting to see if any of the portfolios can increase at the inflation rate. If I had to guess it will be the HYP line. The ITs are still rebuilding reserves, so it will be difficult for them to match inflation. HYP will benefit from our lower exchange rate from all those foreign earnings and the post pandemic recovery.

Recession could scupper all of them of course.

FD

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Re: Arbit, HYP and OEICs 2022 Q2

#520609

Postby monabri » August 7th, 2022, 10:04 pm

Why is the ARBIT line heading down? Have the income ITs been reducing their dividends or is there a move towards the purchase of ITs with lower yields?

Arborbridge
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Re: Arbit, HYP and OEICs 2022 Q2

#520780

Postby Arborbridge » August 8th, 2022, 5:11 pm

monabri wrote:Why is the ARBIT line heading down? Have the income ITs been reducing their dividends or is there a move towards the purchase of ITs with lower yields?


Good question. I don't know the answer without poking around more. There have been a couple of changes - such as MUT coming in for PLI, IVPU for IVI, and JETI became JEGI - all with lower yields and all foisted on me by corporate changes. I also added a small amount of JGGI which is lower yield.

These may have caused it.


Arb.

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Re: Arbit, HYP and OEICs 2022 Q2

#520811

Postby funduffer » August 8th, 2022, 7:14 pm

Arborbridge wrote:
monabri wrote:Why is the ARBIT line heading down? Have the income ITs been reducing their dividends or is there a move towards the purchase of ITs with lower yields?


Good question. I don't know the answer without poking around more. There have been a couple of changes - such as MUT coming in for PLI, IVPU for IVI, and JETI became JEGI - all with lower yields and all foisted on me by corporate changes. I also added a small amount of JGGI which is lower yield.

These may have caused it.


Arb.

In that case it could also be dividend drag, unless you adjust for it in your calculations.

FD

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Re: Arbit, HYP and OEICs 2022 Q2

#520824

Postby Arborbridge » August 8th, 2022, 8:26 pm

funduffer wrote:
Arborbridge wrote:
monabri wrote:Why is the ARBIT line heading down? Have the income ITs been reducing their dividends or is there a move towards the purchase of ITs with lower yields?


Good question. I don't know the answer without poking around more. There have been a couple of changes - such as MUT coming in for PLI, IVPU for IVI, and JETI became JEGI - all with lower yields and all foisted on me by corporate changes. I also added a small amount of JGGI which is lower yield.

These may have caused it.


Arb.

In that case it could also be dividend drag, unless you adjust for it in your calculations.

FD


I calculate the dividend per unit on the day the dividend arrives, using Dividend/units held on the date paid.

Arb.

funduffer
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Re: Arbit, HYP and OEICs 2022 Q2

#521136

Postby funduffer » August 9th, 2022, 7:21 pm

Arborbridge wrote:
funduffer wrote:
Arborbridge wrote:
monabri wrote:Why is the ARBIT line heading down? Have the income ITs been reducing their dividends or is there a move towards the purchase of ITs with lower yields?


Good question. I don't know the answer without poking around more. There have been a couple of changes - such as MUT coming in for PLI, IVPU for IVI, and JETI became JEGI - all with lower yields and all foisted on me by corporate changes. I also added a small amount of JGGI which is lower yield.

These may have caused it.


Arb.

In that case it could also be dividend drag, unless you adjust for it in your calculations.

FD


I calculate the dividend per unit on the day the dividend arrives, using Dividend/units held on the date paid.

Arb.


Yes, but if you say bought some shares on 1st Jan, but did not receive dividends from these shares until 1st July, then for a six month period you would be dividing your income received by an increased number of units. So if you have a buying spree in a portfolio, you will see a drop in dividend per unit, until the new shares start to deliver income, which may be 3 or 6 months on.

This is what I mean by dividend drag.

You could adjust for this by delaying increasing the number of units until the dividend actually arrives, even though the purchase date may be some months previously. Maybe this is what you meant?

FD

Arborbridge
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Re: Arbit, HYP and OEICs 2022 Q2

#521166

Postby Arborbridge » August 9th, 2022, 8:51 pm

funduffer wrote:
Yes, but if you say bought some shares on 1st Jan, but did not receive dividends from these shares until 1st July, then for a six month period you would be dividing your income received by an increased number of units. So if you have a buying spree in a portfolio, you will see a drop in dividend per unit, until the new shares start to deliver income, which may be 3 or 6 months on.

This is what I mean by dividend drag.

You could adjust for this by delaying increasing the number of units until the dividend actually arrives, even though the purchase date may be some months previously. Maybe this is what you meant?

FD


I'm inclined to think that the effect is not very strong in my portfolios these days. They are rather mature, and the degree of topping up a relatively low proportion. If I create new units, they get into the calculation on the same day - even though, as you point out, the dividends could be months away. At one time, I used to try to allow for this by delaying the dividend count in the way you suggest, but quite honestly after running the two systems alongside each other for a year, it didn't make much difference.

The way I am doing it now was discussed with several stalwarts on the boards who seem to know more than I do, so I'm happy to stick with it. At least any error is systematic and will come out in the wash. I am not convinced it explains the drop in income seen in the chart for ITs.

Arb.

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Re: Arbit, HYP and OEICs 2022 Q2

#521171

Postby Arborbridge » August 9th, 2022, 9:02 pm

I just did a sanity check by adding up four quarters' actually income working backwards from the latest.
The four quarters added together have indeed seen a decline in the income, not allowing for any increase in units. Income for the four quarters beginning Q4 2020 was 5% higher than Q2 2022.

Arb.


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