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TJH Portfolio adjustment

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Newroad
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Re: TJH Portfolio adjustment

#639335

Postby Newroad » January 10th, 2024, 9:27 am

Hi Terry.

Whether it's right to buy, who knows (but in my methodology, and from what I understand of yours, we likely would).

Either way, the methodologies are working OK - either allowing a sell high buy low and/or by preventing a larger loss had the trim not been done.

On another note, KGF is also currently in pole position for my next top-up.

Regards, Newroad

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Re: TJH Portfolio adjustment

#639366

Postby tjh290633 » January 10th, 2024, 10:54 am

Newroad wrote:Hi Terry.

Whether it's right to buy, who knows (but in my methodology, and from what I understand of yours, we likely would).

Either way, the methodologies are working OK - either allowing a sell high buy low and/or by preventing a larger loss had the trim not been done.

On another note, KGF is also currently in pole position for my next top-up.

Regards, Newroad

A lot can happen before I am ready for another top-up, not least the possibility of Admiral having to be trimmed. In that case I may be able to make 3 top-ups. That may bring PHP back into play.

TJH

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Re: TJH Portfolio adjustment

#644349

Postby tjh290633 » February 2nd, 2024, 11:52 am

Accumulated dividends have allowed me to top up Reckitt Benckiser (RKT) this morning by 20% at £57.10, during the tea interval in the Test. It was my lowest weighted share having been top-sliced in 2016 when its share price was £70.58. It was the highest eligible share in my top-up rankings, despite its yield of 3.27%. First bought in 2011 at £30.62, with a yield of 4.1%, it has given me an IRR of 9.33%.

My top-up table now looks like this:

Top-up          Income                     Cost                
Rank EPIC Rank EPIC % Income Rank Epic % Cost
1 VOD+ 1 WDS 5.28% 1 LLOY 4.77%
2 WDS* 2 TW. 5.15% 2 BLND 4.61%
3 BT.A+ 3 BATS 5.12% 3 BT.A 4.51%
4 PHP+ 4 LGEN 4.62% 4 VOD 4.36%
5 BATS* 5 AV. 4.52% 5 IGG 4.30%
6 LLOY+ 6 IMB 4.40% 6 PHP 4.22%
7 IMB* 7 VOD 4.15% 7 AV. 3.76%
8 IGG+ 8 BLND 3.83% 8 TW. 3.76%
9 ULVR 9 BHP 3.79% 9 BATS 3.71%
10 TATE 10 SMDS 3.77% 10 KGF 3.57%
11 RKT 11 RIO 3.63% 11 LGEN 3.56%
12 AV.* 12 IGG 3.38% 12 ADM 3.54%
13 LGEN* 13 NG. 3.38% 13 WDS 3.35%
14 S32 14 KGF 3.24% 14 GSK 3.19%
15 SMDS 15 PHP 3.16% 15 IMB 3.15%
16 KGF 16 ADM 3.15% 16 BP. 3.14%
17 UU. 17 BP. 2.96% 17 TSCO 3.11%
18 GSK 18 BT.A 2.93% 18 S32 2.95%
19 BLND+ 19 LLOY 2.92% 19 PSON 2.82%
20 DGE 20 UU. 2.51% 20 SHEL 2.81%

As is my custom, I disqualify any share which, if topped up by 20%, would exceed 5% of either share of income(*) or share of portfolio cost(+). It follows therefore that currently the top eligible shares for topping up are ULVR, TATE and RKT, which all rank equally. VOD has been released from the share of income hurdle, but remains prohibited on grounds of cost. PHP is on the cusp of prohibition on cost grounds.

My portfolio now looks like this:

Value                           
Rank EPIC Weight % Median
1 TW. 4.05% 138.9%
2 ADM 3.92% 134.5%
3 IMI 3.56% 122.1%
4 BHP 3.40% 116.8%
5 BA. 3.34% 114.5%
6 NG. 3.19% 109.6%
7 BLND 3.18% 109.2%
8 RIO 3.17% 108.7%
9 BP. 3.17% 108.6%
10 LGEN 3.13% 107.6%
11 AV. 3.09% 106.1%
12 AZN 3.07% 105.5%
13 SHEL 3.07% 105.5%
14 TSCO 3.01% 103.3%
15 SMDS 2.97% 102.0%
16 SSE 2.93% 100.4%
17 UU. 2.92% 100.2%
18 IMB 2.91% 100.0%
19 KGF 2.90% 99.4%
20 SGRO 2.88% 98.8%
21 GSK 2.86% 98.1%
22 PSON 2.86% 98.1%
23 IGG 2.68% 91.8%
24 BATS 2.67% 91.5%
25 DGE 2.65% 90.9%
26 HLN 2.59% 89.0%
27 S32 2.58% 88.6%
28 LLOY 2.52% 86.5%
29 ULVR 2.46% 84.4%
30 WDS 2.43% 83.3%
31 PHP 2.25% 77.3%
32 BT.A 2.13% 73.1%
33 RKT 2.03% 69.7%
34 TATE 1.86% 64.0%
35 VOD 1.59% 54.4%

Mean 2.86%

Reckitt has moved up two places to 33rd. It will be some time in March when I next make any changes, unless something rises rapidly. My hopes for Admiral were dashed when it dropped suddenly.

TJH

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Re: TJH Portfolio adjustment

#651963

Postby NickNick » March 7th, 2024, 10:17 am

Terry,
Can you please clarify something on your top-up / top-slicing methodology. Are you focussed on book-cost, book-value or both?

For example, if you had 3 shares, AAA, BBB,CCC where 2 have risen in share price and hence book value is higher than book cost while1 has fallen. By some fluke all now have exactly the same good yield, cover etc making them all number 1 rank for topping up. What would your policy say about top slicing vs top-up vs disqualification?



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Re: TJH Portfolio adjustment

#651967

Postby tjh290633 » March 7th, 2024, 10:33 am

NickNick wrote:Terry,
Can you please clarify something on your top-up / top-slicing methodology. Are you focussed on book-cost, book-value or both?

For example, if you had 3 shares, AAA, BBB,CCC where 2 have risen in share price and hence book value is higher than book cost while1 has fallen. By some fluke all now have exactly the same good yield, cover etc making them all number 1 rank for topping up. What would your policy say about top slicing vs top-up vs disqualification?


EPIC         PURCHASE COST         CURRENT VALUE           Question
vs portfolio median vs portfolio median
AAA 150 75 Is this disqualified because the purchase COST is above median or do you ignore sunk cost?
BBB 75 124 is this disqualified because a new purchase would take current VALUE above 125% of median?
CCC 50 150 do you top slice this because the current VALUE is above 125% of median?

AAA is only disqualified if topping up by 20% takes it above 5% of portfolio cost. My median holding cost is about 3%.

BBB is not disqualified, but is unlikely to be high in the top-up rankings, because its value will count against it.

CCC I would be top-slicing, because the criterion is over 150% of median value.

My rankings take the sum of yield ranking and inverse value ranking, and then rank those. This table shows my current portfolio rankings:

Holding   Weight   Yld   W+Y   Rank
ADM 35 23 58 33
AV. 30 6 36 15
AZN 21 32 53 32
BA. 33 30 63 34
BATS 12 2 14 5
BHP 28 17 45 26
BLND 26 12 38 16
BP. 29 18 47 29
BT.A 4 7 11 3
DGE 11 29 40 18
GSK 22 26 48 30
HLN 9 33 42 20
IGG 13 11 24 7
IMB 10 3 13 4
IMI 32 35 67 35
KGF 24 15 39 17
LGEN 23 4 27 9
LLOY 15 13 28 10
NG. 27 16 43 23
PHP 5 5 10 2
PSON 19 31 50 31
RIO 18 10 28 11
RKT 1 24 25 8
S32 6 34 40 19
SGRO 16 28 44 25
SHEL 25 20 45 27
SMDS 31 14 45 28
SSE 17 25 42 21
TATE 2 27 29 13
TSCO 20 22 42 22
TW. 34 9 43 24
ULVR 8 21 29 12
UU. 14 19 33 14
VOD 3 1 4 1
WDS 7 8 15 6

Of my holdings the following are disqualified because of share of income:
EPIC   % Income
BATS 5.34%
TW. 5.26%
LGEN 5.05%
AV. 4.84%
IMB 4.49%
VOD 4.24%

These are disqualified because of share of cost:
Epic   % Cost
LLOY 4.77%
BLND 4.61%
BT.A 4.51%
VOD 4.36%
IGG 4.30%
PHP 4.22%

You will note that my 5% limit on share of cost or income means that any holding above 4.2% in those factors is disqualified.

Hope that explains the situation for you.

TJH

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Re: TJH Portfolio adjustment

#657370

Postby tjh290633 » April 2nd, 2024, 9:56 am

Having built up enough accumulated dividends, this morning I have added 20% to Woodside Energy Lyd (WDS), that being the highest ranking eligible share in my portfolio. Even though they cut their dividend to be paid on Thursday, the yield is still almost 7%, so Im have gone ahead. The deal was done at £15.80. No stamp duty on an Australian share.

As a result my top-up table now looks like this. As aleways I disqualify shares wheich, if topped up by 20%, would exceed 5% of dividend income (*) or of portfolio cost (+).

Top-up          Income                     Cost                
Rank EPIC Rank EPIC % Income Rank Epic % Cost
1 VOD+* 1 BATS 5.30% 1 LLOY 4.74%
2 BT.A+ 2 TW. 5.22% 2 BLND 4.58%
3 PHP 3 LGEN 5.02% 3 BT.A 4.49%
4 BATS* 4 AV. 4.81% 4 VOD 4.34%
5 IMB* 5 IMB 4.46% 5 IGG 4.28%
6 WDS 6 VOD 4.21% 6 PHP 4.19%
7 RKT 7 RIO 3.89% 7 WDS 3.91%
8 IGG+ 8 BLND 3.88% 8 AV. 3.74%
9 RIO 9 SMDS 3.82% 9 TW. 3.73%
10 LGEN* 10 WDS 3.82% 10 BATS 3.69%
11 ULVR 11 IGG 3.43% 11 KGF 3.55%
12 TATE 12 NG. 3.42% 12 LGEN 3.54%
13 UU. 13 BHP 3.34% 13 ADM 3.52%
14 LLOY+ 14 KGF 3.28% 14 GSK 3.17%
15 DGE 15 LLOY 3.24% 15 IMB 3.14%
16 TW.* 16 PHP 3.23% 16 BP. 3.12%
17 BHP 17 ADM 3.19% 17 TSCO 3.09%
18 SSE 18 BP. 3.02% 18 S32 2.93%
19 S32 19 BT.A 2.97% 19 PSON 2.81%
20 NG. 20 UU. 2.55% 20 SHEL 2.80%

This has now released PHP from the cost disqualification and that is now my top eligible share, followed by WDS and RKT.

My portfolio now looks like this:

Value                           
Rank EPIC Weight % Median
1 ADM 4.24% 144.6%
2 SMDS 4.07% 138.7%
3 BA. 3.67% 125.1%
4 IMI 3.62% 123.4%
5 TW. 3.61% 123.1%
6 AV. 3.45% 117.7%
7 BP. 3.21% 109.5%
8 BLND 3.19% 108.8%
9 KGF 3.19% 108.7%
10 NG. 3.09% 105.3%
11 SHEL 3.07% 104.6%
12 BHP 3.05% 103.9%
13 LGEN 3.03% 103.3%
14 TSCO 3.01% 102.5%
15 AZN 3.00% 102.3%
16 GSK 2.95% 100.4%
17 LLOY 2.94% 100.2%
18 PSON 2.93% 100.0%
19 SGRO 2.86% 97.5%
20 RIO 2.76% 94.2%
21 SSE 2.76% 94.0%
22 UU. 2.69% 91.9%
23 WDS 2.65% 90.5%
24 IGG 2.65% 90.5%
25 IMB 2.62% 89.2%
26 BATS 2.61% 89.1%
27 DGE 2.55% 86.8%
28 HLN 2.53% 86.2%
29 ULVR 2.42% 82.5%
30 S32 2.24% 76.4%
31 PHP 2.15% 73.3%
32 BT.A 2.04% 69.6%
33 VOD 1.86% 63.4%
34 TATE 1.77% 60.4%
35 RKT 1.53% 52.1%

Mean 2.86%

WDS has risen from 30th to 23rd as a result. Next activity after the Mayday bank holiday, unless Admiral puts a spurt on.

TJH

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Re: TJH Portfolio adjustment

#657559

Postby csearle » April 2nd, 2024, 8:54 pm

For similar reasons I topped up Vodafone this morning, which was atop my list. For the moment Rio Tinto takes its place at the front of the queue. C.

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Re: TJH Portfolio adjustment

#657564

Postby kempiejon » April 2nd, 2024, 9:11 pm

WDS doesn't pass my 5 years increasing dividend, but it's new the UK market. As noted this year's income is below last years too. I still have my spin off but it can sit there.
Similarly I have excluded VOD for the cut in 2018 and subsequent 5 years static dividend. Both high yield for sure but I want an increasing income too.

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Re: TJH Portfolio adjustment

#659189

Postby tjh290633 » Yesterday, 7:57 pm

SMDS went past my weight limit of 1.5 times the median weight last night. Accordingly I trimmed it by 25% and added 20% to each of PHP, RKT and WDS, being the most eligible shares in my to-up table. My Top-up table now looks like this:

Top-up          Income                     Cost                
Rank EPIC Rank EPIC % Income Rank Epic % Cost
1 VOD+ 1 BATS 5.25% 1 PHP 4.71%
2 BATS* 2 TW. 5.17% 2 LLOY 4.68%
3 BT.A+ 3 LGEN 4.97% 3 WDS 4.56%
4 IMB* 4 AV. 4.76% 4 BLND 4.52%
5 PHP+ 5 WDS 4.54% 5 BT.A 4.43%
6 RKT 6 IMB 4.42% 6 VOD 4.28%
7 IGG+ 7 VOD 4.17% 7 IGG 4.23%
8 LGEN* 8 RIO 3.85% 8 AV. 3.69%
9 ULVR 9 BLND 3.84% 9 TW. 3.69%
10 UU. 10 PHP 3.84% 10 BATS 3.64%
11 TATE 11 IGG 3.39% 11 KGF 3.50%
12 RIO 12 NG. 3.39% 12 LGEN 3.49%
13 LLOY+ 13 BHP 3.31% 13 ADM 3.47%
14 AV.* 14 KGF 3.25% 14 GSK 3.13%
15 BLND+ 15 LLOY 3.21% 15 IMB 3.10%
16 DGE 16 ADM 3.16% 16 BP. 3.08%
17 WDS* 17 BP. 2.99% 17 TSCO 3.05%
18 NG. 18 BT.A 2.94% 18 S32 2.89%
19 TSCO 19 SMDS 2.84% 19 PSON 2.77%
20 SSE 20 UU. 2.52% 20 SHEL 2.76%

As always, I disqualify any share which, if topped up by 20% would exceed 5% of either Share of income (*) or Portfolio Cost (+).

Consequently the most eligible shares are Reckitt (RKT) followed by Unilever and UU.

My portfolio now looks like this:

Value                           
Rank EPIC Weight % Median
1 ADM 4.02% 139.2%
2 BA. 3.61% 125.0%
3 TW. 3.56% 123.6%
4 IMI 3.54% 122.7%
5 BP. 3.51% 121.8%
6 SHEL 3.45% 119.7%
7 AV. 3.22% 111.6%
8 BHP 3.21% 111.4%
9 KGF 3.21% 111.2%
10 WDS 3.20% 110.9%
11 SMDS 3.19% 110.5%
12 AZN 3.13% 108.4%
13 BLND 3.08% 106.9%
14 NG. 3.02% 104.8%
15 RIO 2.98% 103.2%
16 LGEN 2.96% 102.8%
17 LLOY 2.91% 100.9%
18 TSCO 2.88% 100.0%
19 GSK 2.85% 98.8%
20 PSON 2.85% 98.7%
21 SSE 2.80% 97.1%
22 SGRO 2.73% 94.7%
23 IGG 2.70% 93.5%
24 UU. 2.67% 92.6%
25 PHP 2.57% 89.1%
26 IMB 2.55% 88.3%
27 BATS 2.52% 87.4%
28 S32 2.52% 87.4%
29 HLN 2.46% 85.5%
30 DGE 2.43% 84.4%
31 ULVR 2.32% 80.5%
32 BT.A 2.01% 69.5%
33 TATE 1.83% 63.5%
34 VOD 1.78% 61.8%
35 RKT 1.72% 59.6%

Mean 2.86%

SMDS has fallen to 11th position while PHP has risen from 31st to 25th, RKT remains stuck at 35th and WDS has risen from 223rd to 10th.

TJH

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Re: TJH Portfolio adjustment

#659217

Postby kempiejon » Yesterday, 10:29 pm

It's always interesting to see the TJH updates, we share many holdings. Of course SMDS could be adjusted when the Mondi / International paper wranglings conclude. Mondi yields about 4% so a fairly neutral impact to a HYPer for a combination of those 2. I hold both so a combination would skew my weightings at company level if not sector. We can see recent strengths in SMDS as an advantage for sellers. Probably not me.

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Re: TJH Portfolio adjustment

#659246

Postby moorfield » Yesterday, 11:51 pm

kempiejon wrote:It's always interesting to see the TJH updates, we share many holdings. Of course SMDS could be adjusted when the Mondi / International paper wranglings conclude. Mondi yields about 4% so a fairly neutral impact to a HYPer for a combination of those 2. I hold both so a combination would skew my weightings at company level if not sector. We can see recent strengths in SMDS as an advantage for sellers. Probably not me.



What would be interesting and instructive to see I think would be the "delta" %age increase in TJH's (forecast) overall income each time such trimmings are done, in this case SMDS into PHP, RKT and WDS. Shouldn't be difficult compute to assuming same dividends as last year are paid next year, until announced otherwise. Not to mention the transaction costs incurred which (at AJ Bell rates) would be at least £40 - TJH does not normally discuss these. For the true HYPster that would be £0 or close to, of course! (I incurred 1.17% of income in custody, dealing and stamp last year, 23 buys 1 sell, which I feel is a more meaningful way to express these rather than as a %age of portfolio value.)

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Re: TJH Portfolio adjustment

#659288

Postby tjh290633 » Today, 10:19 am

moorfield wrote:
kempiejon wrote:It's always interesting to see the TJH updates, we share many holdings. Of course SMDS could be adjusted when the Mondi / International paper wranglings conclude. Mondi yields about 4% so a fairly neutral impact to a HYPer for a combination of those 2. I hold both so a combination would skew my weightings at company level if not sector. We can see recent strengths in SMDS as an advantage for sellers. Probably not me.



What would be interesting and instructive to see I think would be the "delta" %age increase in TJH's (forecast) overall income each time such trimmings are done, in this case SMDS into PHP, RKT and WDS. Shouldn't be difficult compute to assuming same dividends as last year are paid next year, until announced otherwise. Not to mention the transaction costs incurred which (at AJ Bell rates) would be at least £40 - TJH does not normally discuss these. For the true HYPster that would be £0 or close to, of course! (I incurred 1.17% of income in custody, dealing and stamp last year, 23 buys 1 sell, which I feel is a more meaningful way to express these rather than as a %age of portfolio value.)

The increase in income is something which I look at but do not calculate. In this case the transaction costs were £44 plus stamp duty on the three purchases, about £35 from memory. Usually the replacement shares are yielding more than the one sold. I did have one such transaction where the replacement shares promptly cancelled or reduced it's dividend.

Reckitt is a bit of a punt. The class action in the USA may lead to problems. Who knows? Meanwhile with the depressed price the yield becomes more acceptable, as long as the dividend is maintained.

I will try to remember to comment on relative yields in future.

TJH

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Re: TJH Portfolio adjustment

#659314

Postby tjh290633 » Today, 12:03 pm

I've now had a chance to look at the relative yields, this being the current table ranked by yoield:

Rank   EPIC     Yield 
1 VOD 11.47%
2 BATS 10.21%
3 IMB 8.50%
4 LGEN 8.21%
5 PHP 7.33% *
6 AV. 7.26%
7 BT.A 7.19%
8 TW. 7.12%
9 WDS 6.95% *
10 RIO 6.35%
11 IGG 6.17%
12 BLND 6.11%
13 NG. 5.50%
14 LLOY 5.41%
15 BHP 5.05%
16 KGF 4.97%
17 UU. 4.63%
18 RKT 4.58% *
19 SMDS 4.37% -
20 TSCO 4.28%
21 BP. 4.17%
22 ULVR 3.96%
23 ADM 3.86%
24 SSE 3.60%
25 GSK 3.53%
26 SHEL 3.48%
27 SGRO 3.24%
28 TATE 3.04%
29 DGE 2.92%
30 BA. 2.28%
31 PSON 2.26%
32 AZN 2.06%
33 HLN 1.86%
34 S32 1.66%
35 IMI 1.60%

Median 4.58%
Mean 5.00%

I have marked the four shares in question, and the three new shares have yields higher than that of SMDS (4.37%). Not by much in the case of RKT, but 3% more from PHP and about 2.5% in the case of WDS.

I will try to produce this information each time in future. I was wrong about the stamp duty, because I had forgotten that WDS does not attract it. It was about £25 in fact.

TJH


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