monabri wrote:I'm sure this question has been asked/answered before on TMF in days of old..... but what is a "HYP"?
![Embarrassed :oops:](./images/smilies/icon_redface.gif)
Obviously it is a High Yield Portfolio but is it not a form of a cut down FTSE100 tracker where all the low yields have been removed?
Good question, but it is not quite that simple. The ETF IUKD originally did that, but was indiscriminate. The result was that it was heavily into financial shares and took the 50 highest yielding shares willy nilly. A one-off HYP selecting 15 or more shares will not duplicate sectors, so will have only one bank, one pharmaceutical, one oil, and so on. Furthermore it weighted its constituents by yield, whereas a one-off HYP will initially be equal weighted.
I have the composition on 21 Mar 2007, as published by iShares:
Weight%
3.23 ELECTROCOMPONENTS PLC
2.84 UNITED UTILITIES PLC
2.66 LLOYDS TSB GROUP PLC
2.57 BRIT INSURANCE HOLDINGS PLC
2.56 DRAX GROUP PLC
2.52 TOMKINS PLC
2.42 PREMIER FARNELL PLC
2.31 JARDINE LLOYD THOMPSON GROUP
2.30 RENTOKIL INITIAL PLC
2.29 DSG INTERNATIONAL PLC
2.28 WOOLWORTHS GROUP PLC
2.26 PROVIDENT FINANCIAL PLC
2.23 ALLIANCE&LEICESTER PLC
2.21 BT GROUP PLC
2.18 VODAFONE GROUP PLC
2.12 KINGFISHER PLC
2.12 BRADFORD&BINGLEY PLC
2.09 CATLIN GROUP LTD
2.08 FKI PLC
2.00 SEVERN TRENT PLC
2.00 HSBC HOLDINGS PLC
2.00 BARCLAYS PLC
1.96 ROYAL BANK OF SCOTLAND GROUP
1.95 ROYAL DUTCH SHELL PLC-B SHS
1.93 MAPELEY LTD
1.93 DS SMITH PLC
1.92 TRINITY MIRROR PLC
1.91 SCOTTISH&NEWCASTLE PLC
1.90 TOPPS TILES PLC
1.90 BP PLC
1.89 HMV GROUP PLC
1.88 EMAP PLC
1.87 CARPETRIGHT PLC
1.83 NORTHUMBRIAN WATER GROUP PLC
1.82 CATTLES PLC
1.77 KESA ELECTRICALS PLC
1.76 SCOTTISH&SOUTHERN ENERGY
1.75 JJB SPORTS PLC
1.70 NATIONAL GRID PLC
1.67 GKN PLC
1.64 HALFORDS GROUP PLC
1.64 DAIRY CREST GROUP PLC
1.62 LEGAL&GENERAL GROUP PLC
1.61 PENNON GROUP PLC
1.54 HALMA PLC
1.54 COMPASS GROUP PLC
1.49 ROYAL&SUN ALLIANCE INS GRP
1.43 NORTHERN FOODS PLC
1.39 CENTRICA PLC
1.05 RANK GROUP PLC
Fairly obviously, looking at the list, it used the FTSE350 to pick its constituents. The FTSE devised a special index for it, the FTSE UK Dividend+ Index
It had 6-monthly reviews originally, but I believe that this changed to 3-monthly at some stage.
In that respect it was an index tracker, but not an index that the HYP ressembles in any way. There is also the FTSE350 Higher Yield index, which is again indiscriminate and varies daily in its make up.
The "Classic HYP" evolves gradually, and does not change as the market changes.
TJH