IDP's HYP as of 20 May 21.

[Arborbridge]

Not surprisingly, using a very broad brush approach I am currently no more than about 10% up on this time last year. That does not mean a lot because of timing obviously. I was not so badly affected as some by dividend cancellations, HSBC being the main one. Shell and Imperial reductions made a bigger impact. I doubt if I will see a full reinstatement of the 2019 total this year.

Dod

I doubt if I will see a full reinstatement of the 2019 total this year.
I'd agree with that, Dod. My current forecast for the next twelve months for receivable HYP income (NB not "income per unit") is around 10% less than the income received in 2019, so by the end of 2021 I doubt I will have caught up with 2019. However, that could be considered a good outcome after a major setback.
As regards other sources of income, IT income will be higher than 2019, probably, and an increase in State pension will help even though tiny.

Overall, we seem to be surviving.

Arb.

[moorfield]

The point of such metrics being to help us understand the success or otherwise of past actions. The danger of using an inappropriate metric is that it can reinforce bad choices and convince us they were good ones.

The only metric that matters and is appropriate, surely, is overall portfolio income and yield.

And if you are measuring that against a target - what you "want" or "need" - and beating it, and overall yield is exceeding the FTSE100 (or in my case, CTY) then your past actions have been successful, I would argue.

That approach can suit both the tinkerers and Dorises here alike.

[kempiejon]

The only metric that matters and is appropriate, surely, is overall portfolio income and yield.

And yield doesn't necessarily matter if the overall income is enough. If I had a portfolio that gave a steady increase in income but the value had surged ahead I'd be at a lower yield than if the converse is true. New money I care about yield and if selling perhaps replacement yield comparisons might come into play but once bought I can ignore yield I think.

[moorfield]

The only metric that matters and is appropriate, surely, is overall portfolio income and yield.

And yield doesn't necessarily matter if the overall income is enough. If I had a portfolio that gave a steady increase in income but the value had surged ahead I'd be at a lower yield than if the converse is true. New money I care about yield and if selling perhaps replacement yield comparisons might come into play but once bought I can ignore yield I think.

Yes and no. My point on overall yield being if that is consistently less than that of an alternative (such as CTY, say), then why bother with a DIY LYP ? Or, what's wrong with a supposedly DIY HYP ?

[tjh290633]

The only metric that matters and is appropriate, surely, is overall portfolio income and yield.

And yield doesn't necessarily matter if the overall income is enough. If I had a portfolio that gave a steady increase in income but the value had surged ahead I'd be at a lower yield than if the converse is true. New money I care about yield and if selling perhaps replacement yield comparisons might come into play but once bought I can ignore yield I think.

Yes and no. My point on overall yield being if that is consistently less than that of an alternative (such as CTY, say), then why bother with a DIY LYP ? Or, what's wrong with a supposedly DIY HYP ?

It's that word "Consistently". The IT may maintain its dividend by using reserves, but by getting rid of the 12 lowest yields in my 36-share HYP, I could raise the yield to over 5%. One needs to look at the overall picture.

Here it is ranked by yield:

Yield                            
Rank    EPIC     Yield   Cum Mean
    1   IMB      8.29%      8.29%
    2   BATS     7.69%      7.99%
    3   RIO      6.81%      7.60%
    4   LGEN     6.27%      7.27%
    5   VOD      6.16%      7.05%
    6   GSK      5.90%      6.86%
    7   BHP      5.44%      6.65%
    8   ADM      5.33%      6.49%
    9   AV.      5.21%      6.35%
   10   SSE      5.21%      6.23%
   11   NG.      5.20%      6.14%
   12   IGG      4.97%      6.04%
   13   BP.      4.97%      5.96%
   14   TW.      4.87%      5.88%
   15   BA.      4.56%      5.79%
   16   BT.A     4.38%      5.70%
   17   UU.      4.31%      5.62%
   18   PHP      4.09%      5.54%
   19   TSCO     4.05%      5.46%
   20   RDSB     3.66%      5.37%
   21   TATE     3.64%      5.29%
   22   ULVR     3.49%      5.20%
   23   BLND     3.28%      5.12%
   24   SMDS     2.86%      5.03%
   25   RKT      2.69%      4.93%
   26   AZN      2.54%      4.84%
   27   PSON     2.33%      4.75%
   28   KGF      2.31%      4.66%
   29   SGRO     2.15%      4.57%
   30   DGE      2.09%      4.49%
   31   S32      1.68%      4.40%
   32   IMI      1.37%      4.31%
   33   LLOY     1.18%      4.21%
   34   MKS      0.00%      4.09%
   35   MARS     0.00%      3.97%
   36   CPG      0.00%      3.86%
                                 
        Median   4.07%           
        Mean     3.86%

That, of course, has BT.A's future yield incorporated. Some of the low yielders have dividends which are increasing, but only DGE to any extent at the moment. Why do I keep them? I expect better things to come, but if they don't it will be goodbye to them.

TJH

[torata]

As regards performance of my HYP, I’m pleased to state that thus far this year, my dividends received are 40% up on this time last year. The numerous cancelled dividends ur to COVID19 early last year obviously had a large effect on my dividend return for last year.

Ian.

That sounds very good. Does that 40% increase include dividends from additional shares bought with reinvested dividends? Or is it a true like-for-like increase of 40%?

That sounds very very good. Statements like this always raise a number of questions, as you have done - and there are potentially different timing issues too. "At this time" last year I had dividends from MAN group, SLA and BBOX, which haven't yet been paid (BBOX this year won't be paid until June).

Anyhow, taking those into account, my comparative for the year to this date is that in actual HYP dividends received I am 33% up.
However, due to re-investment that is a misleading figure. The better guide to progress might be the dividend per unit which neutralises re-investments. Here the figure is less favourable: the current dividend is up by 29% on last year to this date.
The increase does also vary according how "unlucky" one was with the cancellations last year; i.e. I could have a lower increase if my dividends suffered less with reductions last year.

Comparisons are always interesting but fraught with pitfalls

Arb.

For balance, my HYP income from first 4 months is actually about 10% down on the income received last year. But I have made some sales and purchases, so there may be an element of dividend drag.
Sorry, I don't compute the unitized amounts regularly, so it's a total amount figure.

But in fact, that's what I would have expected as, from memory, dividend cuts didn't start coming through until a few months into the pandemic.

torata

[Gengulphus]

But in fact, that's what I would have expected as, from memory, dividend cuts didn't start coming through until a few months into the pandemic.

Yes, the pandemic-induced dividend cuts / cancellations started at just about the start of April last year - so if you want a clean pre-Covid vs post-Covid comparison, comparing tax years will give much better results than comparing calendar years. That's not any sort of intrinsic advantage of using tax years, of course - it's just how the timing of this pandemic happens to have worked out. There's also little 'dividend drag' involved, as some of the cancellations occurred only days before the dividends had been due to be paid.

Gengulphus

[kempiejon]

The only metric that matters and is appropriate, surely, is overall portfolio income and yield.

And yield doesn't necessarily matter if the overall income is enough. If I had a portfolio that gave a steady increase in income but the value had surged ahead I'd be at a lower yield than if the converse is true. New money I care about yield and if selling perhaps replacement yield comparisons might come into play but once bought I can ignore yield I think.

Yes and no. My point on overall yield being if that is consistently less than that of an alternative (such as CTY, say), then why bother with a DIY LYP ? Or, what's wrong with a supposedly DIY HYP ?

I'm not sure about the and no bit of your reply. I agree the only metric that matters is overall portfolio income. If I only buy at above CTY yield and my yield is reduced by price appreciation or rises because of decreases I'm unconcerned provided the income keeps flowing and hopefully rises. Yield as I said is only relevant to me for further purchases.

[IanTHughes]

But in fact, that's what I would have expected as, from memory, dividend cuts didn't start coming through until a few months into the pandemic.

Yes, the pandemic-induced dividend cuts / cancellations started at just about the start of April last year - so if you want a clean pre-Covid vs post-Covid comparison, comparing tax years will give much better results than comparing calendar years. That's not any sort of intrinsic advantage of using tax years, of course - it's just how the timing of this pandemic happens to have worked out. There's also little 'dividend drag' involved, as some of the cancellations occurred only days before the dividends had been due to be paid.

The “virtual” Drawdown HYP set up by pyad and subsequently managed by myself as reported here: viewtopic.php?f=15&t=24237 does have its year-end at 05 April.

The year on year dividends, actual and forecast, currently looks like this:

     |                | Actual     | Actual     | Forecast 
EPIC | Sector         | 05-Apr-20  | 05-Apr-21  | 05-Apr-22
WPP  | Advertising    |   1,068.00 |     178.00 |    427.20
HSBA | Banks          |     573.99 |       0.00 |    416.56
IBST | Bricks         |     859.79 |       0.00 |     93.58
CCL  | Cruise Ships   |     610.18 |       0.00 |      0.00
SLA  | Fund Manager   |   1,188.63 |   1,188.63 |    803.42
IGG  | Gambling       |   1,193.17 |   1,193.17 |  1,193.17
AV   | Insurance      |   1,100.18 |     537.42 |    868.14
BHP  | Mining         |     944.08 |     964.49 |    927.53
VOD  | Mobile Tel     |     758.07 |     812.27 |    781.22
BP   | Oil            |     495.46 |     344.60 |    255.80
RDSB | Oil            |     445.12 |     152.04 |    152.12
SMDS | Packaging      |     698.22 |       0.00 |    517.20
GSK  | Pharma         |     536.37 |     752.80 |    752.80
LAND | Real Estate IT |     285.05 |     147.24 |    220.86
BLND | Real Estate IT |     301.87 |     106.93 |    213.86
ITV  | Television     |     932.15 |       0.00 |      0.00
IMB  | Tobacco        |   1,173.31 |     782.17 |    784.57
PNN  | Water          |     259.54 |     700.72 |    414.67
BA   | Weapons        |     687.71 |     705.97 |    721.18
GNK  | Brewing & Pubs |     552.90 |            |          
     |                |            |            |          
     | Total          | £14,663.79 |  £8,566.45 | £9,543.88
     | Change (£)     |            | -£6,097.34 |   £977.43
     | Change (%)     |            |    -41.58% |    11.41%

Who knows the future but at the moment I cannot see any particular issues with the forecasts made apart from perhaps being over-cautious with IBST. Maybe HSBA will also be more productive but, if so, not by much I would suggest.

The problem is not just the Covid-induced suspensions/cancellations, but also the "rebasing" of the dividends from IMB and both Oilies. A few other reductions also do not look like being reversed any time soon (AV, SLA & WPP).

So, the income forecast for this year three – ending on 05 April 2022 – should be an increase of 11.91% from that received during year two, but will still fall significantly short of that received during year one.


Ian

[Itsallaguess]

The “virtual” Drawdown HYP set up by pyad and subsequently managed by myself as reported here: https://www.lemonfool.co.uk/viewtopic.php?f=15&t=24237does have its year-end at 05 April.

The year on year dividends, actual and forecast, currently looks like this:

     |                | Actual     | Actual     | Forecast 
EPIC | Sector         | 05-Apr-20  | 05-Apr-21  | 05-Apr-22
     |                |            |            |          
     | Total          | £14,663.79 |  £8,566.45 | £9,543.88
     | Change (£)     |            | -£6,097.34 |   £977.43
     | Change (%)     |            |    -41.58% |    11.41%

Ouch...

Cheers,

Itsallaguess

[moorfield]

And yield doesn't necessarily matter if the overall income is enough. If I had a portfolio that gave a steady increase in income but the value had surged ahead I'd be at a lower yield than if the converse is true. New money I care about yield and if selling perhaps replacement yield comparisons might come into play but once bought I can ignore yield I think.

Yes and no. My point on overall yield being if that is consistently less than that of an alternative (such as CTY, say), then why bother with a DIY LYP ? Or, what's wrong with a supposedly DIY HYP ?

I'm not sure about the and no bit of your reply. I agree the only metric that matters is overall portfolio income. If I only buy at above CTY yield and my yield is reduced by price appreciation or rises because of decreases I'm unconcerned provided the income keeps flowing and hopefully rises. Yield as I said is only relevant to me for further purchases.

On Day 1 of any HYP's life its overall yield should be higher than the FTSE100, otherwise its owner has not met the HYP guidelines by selecting enough holdings that are. Now personally I continue to carry that view forward in time, regardless of how the weights and yields of individual holdings evolve. In your scenario where you may have ended up with several large lower yield holdings in your portfolio, yet are happy with the overall income, I would take as a signal to review and an opportunity to ratchet up that overall income even more (ie. selling and recycling those low yielders).

Circling back to Ian's decision to sell SLA. It may turn out be the right decision, but perhaps for the wrong reasons as so much of his trading seems to be, viz:
(i) selling a 32% cutter which was 4.1% of portfolio - what impact on overall income and yield by simply holding ?
(ii) selling based on "news" (strategic ignorance ?)
(iii) selling based on what others are doing and what seems unfashionable at the time

So I'm suggesting, somewhat left field perhaps, that any decision to sell is mandated by overall portfolio income and yield. Or put differently (and to Ian specifically), if your portfolio overall is delivering the income you want or need, then why tinker ?

[kempiejon]

... In your scenario where you may have ended up with several large lower yield holdings in your portfolio, yet are happy with the overall income, I would take as a signal to review and an opportunity to ratchet up that overall income even more (ie. selling and recycling those low yielders)....


Circling back to Ian's decision to sell SLA. It may turn out be the right decision, but perhaps for the wrong reasons as so much of his trading seems to be, viz:
(i) selling a 32% cutter which was 4.1% of portfolio - what impact on overall income and yield by simply holding ?
(ii) selling based on "news" (strategic ignorance ?)
(iii) selling based on what others are doing and what seems unfashionable at the time

So I'm suggesting, somewhat left field perhaps, that any decision to sell is mandated by overall portfolio income and yield. Or put differently (and to Ian specifically), if your portfolio overall is delivering the income you want or need, then why tinker ?

Gotcha, thanks for following up. I don't usually sell, in fact any of the options above wouldn't trigger any action from me - not quite a never sell HYPer as I do a bit of tax planning moving unsheltered holdings to an ISA and I ditch before takeovers rather than hold foreign instruments.

[IanTHughes]

The “virtual” Drawdown HYP set up by pyad and subsequently managed by myself as reported here: https://www.lemonfool.co.uk/viewtopic.php?f=15&t=24237does have its year-end at 05 April.

The year on year dividends, actual and forecast, currently looks like this:

     |                | Actual     | Actual     | Forecast 
EPIC | Sector         | 05-Apr-20  | 05-Apr-21  | 05-Apr-22
     |                |            |            |          
     | Total          | £14,663.79 |  £8,566.45 | £9,543.88
     | Change (£)     |            | -£6,097.34 |   £977.43
     | Change (%)     |            |    -41.58% |    11.41%

Ouch

Ouch is right!

Every time that dividends take a tumble as a result of Financial Crashes and the like, one looks to a quick recovery to repair the damage done to the annual income. Sometimes it is swift and HYP's income is soon soaring above some other possible sources, but in this case it looks like it will take some years!

In the case of the above portfolio, as well as the problems I have already mentioned there are two with 0.00% expectation this year. ITV Plc (ITV) might restart in time for this year-end, but more likely we will have to wait until next year. As for Carnival Corporation & plc (CCL), who knows when a Cruise Line will start making profits, let alone enough to pay a dividend!


Ian

p.s. Itsallaguess I have not forgotten your request for charts detailing the capital value over time of the Re-Invest version of this portfolio when compared with various ITs. I am still gathering evidence - particularly for any ITs that may have beaten the HYP in this respect. I will report soon but, after last night's debacle of reporting incorrect figures, I am now triple and even quadruple checking my figures before publishing


Ian

[idpickering]

With respect to all, I think this thread has drifted way off the topic of my opening post. Maybe someone can start another topic in which your discussion could continue, interesting though it is.

Ian.

[Wizard]

With respect to all, I think this thread has drifted way off the topic of my opening post. Maybe someone can start another topic in which your discussion could continue, interesting though it is.

Ian.

To come back to your HYP, were you about to check if the 40% dividend recovery is like-for-like or if it includes the dividends on additional shares bought with reinvested income? If the 40% is not like-for-like do you have that figure?

[csearle]

By the way, it was "Tale of two cities" rather than Ians.

Really? Oh I get it, Aberdeen and its twin Abrdn!

[Arborbridge]

With respect to all, I think this thread has drifted way off the topic of my opening post. Maybe someone can start another topic in which your discussion could continue, interesting though it is.

Ian.

To come back to your HYP, were you about to check if the 40% dividend recovery is like-for-like or if it includes the dividends on additional shares bought with reinvested income? If the 40% is not like-for-like do you have that figure?

I think he wrote that some of it was generated from extra investment. Not sure how much.

Arb.

[tjh290633]

I have just checked my income for the months of April-June for the current year and last year. This year is 56% above last year, solely due to dividend reinstatements and some reinvestment of dividends.

I have also checked the months of Jan-March for the current year and last year. That was 38% higher, mainly due to the Tesco special dividend. Taking that out of the equation, there is a fall of 21%. There were no cancelled dividends in that period of 2020, unlike 2021.

TJH

[idpickering]

With respect to all, I think this thread has drifted way off the topic of my opening post. Maybe someone can start another topic in which your discussion could continue, interesting though it is.

Ian.

To come back to your HYP, were you about to check if the 40% dividend recovery is like-for-like or if it includes the dividends on additional shares bought with reinvested income? If the 40% is not like-for-like do you have that figure?

I think he wrote that some of it was generated from extra investment. Not sure how much.

Arb.

Yes I did Arb, thanks. The 40% figure is due to the TSCO special, and new monies invested in my dividend payers, such as GSK which I topped up last October and again twice this year, as I mentioned on this board at those times.

Ian.

[idpickering]

I believe TRIG was mentioned earlier, and here's a link to TMF about three which have been mentioned:
https://www.fool.co.uk/investing/2021/0 ... es-id-buy/

Arb.

Thanks for posting this information Arb. I must admit that I do like the look of TRIG, and may well buy into it? It'd be handy to double up in the sector with it sitting alongside my UKW holdings. Hmm?

Ian.