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SIPP for 2060+

Including Financial Independence and Retiring Early (FIRE)
ADrunkenMarcus
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Re: SIPP for 2060+

#174873

Postby ADrunkenMarcus » October 19th, 2018, 8:58 am

My Smithson allocation has arrived. It makes up about 13.7% of the portfolio's current value. Let's hope it performs!

Best wishes

Mark.

ADrunkenMarcus
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Re: SIPP for 2060+

#178039

Postby ADrunkenMarcus » November 4th, 2018, 10:56 am

OK, so to summarise the portfolio changes this tax year:

Sold out of Patisserie Holdings in August 2018 at 416p. The proceeds went into Fevertree.

Trimmed Standard Life UK Smaller Companies, Aberdeen Asian Smaller Companies and Temple Bar and purchased a big chunk of Smithson at IPO. Then topped up Smithson further, by trimming Murray International and a tiny bit of DP Poland.

I don't like to trade so much but I'd have bought into Fundsmith if it had been a closed-ended (investment trust) fund and so Smithson was a bit too much to resist.

Best wishes

Mark.

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Re: SIPP for 2060+

#213243

Postby ADrunkenMarcus » April 6th, 2019, 10:46 pm

My annual review for 2018-19.

TRADES

As above:
Sold out of Patisserie Holdings in August 2018 at 416p. The proceeds went into Fevertree. (Phew!)

Trimmed Standard Life UK Smaller Companies, Aberdeen Asian Smaller Companies (now Aberdeen Asia Focus) and Temple Bar and purchased a big chunk of Smithson at IPO. Then topped up Smithson further, by trimming Murray International and DP Poland. After DP Poland fell sharply early in 2019, I had enough accumulated dividends to buy back more shares than I sold at about a third of the price.

CURRENT HOLDINGS



Spirax Sarco Engineering was bought in 2015 with no changes to the holding, but it has grown strongly and continued to increase as a proportion of the portfolio. Kainos was bought in 2017 with no changes but it, too, has grown substantially. DP Poland’s recent decline has solved the problem of being overly concentrated in one share.

TOTAL RETURN - INDEX

On a total return basis, the portfolio fell 10.5% this year which compares to rises of between 2.6% and 8% for my chosen benchmark total return indexes. After being strongly ahead of all of them up until April 2018, it’s now just behind the FTSE All World but remains ahead of the others.



How did individual holdings fare during the year? Total returns as follows:



Smithson was only launched in October 2018 but has returned about 18%.

The direct shareholdings generally have high returns on capital employed and high operating margins. I also included Smithson’s data, which is calculated slightly differently but perhaps serves as a guide to trends.





Summary of Individual Shares' Performance (up to early 2019 peaks):




RUNNING COSTS

Trading costs increased due to the unusual amount of trading during the year. Smithson also has higher estimated charges than some of the holdings which were sold to go into it, while direct share holdings with no ongoing charge form a smaller proportion of the portfolio:

Annual cost estimate (ex. dealing) rose from 1.24 to 1.35% and annual cost estimate (inc. dealing) rose from 1.25 to 1.51%.

Best wishes

Mark.

ADrunkenMarcus
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Re: SIPP for 2060+

#297693

Postby ADrunkenMarcus » April 4th, 2020, 12:59 pm

My annual review for 2019-20. 5 April 2020 is a Sunday so the valuations are at the close on Friday 3 April 2020.

TRADES
Sold Murray International and bought Smithson July 2019 due to its superior growth prospects; cash dividends topped up DP Poland slightly; sold Fevertree at a much higher price than today in November 2019 and put proceeds into Smithson; halved Kainos and put proceeds into Smithson; topped up more DP Poland again in January 2020.

CURRENT HOLDINGS



Smithson has been deliberately increased to a very substantial proportion of the portfolio and forms an enormous core. Kainos still makes up a reasonable proportion despite being halved, due to strong growth. Temple Bar has performed dreadfully and fallen to 2.4 per cent of the portfolio.

TOTAL RETURN - INDEX

The portfolio is ahead of all its benchmark indexes, rising 26.2% since 5 April 2014 compared to 21.95% for the FTSE All World TR ($) and tiny increases from the other FTSE indexes.

In the last year, the portfolio returned minus 11.1%, followed by minus 14.5% for the FTSE All World, minus 24.2% for FTSE 100, minus 25.7% for FTSE 250 and minus 24.3% for FTSE All Share.



How did individual holdings fare during the year? Total returns (from 3 April 2019 to 3 April 2020) as follows:



Kainos was up in triple digits at one point and, although it's fallen as with the rest of the market, it made a positive return for the year as did the dependable Spirax Sarco. Since 2017, Kainos has been hiking its dividend at a 25% CAGR.

Temple Bar was a small proportion of the portfolio but fell so sharply that, without it, the entire portfolio's total return would likely have been kept in the single digits - less than minus 10% rather than minus 11.1%. Rotork always gets hit with the oil price as the shares are correlated quite strongly. Aberdeen Standard Asia Focus is somewhat disappointing. It has a great long term record back to 1995 but less so since purchase in 2012.

RUNNING COSTS

Again, there was a fair bit of trading this year - must learn to desist. However, that'll be easier to do with so much of the portfolio in Smithson. Annual costs (ex. dealing) fell from 1.35% to 1.02% and annual costs (inc dealing) fell from 1.51% to 1.29%. The annual broker charge has reduced compared to the previous provider, as the SIPP was transferred during the year.

All told, I'm quite happy and don't feel a negative return of 11.1% is too bad for an all equity portfolio.

Best wishes

Mark.

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Re: SIPP for 2060+

#297751

Postby monabri » April 4th, 2020, 3:22 pm

Let's make a date to review this in 2061...and you can send me a card for my 100th birthday!

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Re: SIPP for 2060+

#297780

Postby flyer61 » April 4th, 2020, 4:23 pm

LOL I would be 100 in 2061...not expecting to be there though.

ADrunkenMarcus
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Re: SIPP for 2060+

#297795

Postby ADrunkenMarcus » April 4th, 2020, 5:06 pm

You guys are a fair bit older than me!

Best wishes

Mark

ADrunkenMarcus
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Re: SIPP for 2060+

#339316

Postby ADrunkenMarcus » September 9th, 2020, 8:54 pm

Shares in DP Poland are currently suspended so we'll have to see what happens there and if they're bought out for cash.

I have a very large Rotork holding in my dividend growth portfolio and this month sold my much smaller Rotork holding in the SIPP, tidying the portfolio a bit by topping up Smithson.

Best wishes

Mark.

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Re: SIPP for 2060+

#398802

Postby ADrunkenMarcus » March 25th, 2021, 8:19 am

I forgot to report in January that I sold out of Aberdeen Standard Asia Focus (formerly Aberdeen Asian Smaller Companies) and bought Evolution Gaming with the proceeds (listed in Sweden). In a fluke of luck, I'm pleased Evolution is currently up about 50%.

It looks like the FTSE All World TR ($) index has been on an absolute tear - when I checked the figure last night it was up about 71% since 5 April 2020. Although my SIPP has done well in absolute terms, it's likely to lag this index by some way!

Best wishes

Mark

ADrunkenMarcus
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Re: SIPP for 2060+

#401191

Postby ADrunkenMarcus » April 2nd, 2021, 6:43 pm

My annual review for 2020-21. 5 April is a Bank Holiday so the valuations are at the close of Friday 2 April 2021.

TRADES
Summarised above.

CURRENT HOLDINGS



TOTAL RETURN – INDEX

The portfolio is ahead of all its benchmark indexes, rising 96% since 5 April 2014 compared to 94.3% for the FTSE All World TR ($) and increases for the FTSE indexes of between 31.9% for the FTSE 100 and 58.8% for the FTSE 250.

However, it has lagged in the last year with a total return of 55.4%, behind the FTSE All World TR ($) at 59.3% and FTSE 250 at 56.9%. The FTSE All Share at 34.1% and FTSE 100 at 28.5% were the worst.




How did individual holdings fare during the year? MorningStar (oddly enough I ran it today but the ‘performance date’ is given as 28 February 2021) indicates:
Evolution Gaming returned 289.61% (I only bought in mid January 2021)
Kainos Group returned 128.74%
Spirax-Sarco Engineering returned 40.99%
Smithson returned 38.42%
DP Poland returned 23.08%
Standard Life UK Smaller Companies returned 14.29%
Temple Bar returned -11.4%

Holdings from purchase to date (my own data so I have more confidence in it!):



Naturally Kainos has been outstanding with a 58% CAGR (share price only) over almost four years now and accompanied by a 27% CAGR in dividends per share (I expect this to increase significantly with the forecast increases for 2021). My idiotic decision to sell half my Kainos (realising a gain in excess of the entire original investment cost) and try to lock that gain in by 'diversifying' into Smithson is one I greatly regret! Without doing that, I reckon my accumulation unit price would be £2 rather than £1.96. The issue with Kainos is it always looks expensive but then keeps smashing expectations. Perhaps one day it won't...

Standard Life UK Smaller Companies has returned 11.6% CAGR (share price only) since 2011 and that broadly matches the 12.1% CAGR in dividends per share.

I would like DP Poland to improve and I think their plans for the coming years are promising.

Evolution Gaming has already increased 44.1% in a few months (it would be over 50% with constant currency).

Temple Bar has barely matched inflation with a 3.2% CAGR (share price only), however with dividends included the annual CAGR is more like 5.6%. Not good and I don’t know why I keep it! Perhaps it’ll ‘come good’ by December 2021. Or NOT.

RUNNING COSTS

Annual costs (ex. dealing) fell from 1.02% to 0.86% and annual costs (inc dealing) fell from 1.29% to 1.05%.


This is all a lot of effort/fun and shows how hard it is to 'beat the indexes'. If you adjust for risk I expect I'm doing worse. Still, I'm not lagging them in percentage gain terms, so there's not a cost.

Best wishes

Mark.

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Re: SIPP for 2060+

#401243

Postby doug2500 » April 2nd, 2021, 9:28 pm

Great review Mark.

I've been working on my own and I notice that while we agree on the all share being up 34% you quote FTSE all world TR at 59% but I use VWRL which is Vanguard FTSE all world ETF and I make it 41.5%

I wouldn't expect these to be so different, do you think one of us is wrong?

Your performance is strong, I 'only' managed 46% increase in unit value. Sounds great but it was a low starting point. However my unit values are at an ATH so all good.

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Re: SIPP for 2060+

#401260

Postby ADrunkenMarcus » April 2nd, 2021, 10:20 pm

Thanks Doug2500.

doug2500 wrote:I've been working on my own and I notice that while we agree on the all share being up 34% you quote FTSE all world TR at 59% but I use VWRL which is Vanguard FTSE all world ETF and I make it 41.5%

I wouldn't expect these to be so different, do you think one of us is wrong?


Hmmm...

I took the data for the FTSE All World TR ($) from the Financial Times indexes. There's a 'FTSE GLOBAL EQUITY INDEX SERIES' with a Total Return column. I noted down 457.1 for last year (3 April 2020 since 5 April 2020 was a Sunday) and then 728.2 for today (since 5 April 2020 is a Bank Holiday). However, on refreshing it I see that figure was for 31 March and it's been updated for 1 April now at 736 - I may need to see if there's a 2 April update and amend my figures!!!!

I do have all the index data recorded. It's simply I rebase them all to 1 as at 5 April 2014 for the portfolio vs. indexes comparison tables I do.

I always believed this FTSE All World TR index was computed in Dollars. If so, then the Pound has strengthened pretty substantially over the year - if your Vanguard FTSE All World ETF is quoted in Pounds then I'd expect the return to be less, because they are being converted back into a stronger currency which will 'buy' fewer Pounds? (I bought some USA shares in my dividend growth portfolio back in April 2020, including PayPal - at one point it was up 117% in constant currency terms but the rising Pound wiped out a significant amount and took the return to c. 95%.)

I don't know if anyone else has any data that could shed some light?

Best wishes


Mark.

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Re: SIPP for 2060+

#401476

Postby 1nvest » April 3rd, 2021, 7:56 pm

ADrunkenMarcus wrote:Thanks Doug2500.

doug2500 wrote:I've been working on my own and I notice that while we agree on the all share being up 34% you quote FTSE all world TR at 59% but I use VWRL which is Vanguard FTSE all world ETF and I make it 41.5%

I wouldn't expect these to be so different, do you think one of us is wrong?

.
.
I don't know if anyone else has any data that could shed some light?

My recent records indicates for VWRL ...

45.1% one year total return in £ including dividends
£81.1 recent price (Saturday 3rd April)
£1.13 divs in last 12 months, so 1.4% dividend yield
61.78% total return in US$ (including dividends)
£ $ changed from 1.23 to 1.38 over the period.
Some discrepancy is evident, 1.451 £ based gain factor x 1.38 / 1.23 FX change = 62.7% suggested US$ based total return gain. I suspect because at the start date the £ and stock prices were volatile (Covid) and adjusting my figure of 1.23 £/$ in April 2020 to 1.238 for instance would close that gap/difference.

ADrunkenMarcus
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Re: SIPP for 2060+

#401498

Postby ADrunkenMarcus » April 3rd, 2021, 9:15 pm

1nvest wrote:Some discrepancy is evident, 1.451 £ based gain factor x 1.38 / 1.23 FX change = 62.7% suggested US$ based total return gain. I suspect because at the start date the £ and stock prices were volatile (Covid) and adjusting my figure of 1.23 £/$ in April 2020 to 1.238 for instance would close that gap/difference.


Many thanks 1nvest, much appreciated!

Best wishes


Mark.

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Re: SIPP for 2060+

#401656

Postby doug2500 » April 4th, 2021, 4:03 pm

Thanks both for the discussion.

How did I miss VWRL being an income ETF? That means as pointed out I'm underscoring it. That won't do at all.

For me I'd rather stick to something quoted in £££ so FTSE all world TR is out. Any ideas for an all world TR priced in ££ I can use as a benchmark?

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Re: SIPP for 2060+

#401662

Postby swill453 » April 4th, 2021, 4:19 pm

doug2500 wrote:Thanks both for the discussion.

How did I miss VWRL being an income ETF? That means as pointed out I'm underscoring it. That won't do at all.

For me I'd rather stick to something quoted in £££ so FTSE all world TR is out. Any ideas for an all world TR priced in ££ I can use as a benchmark?

VWRP is the accumulation version of VWRL.

Scott.

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Re: SIPP for 2060+

#401672

Postby ADrunkenMarcus » April 4th, 2021, 4:45 pm

VWRP data doesn't seem to be available before July 2019, from what I saw after a very brief online search. This may cause issues, Doug2500, if you need to redo your figures from earlier years.

I wouldn't mind using the MSCI World TR myself but it's not listed in the Financial Times indexes.

Best wishes

Mark.

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Re: SIPP for 2060+

#401676

Postby doug2500 » April 4th, 2021, 5:19 pm

VWRP is priced in $$ so throws up that adjustment too. I'm not sure why Vanguard would price the inc etf in ££ but the acc in $$?

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Re: SIPP for 2060+

#401691

Postby ADrunkenMarcus » April 4th, 2021, 6:30 pm

doug2500 wrote:VWRP is priced in $$ so throws up that adjustment too. I'm not sure why Vanguard would price the inc etf in ££ but the acc in $$?


I don't know whether income has anything to do with it and they don't want UK investors to worry about currency conversions? (Ill-informed speculation on my part, I'm sure!)

If, in the long run, I expect the Pound to weaken against the Dollar (and the Dollar to weaken in general, particularly against Asian currencies) then a Dollar-denominated benchmark would be 'easier' to try and match. In the case of my dividend growth portfolio (review mid May as each review year runs 1 May to 30 April) I know that the strengthening Pound has done much to curb dividends and it's reduced the Sterling figures for the value of my foreign shares significantly. However, I guess currency fluctuations even out over time. Heck, what allowance could you make for Unilever (for example)?

Best wishes


Mark.

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Re: SIPP for 2060+

#402096

Postby Bathonian » April 6th, 2021, 5:30 pm

As a yardstick, one could use SSAC. That is an iShares MSCI all country world accumulating ETF, quoted in pounds. It has data back to 2011.

The MSCI all country world index is the MSCI equivalent of FTSE all world. They track each other extremely closely, over last 12 months within 0.3% of each other.


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