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daveh's HYPish Portfolio Review 2019

A helpful place to also put any annual reports etc, of your own portfolios
daveh
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daveh's HYPish Portfolio Review 2019

#275467

Postby daveh » January 6th, 2020, 10:29 am

This is an update of my HYP. Earlier updates were on the TMF boards (but may well have been lost with the board closures, there were links in 2016’s update). My update for 2016, 2017 and 2018 can be found here:

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Executive Summary

Performance in income terms was satisfactory with income increasing beyond inflation for all measures. Income rose by 9.29% for accumulation units and 2.82% for income units. In cash terms the income was up by 12%. Capital performance was also very good though that’s from last years lows. This year my XIRR for the year was +23.5% and there was an increase in unit value of +28.2% and +16.2% for accumulation an income units respectively.

Details and Commentary

Portfolio Constituents




Sector Breakdown


This year I did a lot more trading than usual. I added a fair bit of new money as well as reinvesting dividends and did a bit of Bed and ISAing. I have topped up BHP, PFC, VOD, RDSB, LLOY, RBS, DC. and BP. I top sliced SEGRO again as it was making up too high a percentage of my income and capital I bed and ISA’d VVAL (this is a Vanguard’s value factor ETF but is accumulating). I was using it as a place to store some cash before I moved it into my ISA last year so as not to breach the £2000 dividend tax limit. That was a mistake as, although it is an accumulating fund, being value orientated it receives significant dividends and these need to be reported as income. Fortunately, as long as I didn’t hold in a taxable account on 31st June 2019, no income needed to be reported. I decided to keep them as I think value may perform well in the next few years.

I bought three new holdings and gained one from the demerger of M&G Prudential. The purchases were: 1) TRIG a renewables infrastructure fund, it has a high yield and I think that renewables will be a good place to be invested in coming years. It does trade on a rather high premium, but I’ve tried to buy when it has had shares placings as the price tends to fall back at those times. 2) VWRL (Vanguards all world ETF). This is a difficult one, I wanted to invest more outside the UK, particularly in North America and went for VWRL, but its yield is not particularly high. The alternative was VHYL the high yield equivalent, but it is also not particularly high yield and has a much worse historical performance (capital wise) than VWRL. We’ll see if my choice is correct over the next few years. 3) HFEL, this was continuing the theme of investing outside the UK. I already hold IAPD a high yield ETF for the Asia/Pacific region and this was an alternative high yield choice.



Performance
The portfolio was unitised from September 2003 and the details are shown below.

Capital Performance (dividends reinvested) Accumulation units and Income units



Income Performance


My portfolio contains EMDV, IDVY and IAPD all exchange traded funds and now HFEL an Investment Trust. These have been included to add extra diversification to high yielding companies in Emerging and non-UK Markets that I do not feel able to achieve by buying individual shares myself. I’ve also added TRIG, a high yield infrastructure fund investing in renewable energy assets, VVAL was added to hold some cash from a top slice prior to reinvesting in high yield in the next tax year but I decided to keep it as I think value may start doing well again over the next few years. I’ve also wanted to invest more in the USA and in this case added VWRL which, though an all-world ETF, is >50% invested in the USA. Not particularly high yield, but neither is the high yield equivalent (VHYL) or an ETF investing in US dividend shares (eg QDIV only yields 2.35% similar to VWRL) so I went for the extra diversity and better total return of VWRL.

Last year the yield on end of year value was 5.60% and on sum invested was 11.2%. This year the portfolio yield on the end of year capital value has dropped back to 4.80% due to the significant rise in the value of the portfolio combined with a larger than usual amount of new money added near the end of the year that has yet to start earning. The yield on original sum invested has fallen back to 10.63% mostly due to the extra cash added at the end of the year.

The overall return is up from 6.7% pa to 7.92% calculated with XIRR on excel since I started the HYP.

I’m still happy with the performance on the income front with the dividend per unit up by more than inflation for both income and accumulation units, also unlike last year when the capital performance was dire this years capital performance has been exceptional and was even better just before Christmas.

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