M&M's portfolio review December 2020

[TheMotorcycleBoy]

Hi everyone,

I've just done the unitisation of Me and Mel's portfolio, and decided to share it along with a quick summary. Comments welcome. This is what we are currently holding, sorted by P/L:


The year started off on the very shortlived "Boris Bounce". Probably foolishly we attempted to make some hay from this idea, and entered new positions in Hollywood Bowl BOWL and Polypipe PLP. However as soon as January become February, to me the year seemed headed to be fairly tumultous, making our buys in January look less sane, so as it evolved we made many changes and took various "corrective" actions. This evolved initially, in February, selling out of all 5 of our commercial bond holdings, half of our Persimmon shares, since all these were still vaguely in credit then, and our ISA allowance severely down, and it looked as if some "buy in the dip" funds would be required.

As the pandemic and oil crash evolved, we gradually exited all of our positions in Shell RDSB, Lloyds LLOY, Advanced Medical Solutions AMS (never did much), Hollywood Bowl BOWL (a shortlived holding, purchased on the foolish "Boris Bounce" idea), AG Barr BAG (not sugarly enough or too sweet?), Trifast TRI (never did much), and finally out of another fairly shortlived one in the form of Compass Group CPG. We also sold off all of Renishaw RSW, since I believe it to be massively over priced (I'm probably wrong on that one, but hey..). We also topsliced Focusrite TUNE (the market seems currently in love...), and Games Workshop GAW.

We then attempted to top up anything remaining in the folio which was still paying divs (a moving target, at the time), and slowly changed the focus of the portfolio (well at least tried to) to something less correlated to the UK, less HYPish, more focused on growth, less on income, more globally exposured, and (slightly) more future looking. So the following additions to our holdings were made, this is in approximate order:

JPM China JCGI (exposure to Chinese Growth), Visa V (seem to keep growing + global reach), National Grid NG. (not very global but some US exposure, a big energy distributor), UC94 (An ETF tracking Swiss firms Nestle, Roche, Novartis), Polymetal internal POLY (Gold exposure), Ceres Power CWR (fuel cell firm, my gamble in the hydrogen economy), Johnson and Johnson (US + global healthcare brands, some pharma investments), Alphabet GOOG (Quality IT assets, and a hand in future tech bets, AI, QuantCompute etc), RoboGroup ETF ROBG (tracks various robotic and AI firms), Burberry BRBY (fashion firm with more global reach than Next NXT, and possibility of short term upside).

Also ran: my bets in work from home (Cisco CSCO), i.e. strong investment in networking infrastructure, is looking limp. Possibly more so currently due to weak dollar. Currently ruminating on this one. Also wondering whether to sell (possibly marginally in credit) our remaining Persimmon PSN shares, i.e. quit when ahead. They don't sit too well, with our changed global and forward looking outlook. Similar views on Polypipe PLP, but they may well "do a Marshalls PLC MSLH", and grow if the government throws some £££ at infrastructure.

The Santa/Brexit deal rally seems to have been kind of us, and we've escaped the year with a stonking 2% rise in our accumulation unit price to 1.24p (Dec 2019 1.22p). This is our unit price tracked monthly from the beginning of January 2019:



Perhaps markets will fall slightly in Jan 2021 and bring new opportunities. Hopefully the new variant of covid will still be neutralised by the vaccine rollout, and next year will be better, but of course, who knows?

Matt

[simoan]

Well done, Matt & Mel. That's a very decent result for such a turbulent year. Most important of all, you held your nerve back in March. I'm not counting any chickens but I'm only up 4.3% YTD. Not too bad considering I've been 25-30% cash all year I spose. I need to analyse in a bit more detail at the end of the year what I did right, and more importantly, what I got wrong. Selling out of GAW at £88 was not one of my better decisions!

All the best, Si

[Newroad]

Hi Matt et al.

Good to hear the 4th quarter treated you well!

I don't keep as accurate records as you - I prefer, for simplicity, to measure the target portfolio balances I aim at, once per month - they are probably +/- 1% or so from the actual behaviour. Also, I've done some portfolio adjustment (active -> passive and slightly upping the equity component) through the year, though like for like, e.g. Global Equity Investment Trust into Global Equity ETF (and similar for bonds, though they were non investment grade into investment grade, so not quite the same). Also, I use II's free monthly (dividend) reinvestment each month to do a partial re-balance. Finally, I don't add in dividends (though I know approximately what they are, so can add them in after the fact as I have below).

All now and then figures are with 01/06/2019 as 0.0% and the start date (as VAGP first appeared in the UK late May 2019). The target portfolios have performed approximately as follows

ISAs: 6.25%, made up of 6.10% (now) - 2.50% (01/01/2020) + 2.65% (yield), (WTAN 33.3%, VWRL 33.3%, HDIV 16.7%, VAGP 16.7%)
SIPPs: 8.93%, made up of 9.13% (now) - 2.84% (01/01/2020) + 2.64% (yield), (ATST 33.3%, VWRL 33.3%, IPE 16.7%, VAGP 16.7%)
JISAs: 7.95%, made up of 9.34% (now) - 3.60% (01/01/2020) + 2.21% (yield), (FCIT 37.5%, VWRL 37.5%, CMHY 12.5%, VAGP 12.5%)

though like I said, there would have been some tracking error for the reasons listed. I would guess the tracking error would have caused a slight overstatement of the performance above, i.e. in reality, I would expect each to be maybe 1-2% lower than indicated this year.

Regards, Newroad

[TheMotorcycleBoy]

Well done, Matt & Mel. That's a very decent result for such a turbulent year. Most important of all, you held your nerve back in March. I'm not counting any chickens but I'm only up 4.3% YTD. Not too bad considering I've been 25-30% cash all year I spose. I need to analyse in a bit more detail at the end of the year what I did right, and more importantly, what I got wrong. Selling out of GAW at £88 was not one of my better decisions!

All the best, Si

Well, thanks to you for your help (a couple of years back - I think) convincing me that "sometimes you have to sell out of something".

And to Salvor Hardin and others for helping me realise that I needed to look abroad as well as at home.

And to monabri for mentioning the words "JP Morgan China Growth and Income". I just wish I'd bought more!

And to all the others who have tolerated my haughtiness at times, but continued to share views and ideas with.

M&M

[PrefInvestor]

Hi Matt, Well done for your portfolio performance, you've done significantly better than I have. I'm still down about 11.5% sadly, but then it was close to 50% at one point so that's something I suppose. With vaccines and brexit and US stimulus Im hoping for a better 2021 and to get back to a plus score ASAP.

Yes JCGI has been great so far as I am holding both that and JAGI. But sadly two of its major holdings (Baba & Tencent) have taken a big hit these last few days. BABA down 13% one day and another ~8% today in HK, JCGI with a close to 10% holding is going to feel that and in fact already has. Buying opportunity maybe.......?. Hmmmm. Good luck with that.

ATB

Pref

[PrefInvestor]

Hi Again Matt, Well false alarm it would seem with BABA ADR and Tencent up strongly today, along with pretty much all of JCGIs holdings. I confess I thought that the Chinese anti trust issue looked like it might be a big problem, not sure if it’s all over yet TBH but nice to see the 5-6% gains in those stocks this morning.

ATB

Pref

[TheMotorcycleBoy]

Hi Matt, Well done for your portfolio performance, you've done significantly better than I have. I'm still down about 11.5% sadly, but then it was close to 50% at one point so that's something I suppose. With vaccines and brexit and US stimulus Im hoping for a better 2021 and to get back to a plus score ASAP.

Yes JCGI has been great so far as I am holding both that and JAGI. But sadly two of its major holdings (Baba & Tencent) have taken a big hit these last few days. BABA down 13% one day and another ~8% today in HK, JCGI with a close to 10% holding is going to feel that and in fact already has. Buying opportunity maybe.......?. Hmmmm. Good luck with that.

ATB

Pref

Thanks for your words Pref,

Yes the pandemic and the oil shock, gave me cause to rethink what kind of shares I want to be in. I also quite like the Bear market scenario since it seems to offer one an opportunity to pick up stocks at a relative discount to what one could perceive as being their "future value". Of course this particular Bear has been reasonably short. Though of course you guys will have more experience of earlier Bears of longer duration, which I imagine required a lot of "stamina" so to speak. Also, I felt (some of you may disagree!), that this particular Bear was very different in that the Fed quite clearly did not want it to happen, (not sure whether it was just the Feds direction, or whether Trump and Mnuchin leant heavily on the FR) thus pumped the markets back up, and as well as sending cheques to individuals (who may have invested some of the cheques) they (the Fed) also bought various assets, probably equities in addition to TBs and corp bonds. And the rest of us followed suit.

TBH I was never particularly fearful under falling prices, my biggest problem was exceeding me and Mel ISA allowances (since I won't do borrowing or open a regular trading account, and had yet opened a SIPP) and hence running out of cash (I try to cost average across the months). The other issue is that silly cognitive flaw many here suffer from, which forces us to procrastinate upon buying "for fear that the prices will keep falling" and we'll miss out on an even better margin.

As you say, lets hope 2021 is better. I'm sure it will be different.

Matt

[Newroad]

Hi again Matt et al.

I've tidied up some data - Investing.com is a good site for historic data - and we've had a few extra days to the end of the year. In context, what I previously stated as an approximation was this

ISAs: 6.25%, made up of 6.10% (now) - 2.50% (01/01/2020) + 2.65% (yield), (WTAN 33.3%, VWRL 33.3%, HDIV 16.7%, VAGP 16.7%)
SIPPs: 8.93%, made up of 9.13% (now) - 2.84% (01/01/2020) + 2.64% (yield), (ATST 33.3%, VWRL 33.3%, IPE 16.7%, VAGP 16.7%)
JISAs: 7.95%, made up of 9.34% (now) - 3.60% (01/01/2020) + 2.21% (yield), (FCIT 37.5%, VWRL 37.5%, CMHY 12.5%, VAGP 12.5%)

I believe it is now closer to this

ISAs: 5.91%, made up of 8.14% (now) - 4.44% (01/01/2020) + 2.21% (yield), (WTAN 33.3%, VWRL 33.3%, HDIV 16.7%, VAGP 16.7%)
SIPPs: 9.24%, made up of 10.86% (now) - 3.87% (01/01/2020) + 2.25% (yield), (ATST 33.3%, VWRL 33.3%, IPE 16.7%, VAGP 16.7%)
JISAs: 7.01%, made up of 10.65% (now) - 5.46% (01/01/2020) + 1.82% (yield), (FCIT 37.5%, VWRL 37.5%, CMHY 12.5%, VAGP 12.5%)

The changes are (1) end of Dec 2020 data now, and (2) end of Dec 2019 (rather than Jan 2020, so truly year to year) data used for the subtraction and (3) updated end of year yields.

My guess is that the figures are probably overstated by around 1% for the reasons previously given. I had indicated 1-2%, but mitigating that slightly, yields were likely to have been slightly higher in context during the year just gone than reported now.

Regards, Newroad

[TheMotorcycleBoy]

Hi again Matt et al.

I've tidied up some data - Investing.com is a good site for historic data - and we've had a few extra days to the end of the year. In context, what I previously stated as an approximation was this

ISAs: 6.25%, made up of 6.10% (now) - 2.50% (01/01/2020) + 2.65% (yield), (WTAN 33.3%, VWRL 33.3%, HDIV 16.7%, VAGP 16.7%)
SIPPs: 8.93%, made up of 9.13% (now) - 2.84% (01/01/2020) + 2.64% (yield), (ATST 33.3%, VWRL 33.3%, IPE 16.7%, VAGP 16.7%)
JISAs: 7.95%, made up of 9.34% (now) - 3.60% (01/01/2020) + 2.21% (yield), (FCIT 37.5%, VWRL 37.5%, CMHY 12.5%, VAGP 12.5%)

I believe it is now closer to this

ISAs: 5.91%, made up of 8.14% (now) - 4.44% (01/01/2020) + 2.21% (yield), (WTAN 33.3%, VWRL 33.3%, HDIV 16.7%, VAGP 16.7%)
SIPPs: 9.24%, made up of 10.86% (now) - 3.87% (01/01/2020) + 2.25% (yield), (ATST 33.3%, VWRL 33.3%, IPE 16.7%, VAGP 16.7%)
JISAs: 7.01%, made up of 10.65% (now) - 5.46% (01/01/2020) + 1.82% (yield), (FCIT 37.5%, VWRL 37.5%, CMHY 12.5%, VAGP 12.5%)

The changes are (1) end of Dec 2020 data now, and (2) end of Dec 2019 (rather than Jan 2020, so truly year to year) data used for the subtraction and (3) updated end of year yields.

My guess is that the figures are probably overstated by around 1% for the reasons previously given. I had indicated 1-2%, but mitigating that slightly, yields were likely to have been slightly higher in context during the year just gone than reported now.

Regards, Newroad

After suggestions from several on TLF I started unitising our folis from December 2018.

I only do accumulation units and reset to market values once a month. Once I'd figured out a simple spreadsheet (I have one page per year) it's very easy and quick to do.

It seems to be the most accurate way to track performance and combines the impacts of divs, fees, losses, gains, profit-taking with minimal effort.

Matt

[Newroad]

Hi Matt.

I suppose it depends on the primary, secondary, tertiary etc means for one's monitoring, recording etc. If it is to monitor performance as primary, then perhaps unitising makes sense - happy to take a look at the original thread(s) if you are able to easily provide links?

For me, primary is to know how to invest (some new funds, some dividend reinvestment) and if needed, re-balance, each month. As mentioned before, I ensure I am steering approximately "North" in this respect by monitoring the X-Ray's determination of sub-portfolio equity/stock percentage).

Performance is a secondary or tertiary consideration, which I hope will look after itself over the long haul - as I have low number of broad holdings (four per sub-portfolio, two of which are common between all) - and in general, I don't propose to change often. If I do, it's likely to be wholesale (one in, one out). Hence the slightly "lazy" approach to determining performance.

Regards, Newroad