MDS1951 HYP-ISH Portfolio Review 2021

[MDS1951]

First, I hope we have all been successful in avoiding covid-19. I am back in harness at the care home where I am a volunteer. The care home continues to be a covid-free zone, for which I am very grateful indeed.

Here's how my HYP progressed during 2021. I made no purchases with new money and withdrew £3,500 from dividend income. First, a table.



The value of my portfolio increased by £13.2k, an increase of slightly more than 14% and IIRC more or less mirrors the increase in the FTSE 100.

Dividend income increased by 6.5%. I'm happy with that.

I had a quiet year re purchases and disposals. The only transactions were two purchases (January and July) of Law Debenture shares totalling £3.3k, funded by selling my shares in TUI in January because I couldn't see them heading anywhere except South and using the return of capital from Pennon in July when they gave shareholders some of the Viridor spoils.

The components of my portfolio are set out below; I wouldn't buy some of them today because the yields are too low, either because of dividend cuts or capital appreciation. However, at the time of purchase the yield of each holding was either close to or above the FTSE100 average.

AstraZeneca
Aviva
Billiton
BP
British Land
Compass
Diageo
Glaxo
Legal & General
National Grid
Pennon
Relx
Royal Dutch Shell
RTZ
Sainsbury
Tate
Unilever
United Utilities
Vodafone
Wood Group

City of London IT
Law Debenture
Merchants IT
Murray Income IT
Murray International IT
Schroder Income and Capital IT
Temple Bar IT

The ITs accounted for 27.4% of my portfolio (excluding cash) by value and the shares 72.6%. I decided at the end of 2018 that I was fed up with taking decisions over share purchases and that I would farm the decision-making out to IT managers.

The IRR for the portfolio increased from 6.3% to 7.1%.

Some time ago I unitised the portfolio on an accumulation basis and in 2021 the dividend income increased by 10.2% on a unit basis. The price per unit increased as well and now is £25.07.

I think my experience with my portfolio for 2021 shows again the value of having a diversified portfolio in that my eggs are not all in one basket; if I had chosen a different strategy of betting on 2 or 3 shares that I hoped would zoom away in terms of their capital value I'd be awake all night wondering if I'd chosen the right shares. With this strategy I'm confident that my dividend income will not suffer a catastrophic reduction because I think most of the companies are big enough and run competently enough to carry on churning out profits, or recover if they have to reduce or cancel their dividends. I'll never become as rich as Croesus with the HYP strategy, but it makes retirement somewhat more comfortable than keeping the cash in a building society would do.

Here's the link to last year's report.

viewtopic.php?f=56&t=27110

I have a small IT portfolio and I have posted about its performance in 2021 - here's the link if anybody is interested.

viewtopic.php?f=56&t=32727

Finally, I wish everybody a Happy, Safe and Prosperous New Year - and good luck to us all with our investments and our continued avoidance of covid-19.

MDS1951