Natural Yield Portfolio Review
Posted: March 10th, 2023, 2:13 pm
I've been devising a few different portfolios recently, including Total Return (TR) and Natural Yield (NY). The arguments about which approach is superior seem impossible to resolve without the benefit of hindsight, so I'm hedging my bets.
I am in the deaccumulation stage, but most of the funds have come from the sale of a business, not prior investments. I have an ISA and a SIPP with quite a few prefs and bank subordinated bonds as well as some single company shares and a mixture of other stuff, but I can't draw anything from the SIPP for another 7 years. I have no other employee pensions nor sources of income, apart from the state pension which I won't be entitled to for at least another 18-19 years.
My mortgage is paid off and I have no dependents. I have an underlying health condition, but what might happen with it is unclear, I could live normally for another 40+ years or drop dead within the next 5. The doctors don't know how that will play out. For that reason (amongst others) I'm not eager to boost my income with conventional paid employment. I require this portfolio to start paying its share of my living expenses in the next 12-24 months. I have a cash reserve, however, which will cover three times my current annual expenses, irrespective of what happens.
Below is my NY portfolio:
Equity: 75%
Debt: 5%
Other/alternative (green, REITs, infrastructure, commodities/mining, health): 20%
Equity (75%)
Lindsell Train Investment Trust (LTI)
JPMorgan Global Growth & Income PLC (JGGI)
Murray International Trust PLC (MYI)
Henderson International Income Trust PLC (HINT)
Global High Yield (VHYL)
VanEck Vectors Morningstar Developed Markets Dividend Leaders (TDGB )
Princess Private Equity (PEYS)
3i (III)
Debt (5%)
RM Infrastructure Income PLC (RMII)
CQS New City High Yield Fund Ltd (NCYF)
CVC Income & Growth Ltd (CVCG)
Other/alternative (20%)
Commodities & Mining
Black Rock World Mining Trust (BRWM)
Black Rock Energy & Resources Income (BERI)
Health
International Biotechnology (IBT)
BB Healthcare (BBH)
Infrastructure
Ecofin Global Utilities And Infrustructure Trust PLC (EGL)
International Public Partnership Ltd (INPP)
Green
Renewables Infrastructure Group (TRIG),
Greencoat UK Wind PLC (UKW),
Harmony Energy Income Trust PLC (HEIT)
JLEN Environmental Assets Group Ltd (JLEN)
NextEnergy Solar Fund (NESF)
Property
TR Property Investment Trust PLC (TRY)
Segro PLC (SGRO)
Primary Health Properties PLC (PHP)
The selections have primarily been made because they offer a relatively high (and increasing) yield averaging just over 4%. In addition there are a couple of ETFs (VHYL and TDGB) to balance things out a bit. There are 24 positions, which it could be argued is excessive, but I started with well over 30.
My plan is to spread the investments out over 12 monthly regular instalments (using the free ii facility) to reduce both costs and market timing risk. I'm not intending to use the capital from this portfolio and I'm treating it a bit like an annuity, but equally I'd prefer to avoid seeing really huge write-downs in the valuation in case I ever did need to raise funds.
I'd be interested to take feedback on this as a proposed Natural Yield portfolio. Discussions about whether to use that particular strategy or not we can have elsewhere another time.
I am in the deaccumulation stage, but most of the funds have come from the sale of a business, not prior investments. I have an ISA and a SIPP with quite a few prefs and bank subordinated bonds as well as some single company shares and a mixture of other stuff, but I can't draw anything from the SIPP for another 7 years. I have no other employee pensions nor sources of income, apart from the state pension which I won't be entitled to for at least another 18-19 years.
My mortgage is paid off and I have no dependents. I have an underlying health condition, but what might happen with it is unclear, I could live normally for another 40+ years or drop dead within the next 5. The doctors don't know how that will play out. For that reason (amongst others) I'm not eager to boost my income with conventional paid employment. I require this portfolio to start paying its share of my living expenses in the next 12-24 months. I have a cash reserve, however, which will cover three times my current annual expenses, irrespective of what happens.
Below is my NY portfolio:
Equity: 75%
Debt: 5%
Other/alternative (green, REITs, infrastructure, commodities/mining, health): 20%
Equity (75%)
Lindsell Train Investment Trust (LTI)
JPMorgan Global Growth & Income PLC (JGGI)
Murray International Trust PLC (MYI)
Henderson International Income Trust PLC (HINT)
Global High Yield (VHYL)
VanEck Vectors Morningstar Developed Markets Dividend Leaders (TDGB )
Princess Private Equity (PEYS)
3i (III)
Debt (5%)
RM Infrastructure Income PLC (RMII)
CQS New City High Yield Fund Ltd (NCYF)
CVC Income & Growth Ltd (CVCG)
Other/alternative (20%)
Commodities & Mining
Black Rock World Mining Trust (BRWM)
Black Rock Energy & Resources Income (BERI)
Health
International Biotechnology (IBT)
BB Healthcare (BBH)
Infrastructure
Ecofin Global Utilities And Infrustructure Trust PLC (EGL)
International Public Partnership Ltd (INPP)
Green
Renewables Infrastructure Group (TRIG),
Greencoat UK Wind PLC (UKW),
Harmony Energy Income Trust PLC (HEIT)
JLEN Environmental Assets Group Ltd (JLEN)
NextEnergy Solar Fund (NESF)
Property
TR Property Investment Trust PLC (TRY)
Segro PLC (SGRO)
Primary Health Properties PLC (PHP)
The selections have primarily been made because they offer a relatively high (and increasing) yield averaging just over 4%. In addition there are a couple of ETFs (VHYL and TDGB) to balance things out a bit. There are 24 positions, which it could be argued is excessive, but I started with well over 30.
My plan is to spread the investments out over 12 monthly regular instalments (using the free ii facility) to reduce both costs and market timing risk. I'm not intending to use the capital from this portfolio and I'm treating it a bit like an annuity, but equally I'd prefer to avoid seeing really huge write-downs in the valuation in case I ever did need to raise funds.
I'd be interested to take feedback on this as a proposed Natural Yield portfolio. Discussions about whether to use that particular strategy or not we can have elsewhere another time.