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Executive Summary
Performance in income terms was good again this year. After last year’s 50% increase in cash terms there was a further 19% increase this year.
Capital performance has been rather up and down, with it over 9.5% down on last year in September, nearly 4% up earlier in the year and ending the year just a little down at -2.5%
Looking at the unitised performance: in 2021 accumulation units reached their highest value since I started unitising the portfolio in 2003 at £4.13 per unit and income units were close to their maximum value at £1.73 per unit (income units were at their maximum value of £1.79 in May 2018) This year both accumulation and income units slipped back to £4.03 and £1.60 respectively A fall of -2.5% for accumulation units and a fall of -7.3% for income units. Overall the portfolio performance calculated by XIRR was a fall of -2.6% for the year.
Details and Commentary
Portfolio Constituents from HYPTUSS
Value Div Fcst
Share Epic Sector %Total %Total Yield
BP BP Oil & Gas Producers 4.21% 3.05% 4.30%
Aviva AV Life Insurance 2.80% 3.35% 7.10%
AstraZeneca AZN Pharmaceuticals & Biotechnology 4.77% 2.01% 2.50%
BT Group BT-A Fixed Line Telecommunications 1.28% 1.40% 6.50%
InterContinental Hotels Group IHG Travel & Leisure 0.42% 0.16% 2.20%
GlaxoSmithKline GSK Pharmaceuticals & Biotechnology 2.07% 0.73% 2.10%
Marks and Spencer Group MKS General Retailers 0.43% 0.23% 3.20%
Lloyds Banking Group LLOY Banks 2.03% 1.91% 5.60%
Mitchells and Butlers MAB Travel & Leisure 0.03% 0.00% 0.00%
Prudential PRU Life Insurance 1.61% 0.41% 1.50%
Persimmon PSN Household Goods & Home Construction 1.83% 4.81% 15.60%
SEGRO SGRO Industrial & Office REITs 4.10% 2.21% 3.20%
Smith (DS) SMDS General Industrials 2.66% 2.42% 5.40%
SSE SSE Electricity 4.27% 4.18% 5.80%
Vodafone Group VOD Mobile Telecommunications 1.59% 2.06% 7.70%
United Utilities Group UU "Gas, Water & Multiutilities" 1.88% 1.42% 4.50%
British Land Company BLND Retail REITs 1.09% 0.98% 5.30%
Pennon Group PNN "Gas, Water & Multiutilities" 1.86% 1.41% 4.50%
Tesco TSCO Food & Drug Retailers 1.12% 0.87% 4.60%
Sainsbury (J) SBRY Food & Drug Retailers 1.00% 0.96% 5.70%
South32 Limited (DI) S32 Mining. 2.12% 5.22% 14.60%
Legal and General Group LGEN Life Insurance 3.49% 4.58% 7.80%
BAE Systems BA Aerospace & Defence 4.58% 2.85% 3.70%
Galliford Try GFRD Construction & Materials 0.40% 0.33% 4.90%
Petrofac Ltd. PFC "Oil Equipment, Services & Distribution 0.34% 0.00% 0.00%
BHP Group BHP Mining. 3.86% 12.48% 19.20%
Vanguard FTSE All-World UCITS VWRL Equity Investment Instruments 4.88% 0.85% 1.03%
M and G MNG Financial Services 2.27% 3.71% 9.70%
Henderson Far East Income Ltd. HFEL IT - Asia Pacific Income 2.50% 3.79% 9.00%
The Renewables Infrastructure TRIG IT - Renewable Energy Infrastructure 3.27% 2.70% 4.90%
Vistry Group VTY Household Goods & Home Construction 1.51% 2.72% 10.70%
NatWest Group NWG Banks 1.36% 0.94% 4.08%
Middlefield Canadian Income PC MCT IT - North America 2.67% 1.93% 4.30%
Unilever ULVR Food Producers 3.15% 1.96% 3.69%
Currys Plc CURY General Retailers 0.31% 0.25% 4.77%
Shell SHEL Oil & Gas Producers 3.72% 2.29% 3.65%
LLoyds Banking Group 9.25% Non LLPC Banks 1.97% 2.30% 6.90%
IShares Asia Pacific Dividend IAPD Equity Investment Instruments 2.63% 2.75% 6.20%
IShares EuropeDividend Ucits E IDVY Equity Investment Instruments 2.79% 2.61% 5.56%
S&P Emerging Markets Dividend EMDV Equity Investment Instruments 3.19% 2.14% 3.98%
Gore Street Energy Storage Fun GSF IT - Renewable Energy Infrastructure 2.88% 2.77% 5.70%
Aviva 8.375% Pref AV-B Corporate Bonds 2.09% 2.41% 6.86%
Woodside WDS Oil & Gas Producers 1.99% 2.95% 8.80%
Haleon HLN Pharmaceuticals & Biotechnology 0.97% 0.89% 5.50%
Portfolio Running Yield = 5.93%
Value Div
Sector %Total %Total
Oil & Gas Producers 9.92% 8.29%
Life Insurance 7.90% 8.34%
Pharmaceuticals & Biotechnology 6.84% 2.74%
Fixed Line Telecommunications 1.28% 1.40%
Travel & Leisure 0.45% 0.16%
General Retailers 0.74% 0.48%
Banks 5.36% 5.15%
Household Goods & Home Construction 3.34% 7.53%
Industrial & Office REITs 4.10% 2.21%
General Industrials 2.66% 2.42%
Electricity 4.27% 4.18%
Mobile Telecommunications 1.59% 2.06%
"Gas, Water & Multiutilities" 3.74% 2.83%
Retail REITs 1.09% 0.98%
Food & Drug Retailers 2.12% 1.83%
Mining. 5.98% 17.70%
Aerospace & Defence 4.58% 2.85%
Construction & Materials 0.40% 0.33%
"Oil Equipment, Services & Distribution 0.34% 0.00%
Equity Investment Instruments 13.49% 8.35%
Financial Services 2.27% 3.71%
IT - Asia Pacific Income 2.50% 3.79%
IT - Renewable Energy Infrastructure 6.15% 5.47%
IT - North America 2.67% 1.93%
Food Producers 3.15% 1.96%
Corporate Bonds 2.09% 2.41%
Pharmaceuticals & Biotechnology 0.97% 0.89%
Total 100.00% 100.00%
Note: 1...'Value %Total' is the portfolio value of the share as a % of the total portfolio
2...'Div %Total' is the expected dividend of the share based on forecast yield
as a % of the total portfolio expected dividend
This year, my trading was at my usual low levels. I added very little new money (~2.5% of the portfolio value) in addition to reinvesting the dividends.
There was a large special dividend from Aviva and a smaller special from Natwest (neither was counted as income in line with the new policy of treating specials with share consolidations as capital returns), The Aviva special was split between being invested back into more Aviva shares and into a new holding of GSF
Top ups were made in GSK, NWG, AV., VTY, LLOY, AV.B, VOD, WDS*, HLN* most of which were near the top of my HPTUSS when bought.
* new shares received when split out from an existing share (BHP and GSK respectively, WDS was topped up as it was at the top of HYPTUSS, HLN was topped up to bring it up to a decent size for a possible sale later depending on what happens with future dividends.
There was one new purchase (GSF) bought for its good dividend, its positioning in green energy (mostly storage) and as a compliment to TRIG.
I have also started a little extra trading to move some holdings into ISAs due to the reduction in the dividend tax allowance and capital gains tax allowance and possible increases in CGT.
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 VWRL, EMDV, IDVY and IAPD all exchange traded funds and HFEL and MCT which are Investment Trusts. 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 and GSF high yielding infrastructure funds investing in renewable energy assets, I’ve also wanted to invest more in the USA and in this case have included VWRL, which though an all-world ETF is >50% invested in the USA and MCT. Though VWRL is not particularly high yield, neither was the high yield equivalent (VHYL) or ETFs investing in US dividend shares (eg QDIV only yielded 2.5% similar to VWRLs yield at the time) so I went for the extra diversity and better total return of VWRL. I will have another look at VHYL as its yield is improving, and it may be a good time to buy. I’ve also been thinking of adding bonds/debt via bond/debt ITs and have been looking at NYCF, BIPS, SMIF and HDIV in that order of interest.
During the covid year the portfolio yield dropped to 3.5% compared to 4.8% in 2019. Last year the portfolio yield was back to 4.3% and this year it has climbed further to 5.0%. I should look at recycling some of the no/low yielding shares into shares with higher yields (eg PFC and MKS, MAB is worth keeping for the 20% off you get as a shareholder).