This blog is designed to record the investment journey of a UK based small investor. I hope to make a modest contribution to the collective wealth of investing knowledge made freely available to ordinary people. I am the author of five books [see sidebar and books tab]
I don't usually review my portfolio at this point
however, given the dramatic start to the year, it seems worthwhile taking stock
and seeing how the dust has settled.
We are clearly now in the midst of a crisis - pubs,
cafes, theatres and gyms ordered to close; all sporting events on ice with the
Olympic Games postponed for a year; the chancellor borrowing hundreds of billions to
support businesses and pay 80% of everyone's wages; the Bank of England base rate
reduced to the lowest ever 0.1%; the death toll rising exponentially -
currently up 381 563 in the past 24 hrs to a total of 1,800 2,352...these are extremely
Before the outbreak, the OBR were forecasting
government borrowing for the coming year 20/21 at £55bn. The scale of increased
borrowing is currently unclear as we don't know how long before business as
usual resumes but the estimates are that borrowing could easily exceed £200bn
next year. As with the financial crisis of 2008, the long term effects of this
current crisis could be just as long-lasting.
Naturally there has been extensive volatility on
the markets these past few weeks - possibly the worst I have seen. I must admit that I underestimated the impact this would have when the outbreak started in January. In early
March the FTSE saw its largest one day fall -10.8% since 1987 with a similar
pull-back in the US where the Dow Jones recorded its biggest one day points
fall of over 3,000. Then, a week later, the FTSE records its biggest one-day
points jump of 452 and the Dow Jones climbs a record 2,100 points and the
biggest gain for 90 years...remarkable...the global markets don't get any more
dramatic than this
The price of Brent Crude crashed from a high of $60
in February to under $25 in the space of just a couple of weeks. The oil stocks
have been particularly hard hit with the likes of Shell and BP down around 60% at
one point... all in just the past month. So, I am very pleased I decided to
make my portfolio fossil-free last year. These oil majors make up a large part
of the FTSE 100 and the index is down around 25% since the start of the year
whereas the S&P 500 has retreated just 18%.
Of course, these dramatic market drops provide an
opportunity to pick up a few bargains...be greedy when others are fearful!
Unfortunately I am not so good at timing these acquisitions, jumping in far too
quickly - I added SSE in late Feb at £16...a couple of weeks later it was down
to £12, Ceres Power at 427p...dropped to 250p and then a week later added
Unilever at £43.40, National Grid at 875p, repurchased Legal & General at
168p and then Smart Metering for 558p.
I have also topped up various existing holdings as
the market tanked including TRIG, UKW, INRG and TR Property.
Bargains exist in this market. Opportunity
seekers waiting for the “right” time to buy will never find it. At some point,
just do it. You’re practically guaranteed to be wrong in the short
term, but right in
the long term. It just takes courage. (Novel Investor)
So, quite a few additions to my portfolio over
recent weeks, all of which stemmed from the market falls. For the time being,
my spending spree has come to an end as all the spare cash has now been
deployed but of course the new ISA allowance starts next week.
The FTSE 100 started the year at 7,542 and
following the sell-off during just a single month, dropped 1,870 points to
5,672 if we add back in say a further 1.0% for dividends paid, this will give a
ballpark total return loss of 23.9%
for the past 3 months.
Although no longer a part of my portfolio due to
fossil fuel holdings, the Vanguard Lifestrategy 60 fund is a diverse mix of
global equities and bonds and provides a good benchmark for a balanced global
portfolio. The fund is down 11.1%
over the year to date (the VLS 80 down 15%).
These holdings now make up 90% of the total
portfolio and appear to be holding up reasonable well compared to the wider
The better returns have come from ITM Power up 69%,
largest share holding Orsted up 5% and
Proton Power 15%. My largest renewable energy trust TRIG has fared reasonably
well and is down just 4% including the quarterly dividend paid today. Recent addition Smart Metering is up 15% and Legal & General up 16% however these have been
offset by SSE down 14% and Ceres Power down 16%.
The total return including dividends for my green
allocation is -1.5%.
The Complete Basket
My only other holdings are TR Property
-25% and Mid Wynd IT -8%.
I have just updated my spreadsheet with the returns
including dividends of my actual investment portfolios - sipp flexi drawdown
and ISAs - for the 3 months to end March.
As a whole, the portfolio has
delivered a total return of -3.2% over the past 3 months.
getting on for 18 months since I started to move my portfolio towards more
climate-friendly investments and it is reassuring to see they have held up
reasonably well during this market storm. I certainly feel much better
investing in the likes of Orsted, a global leader in offshore wind, rather index
funds with their fossil fuel companies and the big banks that finance their
there will be volatility in the markets for some weeks or even months as this
pandemic unfolds but at some time, hopefully sooner rather than later, optimism
will return, the restrictions will be removed and we get back to something like
What we are
left with is the experience of a sudden market crash and the feelings it
brings. Fortunately, storms like this don't come around very often - maybe once a decade or so but when they strike it's often very sudden and there is no time to react. As usual it takes courage to invest during such a dramatic downturn, patience to ride
out the storm and humility to accept that the markets will often make our
decisions to buy or sell appear foolish.
"Survival as an
investor over that famous long course depends from the very first on
recognition that we do not know what is going to happen. We can speculate or
calculate or estimate, but we can never be certain". (Peter Bernstein)
For me there are a few positives from all this:
1. The pandemic has
shown that it is possible to change global-scale patterns of human behaviour
very quickly when threats appear. I am therefore hopeful that a similar
response can be made in relation to the climate emergency. I suppose the acid
test will be whether governments and enough people appreciate the scale of the
climate threat in the same way as Covid-19.
2. The crisis is
bringing out the very best in us - 2,000 former doctors and nurses return to
the front line whilst 750,000 volunteers sign up online within a couple of days
- and I believe it will help to unite the country after the division of recent
years due to Brexit.
3. The traffic is
much lighter, air quality has improved and it's so much quieter everywhere -
something I really appreciate and such a contrast to normal times.
investments aside, what I think I take away from the crisis is the increased
sense of valuing the things that really matter - the health and well being of
family and friends, a roof over your head, a warm comfortable bed at night,
clean safe drinking water, food in our shops and supermarkets (despite some
shortages at times), a first class national health service, a walk in the fresh
air and just hearing the birds sing and see the green leaves of the hawthorn
and the wildflowers. It's good to keep a sense of appreciation of these simple things we all
often take for granted and retain a sense of perspective.
of humanity's problems stem from our inability to sit quietly in a room
(Click to enlarge)
Stay safe, stay at home wherever possible and help to take the pressure off the NHS which will be tested to the limits these next few weeks.
Feel free to share your thoughts on the crisis...and if you keep track of portfolio returns,
feel free to leave a comment and share with others how your investments have
fared over recent weeks.
exchange traded fund gives investors an opportunity to invest in a wide range
of globally diverse companies involved in renewable energy.
an index fund and tracks the S&P Global Clean Energy Index which is made up
of 30 of the worlds leading companies in the clean energy sector.
fund was added to my green portfolio last March, shortly after I put my index
funds under the spotlight and decided to move my portfolio away from fossil
fuels. My initial purchase price was 433p and later in the year I topped up my
holding at 490p and topped up a third time last week at 435p. The shares are
held in my SIPP drawdown and also my ISA with AJ Bell Youinvest.
ETF fund holdings include :
Enphase (6.6%) a global energy
technology company and the worlds leading supplier of solar microinverters. These connect solar generation, storage and management on one intelligent
platform. The shares are listed on the US Nasdaq exchange and have grown
quickly over the past year from $9 to currently $32.
Solaredge Technologies (5.5%) another Nasdaq-listed
US company providing inverter solutions across all segments of the solar PV
market. Over the past year the stock has risen from $38 to currently $79.
Vestas Wind (6.5%) one I also hold as a
stand-alone in my portfolio
Siemens Gamesa (7.4%) a Spanish-based
renewable engineering company involved in the manufacturing of wind turbines
and related servicing. Their products have been installed in over 90 countries all
around the world with a current combined capacity of 100GW.
fund had a good run over the past year reaching a high point of 620p in mid
February but was obviously affected by the global sell-off and the share price
dropped back around 30%. At the current price of 439p my total return has been -5.0%
for the year including dividends of 8.2p
which is a yield of just below 2.0% and subject to exchange fluctuations.
global renewable energy sector is likely to see continued growth over the
coming decade as the world attempts to address the climate crisis and move to
curb carbon emissions. We are weaning our economies off fossil fuels and the
transition to clean energy such as wind, solar and wave power is well underway
and likely to accelerate. As can be seen from the chart, the global renewables
represented by INRG has performed much better than the oil sector represented
One Year Share Price INRG v RDSB
(click to enlarge)
taken a punt on a few individual companies such as Orsted, Ceres Power and
Vestas Wind for example but a diversified approach with the likes of this ETF
probably makes more sense so I am happy to continue holding these shares. They
currently make up around 9% of my green portfolio.
we get past the coronavirus panic, I am hoping this ETF will bounce back but
for the time being I think it's just a case of sit tight and try not to panic!
As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!
SMS is an AIM-listed small company with HQ in
Glasgow. Current market cap. is around £650 million. It employs over 1,200 people throughout the UK and its core business
as the name suggests is the roll out of smart meters and carbon reduction
assets to facilitate the transition to a low carbon future.
They offer a comprehensive service to the energy
suppliers including the operation of metering databases as well as connection
services directly to large energy consumers and multi-site operations. No other
UK organisation offers the same in-house service.
Their mission is simply to deliver the future of
smart energy. Customers include the large utility companies as well as smaller
independent providers and new market participants; large UK housebuilders and
also property developers; large supermarkets, retail chains, banks as well as
rail and telecoms companies
If the UK is to reach its target of net zero
emissions by 2050, it will be crucial to look at new ways of how energy is
created, stored and used. Smart meters will be an essential key to the creation
of a more flexible, decentralised low carbon energy system and the government
are already committed to the widespread roll out of smart meters by 2024. So
far, around 16 million homes have been converted which leaves a further 36
million homes to have a smart meter fitted over the next four years.
Many energy providers will no longer allow
customers to switch supply unless they have a smart meter so this should help
to speed up the roll out.
Smart meters connect the user with their energy
supplier and the wider energy network. When enough customers are connected, it
will be possible to more accurately predict how much energy is required around
the country at any particular time of day and should help to match supply and
demand and balance the entire grid. Another feature is the possibility that
relatives could be alerted if elderly people showed signs of dementia due to unusual
energy usage or dangerously underheated homes in Winter for example.
It should be possible to create a local
neighbourhood network and trade energy with other groups or communities as well
as sell surplus energy from combined solar energy panels to the highest bidder.
Another aspect is using smart time-of-use tariffs to charge the electric car at
the cheapest rates and also use the combined resources of energy stored in car
batteries to move both ways.
The company recently announced results for the
full year of 2019 (link via Investegate). Pre tax profits grew by 2.1% to £5.5m
on revenues of £114.3m (2018 £98.5m). The full year dividend was lifted by 15%
to 6.88p and a final dividend of 4.58p will be paid 4th June with XD date of
There was a 20% increase in recurring revenues to
£90.1m and assets under management increased from 3.1 million to 3.7m over the
They also announced a new partnership with
Columbia Threadneedle Sustainable Infrastructure Fund to develop its pipeline
of carbon reduction asset opportunities.
Earlier this month the company agreed a sale of a
minority of their meter assets for £291m. This will enable the implementation
of an enhanced long-term sustainable dividend policy.
on the results, Alan Foy, Chief Executive Officer:
increase in our key financial metric - ILARR - and a 14% increase in EBITDA in
extremely challenging markets, is a testimony to our market position and
Last week's transaction will not only realise
considerable cash returns and demonstrates the substantial value of our smart
meter portfolio but also will enable us to enhance greatly shareholder value
with a significant and sustainable increase in dividends.
The UK is the
first major economy to adopt net zero emissions by 2050, mainly by
electrification strategies. This will need the establishment of a decentralised
and decarbonised energy system as well as substantial capital to meet that
A combination of our strengthened balance
sheet to support our smart meter rollout programme, today's partnership
announcement with ESIF and our energy management division's track record, positions
us extremely well to accelerate and rapid expand our CaRe assets in the current
and emerging electricity generation, storage, lighting, heating and
12m share price comparison v AIM 100
The markets responded positively to the results
and sale of assets, the share price briefly topped the £6.00 level but has retreated due to the
COVID-19 fears. The shares joined my portfolio this week at the price of 558p. I am
keeping fingers crossed this is not another acquisition that would have been
better made a week or two later!
Bargains exist in
this market. Opportunity seekers waiting for the “right” time to buy will never
find it. At some point, just do it. You’re practically guaranteed to be wrong in
the short term, but right in the long term. It just
Stay safe, avoid the crowds and keep washing those
As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation... investing in smaller companies can be rewarding but is higher risk - always DYOR!
Readers may recall that this shareholding was
added to my portfolio last August however it seems to have been edged out a few
months later when I needed additional
funds to purchase my AFC Energy shares. I continue to follow sold investments
and what sparked my renewed interest was the announcement that they were
launching a new fossil-free pension fund later this year - something I have
been pushing for over the past year or so.
Although far from perfect, LGIM have a decent record on climate-related issues and try to hold companies to account at their AGM and push directors of the large oil companies to comply with their obligations under the Paris Agreement on climate change. In a recent survey, Shareaction examined the
record of 75 of the world's most influential asset managers on issues of
responsible investments, climate change and human rights. L&G and Aviva
were two of only five managers to be awarded an A grade. However 50% of managers
had a very limited or substandard approach to ESG issues - in fact the six
largest global operators including BackRock (D) and Vanguard (E) were all in
the bottom two catagories and all based in the US which suggests the Americans fund managers under the Trump administration are far less progressive on ESG issues.
Obviously when investors can choose where to
invest their long-term pension savings, many will be attracted to a fund that
excludes the sort of companies like Exxon, Shell and BP that continue to
compromise the very future those savers will be looking forward to in
50% fall in Shell and BP 2020 Year to Date
(click to enlarge)
During the recent market turmoil, these fossil
fuel multinationals have been hammered with the share price falling by over 50%
since the start of this year. Personally I don't really see them recovering any
time soon without a fundamental shift in strategy to embrace renewable energy
and phase out oil and gas to meet their obligations to the wider global
Of course LGEN has been caught up in the market
turmoil and its share price has fallen by over 40% since January so I was able
to pick up the shares for my portfolio at 168p on Monday. That was a
considerable discount - 39% - to the 275p when I sold them last November.
The company released results for the full year
2019 (link via Investegate). Profits increased by 12% to £2.1bn with earning
per share of 28.6p which supported a 7% uplift in the dividend to 17.57p which
makes a nice dividend yield of over 10% at my purchase price. The final
dividend of 12.64p will be paid 4th June and the shares will go XD 23rd April.
I must admit to having underestimated the seriousness of
this outbreak and its impact on the global markets. In February, I was thinking it would not be so dramatic and possibly we would all be over the worst by Easter. As a result I have jumped in too early with some of my recent
additions. Of course, this outbreak poses threats but it is also an opportunity to gain experience and to understand more about ourselves. These are the most testing of times and the markets are
understandably jittery so it would not surprise me at all to see further
weakness in the coming couple of months.
Coronavirus takes down the global economy...
However, this pandemic will start to
blow over, the pressure will ease and we will all resume our normal routines
and the markets will bounce back...they always do. So it's just a question of
patience, trying to keep calm and maintaining a sense of perspective - of
course, easier said than done!
As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!