My portfolio is allocated between fixed interest (40%) and equities (60%), which in turn are divided between individual shares and investment trusts.
Since the start of 2014, the FTSE 100 went up and then went down and ended the 6m period down 5 points at 6,744 - if we factor in say a further 1.7% for dividends paid, this will give a ballpark figure of 1.6% total return for the half year.
My resolution for the new year was to try to become a little more patient with existing share holdings. There have been a couple of sales - Dialight was disposed in January following a further warning on profits and in March, I decided to take profits on Carillion and recycled the proceeds into a repurchase of engineer IMI Group.
In recent weeks there have been a few additions to my portfolio - food wholesaler Booker Group, house builder Berkeley Group, and most recently, a repurchase of packaging specialist DS Smith. I have also topped up my holding in retailer Next.
There is no doubt that individual shares are much more volatile than collective investment trusts. For example, the price of easyJet fell over 6% in just one day following a broker downgrade - for me, and maybe other small investors, it is this volatility aspect which causes most problems. Having said that, if you are prepared for a rollercoaster ride, its never going to be boring! As can be seen from the chart, the differing fortunes of Next and Tesco over the past 6 months has made quite a difference to returns.
|compare ftse 100 v Tesco v Next|
(courtesy of Digital Look - click to enlarge)
They have been very much a mixed bag over the past 6 months, providing a total return of 3.1% which is better than the FTSE 100. The better performers have been Next (20%), Reckitt & Benckiser (8%), Unilever (11%) AMEC (13%) and Imperial Tobacco (16%). Some that have struggled over the first half are supermarkets Tesco (- 15%) and Sainsbury (-12%), soft drinks company Nichols (-16%) and recent additions Booker (-12%).
It is pleasing to see the shares have provided a better return than my investment trusts.
Total income on shares over the period is 1.7% .
With the exception of smaller companies, most investment trusts are just about in positive territory. Total return, comprising almost entirely income, is 1.8%.
A year ago I purchased the Vanguard All World High Yield ETF to use as a benchmark for the performance of my actively managed investment trust portfolio. The total return on this tracker has been a respectable 3.4% so this could indeed be a handy benchmark against which to assess the equity part of my portfolio as a whole.
Once again, the PIBS and fixed interest sector has provided the better return with 7.5% over the period which includes income of 3.2%.
As this represents around 40% of my total portfolio, it has helped to boost the overall return to 3.9%. Total income so far is 2.2% and it appears the portfolio is on course to deliver income of around 4.5% for the full year.
I hope to take the opportunity of adding further funds when my house purchase is completed and take advantage of the increased ISA limits - from today £15,000.
As ever, I would be interested to hear how others have done over recent months - leave a comment if you keep track of your portfolio.