Friday, 20 April 2018

Investing for the Grandchildren


Many parents and grandparents like the idea of saving for children/grandchildren. A couple of years back I earmarked an investment into the Vanguard Lifestrategy 80 fund for (then) three grandchildren. 

However since then the number has grown to five and as I will soon become a pensioner, I have been considering siphoning off some of the state pension via a monthly drip-feed into a long term savings plan via one of the global investment trusts. 

I have been doing a little research in recent months looking at the various options. The traditional options include Aberdeen who recently merged with Standard Life and offer a plan with a min. £30/month regular and £150 lump sum however, their flagship option of Murray International has not been performing so well in recent years and therefore I decided to pass. There is also F&C with a min. £25/month but £250 initial lump sum and then the annual charge of £30 and also dealing fees which would not work for me. I also looked at Baillie Gifford which runs my Scottish Mortgage holding.

The 5 grandchildren aged between 9 months and 6 yrs and I want to put aside a regular monthly amount with the option of adding the odd lump sum amount from time to time. I am fairly traditional 'old school' when it comes to money and remember what I was like at the age of 17 or 18 yrs and what I may well have done with a large sum of money at a young age. I therefore want some control over the account as I would like them to have the money a little later, maybe at the age of 21 yrs (earliest) rather than 16 or 18. This rules out a few options such as junior ISAs and bare trusts set up in the children's own name.

In the end I decided to open a children's savings plan with Baillie Gifford as I believe the Scottish Mortgage trust probably offers the best long term growth prospects combined with the lowest costs.

The plan is in my name with the grandchildren all named as designated beneficiaries. The plan offers a low cost way of saving via a range of investment trusts.

There are 4 global trusts :

Scottish Mortgage
Monks
Scottish American
Edinburgh Worldwide

and 3 trusts which focus on the Far East:

Baillie Gifford Japan
Baillie Gifford Shin Nippon
Pacific Horizon

Flexible

The plan will run for the next 20 years or so and over this time-frame I am obviously looking at global growth.

Although I am starting with the one investment trust, I do have the option to split my monthly contributions between two or more trusts. The minimum is £25 for each trust and there is the option for a lump sum addition into any trust - min £100.



The Trust Choice

To start off I have selected the Scottish Mortgage trust as this is the largest global trust with the lowest ongoing charges. I am obviously familiar with SMT as I hold it in my own SIPP and ISA. 

The managers have a good reputation for consistent performance in areas which I believe will provide a good chance of out-performance over the coming years. It has turned £1,000 into £4,350 over the past 10 years which equates to an average of over 15% per year. At this rate, an annual contribution of £1,000 over 20 years would grow to just over £100,000. If it can deliver anything near this over the coming 15 to 20 years my grandchildren will have a tidy sum in the region of £20,000 each - fingers crossed.


Charges

For the best long-term returns, it is important to ensure the costs of the investment are low. This is one of the reasons the low cost index funds generally out perform the more expensive managed funds. The big advantage of the savings plan is there are no platform charges from Baillie Gifford and also no transaction charges for the purchase of shares which is important when a monthly drip-feed plan is operating. 

Therefore the only charges will be the ongoing charges for the Scottish Mortgage trust of 0.44%. This puts it on a par with the likes of holding Vanguard Lifestrategy with ongoing charges of 0.22% combined with platform charges of 0.15% (Vanguard Investor) or 0.25% (AJ Bell Youinvest).

There is however a charge of £22 for each withdrawal but as I am not planning on this for many years it should not be a problem.



For anyone interested in exploring the investment options in more detail here is a link to their savings plan (pdf).

Feel free to comment if you are currently saving for children or grandchildren and share your experience with others.

Monday, 9 April 2018

Mid Wynd Trust - New Purchase


This global investment trust has been on my watchlist for some time as it offers exposure to some areas of potential such as robotics and immunology which I hope will provide some good prospects for growth over the coming decade. 

The recent pull-back in the markets has provided an opportunity to add the trust to my portfolio to sit alongside Scottish Mortgage as a long term growth play. However, at the current price of 474p, the market value of the trust is only £165m compared to £6.5bn for SMT.

Mid Wynd International is a theme-based global investment trust. Artemis took over the management of from rival investment house Baillie Gifford in spring 2014 after long standing manager Michael MacPhee retired. During this period the share price has increased from 275p to 475p - up 72% and the dividend is up 34% from 3.8p to currently 5.1p.

The management team led by Simon Edelsten have built a portfolio of high-quality holdings which focus on a number of trends which offer the prospect of long term growth. This approach is combined with the strategy of value investing which means a disciplined assessment of price to maximise value for money. Obviously there are many options to choose from in any particular theme. The management select from companies with a good record on profitability, good cash generation, a strong balance sheet and identify those which offer a significant barrier to entry for competitors.

The strategy is to hold around 60 - 70 holdings between 8 to 10 themes. Each individual holding is limited to a maximum of 3% of the total portfolio.

Last year the managers decided to offload their shares in Amazon after a very good run and switched the proceeds into Japans tech stocks Nabtesco, Daifuku and Yaskawa. Here's an article on AIC which gives more background.

3 year comparison v Scottish Mortgage
(click to enlarge)

Current themes include Automation/Robots 21%, Emerging Market Consumer 14%, Tourism 13%, Healthcare & Immunology 10%, Online Services 10% and Scientific Equipment 9%.

The main areas for global investments are USA 42%, Europe 21%, Japan 17% and Emerging Markets 14%.

The trust has management charges of 0.5% and ongoing charges are 0.67%. Over the past year the company have paid total dividends of 5.1p which gives a current yield of just over 1.0%.

The manager Edelsten and chairman Malcolm Scott QC both have a significant personal holding in the trust which I always attach importance to when considering a purchase as the interests of management and investors are aligned. Interesting that the largest shareholding is held by Alliance Trust from the same global growth sector.

The disciplined investment process and portfolio construction has provided a decent return averaging around 14% p.a. since the team took over from Baillie Gifford...fingers crossed this can continue for me.

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!

Monday, 2 April 2018

Collectives Portfolio - Easter 2018 Update


It's a wet and unseasonably cool Easter Monday so a perfect opportunity to stay home and catch up on the blog. There have been a couple of changes to the portfolio since my update last October so I will take this opportunity to bring things up to date.

Although this is demonstration portfolio, it largely mirrors my own holdings.

Portfolio Changes

The markets have seen a little more volatility in recent weeks which feels more familiar compared to the month-on-month rises throughout the whole of 2017. There was a significant pull back towards the end of February and a similar downturn in March - we are back to the rollercoaster for a while it seems. The FTSE 100 is down -8.2% over the past 3 months.

As this period saw a strengthening pound, rising above $1.40, I took the opportunity to reinvest some of the cash which has been sitting on the sidelines over the past 12 months or so.

In addition, at the start of the year I sold some of my Vanguard UK income fund as I am looking to reduce equities a little generally and UK in particular and also adjust the allocation towards a more globally diverse mix and introduce a wider variety of assets. The proceeds from the UK income fund have therefore been divided between HSBC Global Strategy Balanced fund and also Royal London Sustainable Managed Growth.

I have taken some of the cash to purchase a new holding in Vanguard Lifestrategy 40 with the Vanguard Investor platform. I have also added Kames Diversified Income and, most recently Scottish Mortgage (which I also acquired for my SIPP last year).

My demonstration portfolio has now been running for over 5 years. There have been a few more changes than I would ideally like and, looking at the portfolio, there are probably a few too many holdings and I will be looking to reduce and simplify at some point.


Returns

Many of my holdings have lost ground in recent weeks. My investment trusts have retreated by an average of 5.0% over the year to-date and my largest holding with Vanguard Lifestrategy 60 faring a little better, down 3.5%.

Since the start of 2018, the FTSE All Share index is down 6.9% (total return) and the global markets are down 4.4% adjusted for sterling exchange.

There has therefore been little progress over the past few months with the portfolio treading water. The value of the combined portfolios at the time of the last update in October 2017 was £93,679 compared to the current value of £92,493 taking account of income withdrawn.

Income

Last year the portfolio generated a natural income of £1,899 and also I took £1,200 from cash on the sidelines to save selling units from my VLS 60 fund. This makes a drawdown of 3.6% of the current value or 4.8% of the original starting value in 2013.

Here is the combined portfolio


(click to enlarge)

Last October there was over £21,000 in cash however much of this has recently been reinvested. The Lifestrategy funds (60 & 40) now account for 36% of the total, UK income funds a further 21%, Corporate Bonds around 10%, Property/Infrastucture 8%, Mixed Asset funds are around 21% and global growth in the form of Scottish Mortgage 4%.

There remains just over £5,000 in cash awaiting reinvestment plus my Vanguard cash buffer of £3,400.

My aim with the portfolio is to generate an average return which is significantly better than the return from my building society and also ahead of inflation - currently the rates are 1.25% from the Coventry (reduced from 1.4% grrrr) and 3.0% respectively.

The average annualised return for this demonstration portfolio after 5.3 years is ~8.0% - down a little on last year partly due to cash on the sidelines delivering no return for the portfolio. However, it continues to deliver the income I require of around 4% each year plus a little capital appreciation on top - so far, so good...

If you have any thoughts on the portfolio, feel free to leave a comment below.

Wednesday, 28 March 2018

City Merchants Trust - Full Year Results


The stock market essentially deals in two kinds of asset; shares and bonds. These investments have very different characteristics; shares make you a part-owner whilst bonds, being debt instruments, turn you into a lender.

They say shares are for optimists, bonds are for pessimists. I have become a little less optimistic on equities over the past year which is why I have reduced the mix to 50:50 (from 60:40 previously).

Similar to my other holding in this sector, City Merchants investment objective is to seek to obtain both high income and capital growth from investment, predominantly in fixed-interest securities.

It is almost three years since I purchased this IT for my ISA as a replacement for a few sales from my shares portfolio.

The overall portfolio is fairly defensive with a significant proportion of higher quality companies which the management consider to be ‘default-remote’.

Results

They have this week announced results for the 12 months to 31st December 2017 (link via Investegate).

Net assets have steadily increased over the year and taking the full year dividend of 10p per share into account, the total return was 9.9% (2016 11.6%). Over the past 5 years, the return has been 49.7%.

CMHY 3 Year Share Price (click to enlarge)

Dividends

The dividend target for the trust is 10p per share paid quarterly. This amount was paid in each of the previous four years and remains the target for the coming 12 months. At the current price of 177p the shares offer a yield of 5.6% which is obviously attractive compared to the rates on offer from our banks and building societies. The average cash ISA rates are starting to increase but only offer a miserly 1.2% according to latest figures from Moneyfacts. In 2007, the average rate was 5.0%.

Of course, the share price will move around as can be seen from the chart. In recent weeks there has been some weakness and the share price has moved from a 2% premium to an 6% discount which has resulted in the yield becoming more attractive.

Regardless of the share price fluctuation, the trust provides some diversity to equities and a steady and predictable quarterly income stream for my portfolio.

Finally, this article is a record of my personal investment thoughts/decisions and is not a recommendation - as always, please DYOR.

Sunday, 18 March 2018

RL Sustainable Managed Growth - An Ethical Option

Last year I was helping a friend to construct a diversified multi-asset portfolio. She wanted a low volatility, low cost, diversified asset mix and decided on a blend of Vanguard Lifestrategy (20 & 40) as a core of the portfolio with a smaller allocation between Personal Assets Trust, HSBC Global Strategy Cautious and Royal London Sustainable Managed Growth.

I have followed the fortunes of this portfolio. I already hold the Lifestrategy funds - 40 & 60, however I have been impressed with the RL fund in particular and decided to add it to my own portfolio earlier this month. The decision was prompted by the Coventry BS cutting my savings rate this month...just two months after they increased it.

This is another 'Steady Eddie' fund which is listed in the IA Mixed Investments 0 - 35% Equity category. The breakdown of asset mix is :

Fixed Investments 71%
UK Equities    12%
US Equities      5%
Euro Equities   4%
Cash & Other   8%

Top 10 holdings include Amazon, Microsoft and Alphabet (Google) which have probably helped to boost returns over the past few years.

Performance

The fund has delivered a return of 8.3% in 2017 and 35% over the past 5 years which works out at an annualised average of  6.4% p.a. The fund is ranked top out of 39 funds in the sector over this period. By comparison, the Vanguard Lifestrategy 20 fund has returned 25% over the past 5 years and is ranked 10th/39.

5 Yr Comparison v VLS20
(click to enlarge)

The fund has paid out 3.6p in dividends over the past year which at the current price translates to a yield of 2.6% paid quarterly and has ongoing charges of 0.69%.

Ethical

This fund is part of a range of ethical options which were previously managed by the Co-operative Asset Management Group and which were taken over by RL in 2013.

The sustainable range of funds may be attractive to the more ethical-minded investor as the investment process involves screening for environmental, social and governance issues.

The funds will try to avoid holdings involved in animal testing, arms trade, pornography, tobacco and nuclear power for example and there will be many investors who share these ethical considerations and who do not want to be a part of exploitative industries.


All funds in the range have a good track record for investor returns. For example in 2017, returns were :
RL Sustainable World    18.0%  (40 - 85% shares sector)
RL Sustainable Diversified  12.9%  (20 - 60% shares sector)
RL Sustainable Managed Growth  8.3%  (0 - 35% shares sector)

So, I can get a reasonable return and invest with a clear conscience with these funds.

If you have views or dilemas about ethical investing feel free to share them and leave a comment below.

Finally, this article is a record of my personal investment thoughts/decisions and is not a recommendation - as always, please DYOR.



Monday, 12 March 2018

Vanguard UK Equity Income - Yr 3 Update


It is now 3 years on since my initial purchase of this UK income index fund.

The Vanguard fund tracks the FTSE UK Equity Income Index. The concept is fairly simple - to give investors access to a broad range of dividend-paying securities from across the FTSE 350, while reducing the risk of being overly invested in a small number of high-yielding shares or particular industry sectors by limiting the percentage of the index invested in any one company or industry.

The Vanguard fund holds around 120 companies - the top ten holdings include all the usual suspects - Vodafone, Glaxo, Lloyd Bank, BP, BATS, National Grid etc.

Ongoing charges are 0.22% and also a one-off dilution levy of 0.40% on purchase. In addition, my broker AJ Bell levy an annual platform charge of 0.25% of the total value of the fund.


Performance

My initial purchase price in May 2015 was £177.50 - by last March it had risen to £181. However, it has retreated over the past couple of months and is back to just below my entry price, currently £174 and a total return of just 1.0% over the past year (incl. income).

By way of comparison, the total returns for some of my UK income trusts over the past year -

City of London  2.2%, Edinburgh -7.1%, Finsbury Growth & Income  10.6% and Temple Bar 2.5% (average 2.0%).

At the start of the year I took the opportunity to sell off part of my Vanguard holding as I am looking to reduce my UK equities and moving down the risk scale with more globally diverse multi-asset funds being introduced to my portfolio. I have invested the proceeds between HSBC GlobalStrategy Balanced and Royal London Sustainable Growth fund.

3 Yr Comparison v HSBC Global Strategy
(click to enlarge)

Income

The fund has so far provided me with income payments of 776.92p in 2015, 775.65p in 2016 and a nice 10% increase to 857.87p in the past year - which gives a current yield of 4.8%. However, the income was inflated by the weak level of sterling in 2017 so I am expecting a reduction this coming year. Dividends are paid out half yearly in June and December. 

The income distribution represents the combined dividends received from all holdings in the fund (less costs and fund charges) so, unlike investment trusts which hold reserves to smooth out the income payments, I do not know exactly what payment will be received in my ISA until it actually arrives.

It’s early days - just three years since purchase but I am happy to continue with the remaining holding of this income fund which seems to be doing the job required for my income portfolio.

As ever, this article is a record of my personal investment thoughts/decisions and is not a recommendation - as always, please DYOR.

Wednesday, 7 March 2018

Tritax Big Box - Full Year Results


This commercial property REIT was added to my income portfolio in October 2016 following a placing of shares at 132p.


Tritax Big Box is the only Real Estate Investment Trust dedicated to investing in and funding the pre-let development of very large logistics facilities in the UK. The company believes these properties, known as Big Boxes, are one of the most exciting and highest-performing asset classes in the UK real estate market.

Big Boxes offer tenants economies of scale and cost savings not available from smaller, older buildings. They are also crucial to the efficient and effective operation of retailers, and in particular the fulfilment of e-commerce orders. Because the nature of what the companies use these buildings for is so fundamental to their very existence, Tritax is unlikely to suffer from unexpected vacancies.

BBox have sought to distinguish themselves through the quality of location and modernity of their real estate assets let to high calibre tenants, which provide long term income and attractive prospects for growth.

The group hold a portfolio of distribution assets which are located close to motorways and are let to tenants including some of the leading supermarkets - Sainsbury, Tesco, Morrisons as well as M&S and Next. Some other tenants include:

Amazon - the world’s largest electronic and e-commerce retailer

Argos -  the UK’s leading multi-channel retailer, offering more than 33,000 products both on-line and in-store.

Brake Bros -  the number one food service distribution company in the UK

Ocado -  the world’s largest dedicated online grocery retailer.

Wolseley - the world’s number one distributor of heating and plumbing products

The UK has been one of the fastest global adopters of online retail and continues to exhibit significant growth in the sector, driving new demand for logistics real estate including Big Box assets. Successful large-scale retailers (online and conventional) and logistics providers are increasingly relying on the Big Box asset and demand is evident from companies up-scaling to such facilities.

Results

Tritax Big Box was first listed at the end of 2013 at an initial floatation price of 100p. During 2016 it raised £550m of equity through two substantially oversubscribed share issues. In May it raised a further £350m which was invested over the rest of 2017 and brings the market cap to £2bn.

They have today issued 
results for the 12 months to end December 2017 (pdf via website). Total Shareholder return for the period was 15.2%. The company target a total return (being the increase in EPRA NAV + dividends paid) of 9.0% per year - the figure for 2016 was 9.6%.

Profits came in at £247m (2016 £92m) and total portfolio assets are valued at £2.6bn across 46 assets (2016 £1.9bn across 35 assets).


Income

Building on payouts for the previous three years of 4.15p in 2014 and 6.0p in 2015 and then 6.2p, the declared dividend for the full year 2017 is 6.40p rising to 6.70p in the coming year. At the current share price this provides a fwd yield of ~4.7%.

The company have now moved to quarterly dividend payments. The Group's dividends are not quite covered by adjusted earnings of 6.37p, which are underpinned by strong rental stream and low cost base.

Commenting on the results, chairman Richard Jewson said:
“We have a sector-leading portfolio of UK Big Box assets that are benefiting from structural change driven by increasing e-commerce penetration, and the operational and financial benefits which they can provide to our Customers. The fundamentals of our market remain positive and are largely unaffected by current geopolitical and economic uncertainties. Despite the uncertainties it brings, Brexit may provide a silver lining, since with increased border controls our Customers will require more warehousing domestically, further supporting our business case".

Summary

I like what I have seen so far and I believe the model offered by Big Box which is basically tapping into a part of the online revolution, has potential for growth as well as a fairly secure dividend underpinned by the long leases and upward-only rent reviews. The share price has gained 8% compared to my purchase price of 132p. In addition, I have received a dividend of 6.4p and the prospect of an additional 4.7% increase to 6.7p for the coming year.

The way we shop has changed quite significantly over the past decade and internet sales are forecast to account for over 20% of total sales by 2020. To remain competitive in this environment, retailers need to have large, highly efficient distribution facilities that can fulfil orders quickly and accurately. This need is only becoming more acute as customers demand ever-shorter delivery times.

The demand for the BIG boxes offered by this REIT is likely to remain strong which means the dividend is reasonably secure and should easily keep pace with inflation.

This article is a record of my personal investment thoughts/decisions and is not a recommendation - as always, please DYOR.

Thursday, 1 March 2018

A Diverse Portfolio

This is an update of an article first published in 2013 and forms part of my 'basics' investing series.

I guess most investors will have read somewhere that its generally good to hold a diversified portfolio. As with many aspects of life, it's not generally a good idea to put all your eggs in one basket. 

Therefore, investing in a broad mix of assets such as equities, bonds, property etc. in many regions around the world will protect investors from a downturn in any single sector or region and also reduce the volatility associated with an over-reliance on for example equities or emerging markets. The aim will be to create a mix which can provide an acceptable level of return for the degree of associated risk undertaken.

Novel Investor (US-based) has created a nice asset quilt visual chart which clearly shows the returns for several types of asset over a 15 year period. I hope it will demonstrate how difficult it would be to select the best performing asset class year after year and why the better strategy is to hold a good mix of all assets.

Creating a simple yet diverse portfolio can be very straight forward. Pooled investment vehicles like investment trusts, exchange traded funds and OEICS are a good way for the small investor to build a diversified portfolio. Indeed with the broadly diversified Vanguard LifeStrategy fund you have the option of a one-stop investment vehicle providing all the diversity and balance that may be required.

A Simple Option

Let's just take a look under the bonnet of the Lifestrategy 60 fund which represents my largest portfolio holding. It is a blend of several underlying Vanguard funds - some hold equities and some hold bonds
.
Equity Funds - 60%

FTSE Developed World (ex UK)
FTSE UK All Share Index
US Equity Index
Emerging Markets Index
FTSE Developed Europe (ex UK)
Japan Index
Pacific (ex Japan) Index

Bonds - 40%

Global Bond Index Sterling Hedged
UK Government Bond
UK Inflation Linked Gilt Index
UK Investment Grade Bond Index
Euro Government Bond Index
US Investment Grade Credit Index
US Government Bond Index
Japan Government Bond Index
Euro Investment Grade Bond Index

So, in one single multi-asset fund there are 16 sub-funds which between them hold around 18,000 individual securities from all corners of the world. Vanguard frequently rebalance the funds to maintain the equity proportion at 60%. For running such a fund they charge the investor 0.22% which works out at £2.20 per year for every £1,000 invested. Investing does not come much more diversified.

Since its launch in June 2011, the fund has provided an average annualised return for investors of 9.0% per year which would certainly be 'good enough' for me.

Advantages of a Diversified Portfolio

It's all about the balance between risk and reward. Some assets such as equities will provide a better return than bonds over the long term. However, they are more volatile than bonds. For example, during the economic meldown of global markets in 2008, the FTSE lost over 30% in a matter of just two short months. The following year it was up 30%...this was a very testing time for anyone purely invested in equities and many investors were emotionally unprepared for the rollercoaster ride.

FTSE 100 Tracker July 2008 to June 2009

For those who held a more balanced mixed portfolio of say 50% eqities/bonds, the most they would be down in 2008 was nearer to 12% with a corresponding rise of 16% in 2009...still a little volatile compared to previous years but much less of a stomach-churning ride of the 100% equities and I believe most investors would be much less unnerved during a severe downturn.

Here's a link to Vanguard's asset mixer tool which provides a useful visual graph of the annual rise and fall of various allocations of equities/bonds/cash over any designated timeframe. It can be very useful for those wanting to explore asset allocation and their individual risk profile.

In addition to my Lifestrategy funds, I hold several investment trusts - some from the UK growth & income sector such as City of London and Finsbury Growth & Income, some for global growth such as Scottish Mortgage as well as others focussed on infrastructure and fixed income and for exposure to UK smaller companies I hold Aberforth.

Personally, I would never place all my investments with one fund or even several funds with just one provider. I like to spread the risk - some index funds, some professionally managed investment trusts. I like exposure to different sectors of the economy and prefer global rather than confining my investments to the UK-listed investments .

However, some would argue it is possible to be over-diversified. Legendary investor Warren Buffett suggests that if you diversify too much you might not lose much but equally, you won’t gain much either. His approach is to concentrate on companies he knows inside out and select a few well researched options out of which there is the expectation of some big ‘winners’.



As can be seen in the chart, the benefits of diversifying a portfolio tail off as more investments are added to the mix.

Buffett is exceptionally experienced, skilled and disciplined in his approach to investing - many try to emulate his success but no one has come close. A return of just under 20% cagr over the past half century is a phenomenal achievement.

For the average small investor therefore, I would think the better strategy would be to focus on a good mix of assets which should closely match your temperament and appetite for risk. The diversified and balanced portfolio will always miss out on the very best possible returns but equally will avoid the terrible car crash whist delivering what should hopefully be acceptable and a 'good enough' return.

Feel free to comment below on how you go about maintaining a diverse portfolio.

Wednesday, 21 February 2018

diy investor is 5 years old!


Well, when I started this blog back in 2013, I never imagined it would be still trundling along 5 years later. I suspect this may be partly due to having quite a bit of spare time since taking early retirement and partly due to the fact that I am probably too lazy to 'get a life'.


It is a record of the later years of my personal investing journey and, looking back, it is clear the focus has changed quite a bit since February 2013. Back then, I held most of my equities in a mix of investment trusts and individual shares. Over the past couple of years the shares have been reduced and now are all gone as well as some of the trusts. I have increasingly embraced the lower cost index alternatives such as Vanguard LifeStrategy.

First of all a big thanks to everyone who visits on a regular basis. Page views seem to have increased quite a bit since the early days.

Here are a few stats...

Total page views to date - 801,450, average per month is now around the 16,000 mark.

A total of 394 posts (200 in 2013/14) and most viewed article - 
Asset Allocation Revisited with 35,500 so far, followed by Vanguard Lifestrategy - A One-Stop Solution. In 2016 I was fortunate to be invited to write a guest post for Monevator following the publication of my latest book 'DIY Simple Investing' and a link in the article has boosted the views. Other popular articles are Work Out Your Retirement Figure and Vanguard Lifestrategy - 5 Year Performance.

The main sources of referring sites have been Monevator, Retirement Investing Today, Simple Living in Suffolk (now in Somerset!) and Money Saving Expert - many thanks!

Obviously, the majority of people visiting the blog are from UK (70%), however I am continually surprised to see how far diy investor has reached globally - USA (20%), and the remaining 10% between Germany , France, Russia, Ukraine, Spain, Netherlands, Belgium, Ireland, Italy, Japan, Australia, India, China, Indonesia, Singapore, Serbia and New Zealand.

Development

As I say in my book “DIY Simple Investing”, family and friends soon change the subject when personal finance is discussed so, on a personal level, its really good to have an outlet for my ‘hobby’ of personal finance and investing and to be able to share it with what seems like an ever expanding community of like-minded people.

It is, of course, always interesting to look back at earlier posts and sometimes I am surprised at just how far my thinking has changed and developed since starting the blog.

In the early days, I was firmly committed to a strategy of generating a natural income from a mixture of individual shares, investment trusts and fixed interest securities. Over the past few years, I have read many interesting articles on various blogs and, as the time has passed, I have begun to embrace the low cost index philosophy. I have reviewed my former strategy and believe my process has become stronger and more balanced - as well as simpler!

After 5 years I find I am still enjoying my blogging and so long as I remain  positive and others keep visiting, I hope to keep things going for a while longer - although if my portfolio is reduced to a couple of Vanguard trackers, there may not be too much to write about!

Thanks again for sharing the journey and for the comments…Here's to the next 5 years, assuming we all get through Brexit!

Tuesday, 20 February 2018

Temple Bar - Full Year Results


I hold this investment trust in my ISA. It is part of my ‘basket’ of income-focussed investment trusts designed to provide an above inflation rising natural income and hopefully some increases in capital over the longer term.

TMPL has been managed by Alastair Mundy since 2000. He takes a contrarian view on the timing of buy and sell decisions - buying the shares of companies when sentiment towards them is thought to be near its worst and selling them as fundamental profit improvement and/or re-evaluation of their long-term prospects takes place.

This contrarian approach centres on long-term investment in cheap, out-of-favour companies in the belief that over time, these will be affected by reversion to mean.

This approach has proved very successful over the longer term with the trust outperforming the FTSE All Share index over the past 5 & 10 years. In 2016 it was one of my best performing trusts with a total return on net assets of 20.4%.

Results

They have today published full year results for the 12 months to end 2017 (link via Investegate). Unfortunately, they were unable to outperform the FTSE this year with total return of net assets increasing by 9.7% compared to a gain of  13.1% for the FTSE All Share index. The contrarian approach often requires long periods before the benefits for the trust are realised.

3 Yr Performance v FGT
(click to enlarge)


Temple Bar has ongoing charges of just 0.6%, a natural dividend yield of 3.3% and provided the third-best 10-year total returns in the UK equity income sector (top place held by Finsbury Growth & Income) despite a poor run in 2014 and 2015.


Income

The trust is committed to paying a rising dividend year on year and has met this commitment for the last 34 years.

The board are recommending a final dividend of 17.48p making 42.47p for the full year - an increase of 5% on 2016. The dividend is covered by income receipts of 43.3p.

This trust is a relatively small proportion of my total portfolio currently ~3% or so and I am happy to retain on the basis that it provides a reasonable income and has a good track record of providing some decent appreciation to capital over the longer periods.

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!

Wednesday, 7 February 2018

An Additional New Platform for My ISA

In 2015 I opened an additional ISA with Halifax to hold my Vanguard Lifestrategy 60 fund and for a one-off buy and hold this is still cheaper than Vanguard so I will keep it going. I also have my AJ Bell Youinvest ISA in which I hold my mix of investment trusts which I will also retain. 

However, last May, Vanguard Direct launched their own platform with annual charges of just 0.15% per annum and I made a mental note to look at a new ISA for this coming year with Vanguard when the time came around to add to my Lifestrategy holding.

I have been accumulating cash from various sales over the past year and I have held off adding to my global funds mainly due to the weakness in sterling following the EU referendum outcome. However, in recent weeks the pound has strengthened considerably against the US Dollar and recently clawed its way back above the $1.40 level for the first time since June 2016. In addition, there has been a sharp correction in global markets which has been the trigger to dip a toe in the water.

In the past week I spent a few minutes online to open my new S&S ISA with Vanguard Direct and I will now start to build my holding in the VLS 40 but will take things slow and steady and drip feed small sums back in as the markets are still close to their all-time high point. As Vanguard do not make a charge for the sale and purchase of funds, it seems to be a slightly better option than Halifax with its £12.50 dealing fee.

The only charges for my new ISA are the annual platform fees of 0.15% - which works out at £1.50 per year for each £1,000 invested or £30 p.a. for the full ISA allowance of £20,000. Of course, I am limited to Vanguard funds however for me this is not really a problem as I can hold a wider selection of investments with my other two providers.


My initial purchase is the VLS 40 (inc) @ £146 and I hope to make several additions over the coming year or so.