Sunday, 19 May 2013

Individual Shares Portfolio


Back in early January, I did a guest post for RIT “Investing for Income Using Shares”. Here’s a link to that article.

As with a recent article relating to my investment trusts, I think it could also be a useful exercise to monitor an income portfolio based on 18 individual shares from my portfolio. Again, I have taken prices from the start of 2013 and allocated a nominal £1,500 for each share.

Here’s the portfolio showing current valuations and including dividends accumulated since January.


(click to enlarge)


Some of the above have been the subject of an article in recent weeks - Reckitt, Aberdeen, Greggs, Dialight, BSkyB, Abbey Protection, DS Smith, Tesco and, most recently, Sainsbury. I will comment on others as results are announced later in the year.

Income has been almost exactly as expected - the total for the full year should be around £1,100. However, the overall  return, (including those dividends paid to date) of 8.4% is disappointing considering the FTSE 100 is up over 15% on a total return basis since the start of the year. Furthermore, the return on my investment trust portfolio is up around 16% which is prompting me to seriously question whether the more profitable route over the longer term would be to switch the proceeds of the shares entirely to investment trusts.

I have been running parallel income portfolios using shares and investment trusts for over three years and each year, the total returns from the investment trusts has been slightly ahead of the shares portfolio - maybe 2% or 3%. As we have seen with management charges, the effect of an extra 3% or 4% compounded over many years can make quite a difference to your final outcome.

I will run the twin track portfolio until the end of the year and see how things turn out - I think 4 years will be a sufficient length of time to reach a conclusion.

As ever, slow & steady steps…..

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