Tuesday 1 July 2014

Half Year Portfolio Review

Following on from my end of 2013 review, I have just reviewed my portfolios - sipp drawdown and ISA - for the past 6m to the end of  June.

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% .

Investment Trusts

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.

Fixed Interest

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.


  1. Hi John

    I won't roll up H1 until the end of the week earliest as a couple of my funds are laggards in calculating June month end distributions. To the 07 June '14 I was up 4.03%. The last few weeks will see me down around 0.1% or so and so this time I'll probably match your "overall return to 3.9%". Importantly to the 07 June '14 I was however beating my benchmark (68% FTSE100 and 32% Corporate UK Bond) portfolio even after all expenses. So looking like a positive H1 for me.

    As an aside and not sure if you noticed but yesterday I popped RDSB and PSON into my HYP. Two I don't recall you ever mentioning. Have you ever considered either for your portfolio?


    1. Hello RIT,

      Good to hear from you and thanks for updating with your half year performance. As you say, a positive start to 2014.

      Good to see you are adding to your higher yielding shares portfolio. Both look to be solid FTSE 100 blue chips and I have held both in the past. RDSB was part of my SIPP portfolio for several years during the build phase and, from memory, made a good contribution of both dividends and capital appreciation. When I moved the SIPP into drawdown, I decided to dispose of the individual shares and hold my equities via investment trusts.

      Pearson was in my portfolio when I started this blog but I had a bit of a wobble around a year back and sold quite a few shares - incl PSON - from memory it pays out quite a low proportion of profits in dividends (maybe 35%) and this was one of the attractions. I think a lot of focus is now on education.

      Good luck with these two and look forward to seeing how the portfolio builds and matures over time.

  2. Up 2.36% this H1 for all equities, ETFs and ITs. Lacklustre so far when compared with last year, but that's how it goes.

  3. Thanks for posting SG - still ahead of the FTSE so not too bad. Which ITs do you hold?

  4. Just 5: ALAI BRWM HDIV HFEL UKCM. Up around 6% so far, but I hold them mainly for income.

  5. Thanks for the update SG. Just to clarify for those who may not be familiar with the codes - Aberdeen Latin American Income, Blackrock World Mining, Henderson Diversified Income, Henderson Far East Income and UK Commercial Property. Good luck with those.

  6. Hi,

    I suspect you would have quite happily taken that at the start of the year? 7.5% from the PIBS and Fixed Interest caught my eye - not too many pundits would have predicted that, I suspect. Anyway, let's hope for equally smooth sailing in the second half of the year!

    1. Hi FI,

      Thanks for dropping by. Yes, the Lloyds Bank and Nat West preference shares have had a decent run with 14% and 11% return - also Skipton PIBS chipped in with 16% after some positive reevaluation.

      Hope your own blogging is going well - enjoying lots of the articles!