Saturday 23 August 2014

Shares Portfolio - August Update

It’s a wet old start to the bank holiday weekend - plus ca change - so a good opportunity to cast an eye over the individual shares portfolio.

I last updated on my shares portfolio in March. Since then I have made a few acquisitions - Booker, Berkeley, DS Smith, Hargreaves Lansdown and just yesterday, IG Group.

The portfolio has therefore expanded to a total of 23 shares and I have allocated a further £1,500 to each of the additions making a total capital input of £34,500.

Although this is demonstration income portfolio, it mirrors my own holdings in all aspects except weighting for each share. As with my investment trust holdings, I withdraw most of the income from my shares for living expenses. With this demonstration portfolio I will reinvest the income at the end of each year either into an additional holding or recycle the income generated into one of the existing shares.

Performance since the start of the year has been extremely mixed. Several shares have struggled to gain momentum since the last update in March - notably Glaxo, Diageo, IMI, Tesco and easyJet. However, there have been a few positive gainers - Unilever, Reckitt, Next and Legal & General

At the close of business yesterday, the FTSE 100 was 6775 - up 2.4% on March 2014.

The effect of the additions in recent months means it is difficult to make an accurate comparison. The only way to do this would be to unitise the portfolio. However, leaving aside these additions, there is no doubt the portfolio has lost ground since March and its a little disappointing to see the reduction in the capital value.

Having said that, the dividend income is the most important aspect for me and this continues to roll in very much as expected. Most constituents have delivered above-inflation uplifts this year, and several have increased the dividend by over 20%. The average for the whole portfolio is 12% which should make quite a difference to income by the end of the year. As the pay-out levels increase, the capital value - share prices - should follow.

Here’s the current portfolio -
(click to enlarge)

As ever, slow & steady steps…..


  1. Hi John

    Looking at my watchlist for my next HYP purchase I see Amlin as my next likely option. I see you don't hold a non-life insurer so would be interested to understand why given this sectors current strong yields and reasonable performance you're not grabbing somebody like AML, CGL or ADM (? on reasonable performance) for your shares portfolio.


    1. Hi RIT,

      I am not so au fait with the non-life insurance sector but I am sure all the companies you mention are good candidates for your portfolio.

      The one I did hold in my SIPP for a couple of yrs from early 2011 was specialist insurer Beazley which I suggest is worth adding to your list. It was one of the shares sold in mid 2012 to release the tax-free lump sum. Since then the share price has risen quite a bit further - around 250p -which makes it less attractive from a yield point of view but would certainly consider a repurchase should it fall back towards the 200p level.

      Good luck with the portfolio build.

    2. Yes Beazley already on the list. Watchlist is now quite long though at 121 shares. Ranking via forecast yield it's number 4 of the non-life's after the above 3. Haven't run any fundamentals on it as yet though.

    3. RIT, you are spoilt for choice with all those runners and riders. Be interested to hear how you go about narrowing down the shortlist and what are the criteria for your selection process - may be useful to others considering a similar portfolio - maybe the subject of a future article?

      One further thought - I have always regarded City of London trust to be the nearest proxy to a HYP portfolio - Amlin is a top 20 holding - so may be worth a look?

    4. Thanks for the tip on City of London trust holding Amlin. Looking at their 31 July 2014 fact sheet they show their top 10 holdings. Nice to see that I already own 5 of them - namely RDSB, HSBA, GSK, VOD and AZN.

      Good old Neil Woodford also hold AML albeit only his 52nd biggest holding at 0.33% so that doesn't say much.