Wednesday, 20 May 2015

Shares Portfolio - Update

There have been quite a few changes to the shares portfolio in recent weeks so maybe time for an update so as not to lose track of where I am up to with my revised strategy.

At the time of my last update in March I offered some thoughts on my income investment strategy and came to a decision that my individual shares portfolio was probably the weakest link. I decided therefore to reduce my reliance on this sector and I have started to sell down some of my shares portfolio. As I get older I appear to be losing a little of my appetite for all the work involved, all the time and effort it takes to research shares and run the portfolio is just not worth it.

Five shares were sold and the proceeds of  £8,875 reinvested in Vanguard UK Income fund. In April, I disposed of Diageo and Charles Stanley and acquired City Merchants Trust.

As I said in my previous post, I did/do not intend to sell off the entire holding of shares - just start to remove some of the more volatile performers and try to improve my overall income by switching out of some of the lower yielding shares. However, as someone pointed out in a recent comment, as the shares portfolio is reduced in number, it increases the exposure/risk/volatility of the remaining shares - something of a dilema to ponder.

One reason for the change of strategy was the share price volatility but another, perhaps more significant aspect of the review has been a shift from an assumption that the focus needed to be on natural yield to embracing a low-cost total return focus with the option to siphon off growth and/or income via a sale of part of my investment. This has opened up many more opportunities.

For example, I have been taking a closer look at the Vanguard LifeStrategy funds and decided these would make an excellent addition to my portfolio under the revised regime. In May, I sold off a further 3 shares and reinvested the proceeds into Vanguard LifeStratrategy 60.

More recently I have disposed of AIM-listed Plastics Capital which breached my stop-loss limit and IG Group which has had a good run returning ~30% since purchasing just 8 months previously, but which I have found very volatile in the past.

Progress Year To-Date

Since the start of 2015, on a total return basis, almost all holdings are in positive territory (including those sold). This is probably not surprising as the FTSE 100 is up above 7,000.

Indivior which is the pharma spin-off from Reckitt is up over 50% but no dividend declared yet, Sky and house builder Berkeley are up over 20%.

At the close of business today, the FTSE 100 stood at 7,007 - a gain of 6.7% on the start of year level of 6,566. Total return for the FTSE 350 year-to-date is 9.2%.

I am pleased to see that overall, the shares portfolio is quite a bit ahead over the past 5 months with a total return of 12.7% including dividends of 2.1%. 

The portfolio has slimmed down quite a bit over recent months and, for now its probably time to take stock and allow the new strategy to bed down for a while. I therefore do not anticipate many - if any - more sales.

I have not decided yet where to reinvest the proceeds of the sale of IGG and PLA so this is shown as cash in the portfolio :

(click to enlarge)
I thought it may be interesting to wind the clock back a couple of years to my first shares portfolio article from May 2013. Obviously a few changes have been made but having added a guestimate of dividends for the previous two years, the percentage returns of the ‘untinkered’ portfolio are ahead by ~10% - I never look back but regret selling those shares in Greggs!

untinkered portfolio from 2013

How is your portfolio doing lately? Leave a comment if you keep tabs…

As ever, slow & steady (untinkered) steps…..


  1. An interesting post diy investor uk. Me personally I could consider keeping the shares with a higher return on equity and selling those that that don’t meet your required figure. These higher return companies have a greater ability to evolve when their market conditions change.

    I don't monitor my portfolio that closely, but note that its dividends in April were 5% higher than in the April the previous year. It consists of Investment Trusts, UK companies with an international presence, some brewers which I love and US companies, which stand at about 30% maybe more of my portfolio.


My personal opinion of the UK is that it is slowly withering on the vine and quotes by Napoleon, such as “The British are Lions, lead by donkeys” and “If I had British soldiers and French generals, I would have conquered the world” sum up my pessimism of why this is a poor country to generate a half descent return.
 and why most of my future investments will US ones.


    Louis Gunn

    1. Louis,

      Good to hear from you and some interesting observations. I must admit, I do not monitor ROE so it may be worthwhile to have a look at this in relation to each of the remaining portfolio holdings.

      The US market has had a good run over recent years and returns are way above the longer term average so I guess there will be some reversion to mean coming into play at some point. Maybe the same will apply to the UK market which has been lagging behind?

      Thanks for stopping by and good luck with your investing.