Thursday 14 April 2016

Shares Portfolio - Sale & Update

It is just one year on since I started to put into place my revised strategy in relation to my individual shares portfolio.

Having come to the conclusion that my individual shares have been the weakest link of my income strategy to-date, I have been in the process of gradually winding down the shares portfolio and redirecting investment proceeds towards my investment trusts, ETFs and also to incorporate more low cost globally diversified index funds such as Vanguard LifeStrategy.

By the end of 2015, my portfolio had been reduced from 24 to just 9 holdings. The remaining shares consisted of BHP Billiton, Next, Unilever, Tesco, Sky, IMI, Amec Foster, Legal & General and Berkeley Group.

The portfolio was set up in January 2013 and has gained a total of £5,025 - a return of 14.0% to date which equates to an annualised average of ~4.1% p.a. The FTSE 100 stood at 5,900 at the start and is currently around 6,350 - a return of 7.6% plus dividends of around 3.8% per year.

Running an individual shares portfolio can be interesting but, as we have seen recently with Next which lost 25% of its value within a week earlier this year, individual shares can be very volatile and I have not noticed any greater return from my portfolio for the additional risk compared to my collectives - managed and passives.


Today I decided to sell my holding in Unilever which has had a good run - up around 13% year to date - and passed my target price of £32.50 - 63 shares @ £32.90 to give nett proceeds of  £2,063. I still hold quite a significant holding in Unilever via most of my investment trusts and Vanguard funds.

The proceeds have been recycled into my Vanguard LS 60 fund. These are accumulation units and therefore no income is distributed. My plan is to sell off some of the units each year to provide ‘income’.

It  may take some time before all the shares are sold however I will now draw the shares portfolio to a close as there are just 8 remaining holdings. I will therefore amalgamate this portfolio with my collectives income portfolio. There is already some overlap with the Vanguard Equity Income funds and LifeStrategy funds.

Here’s the updated portfolio

(click to enlarge)

I’m now more globally diversified - not perfect but for now - good enough. I am edging away from the rollercoaster of individual shares and entering the relative calm waters of the 60/40 Lifestrategy option. Returns on cash savings continue at record lows - the average interest currently on offer from cash ISAs has fallen from 1.5% to just 1.0%.

The average annualised return from my Vanguard LS 60 fund since inception is currently 7.6% (VLS40 is 7.1%). Over the coming few years I will be reducing my exposure to equities, therefore I am thinking of a steady 5% or 6% return on average (after inflation) with very little effort - that will do for me, slow and steady…..

I will update the combined income portfolio for end June. Take it easy..


  1. Sadly I agree and after years of trying to pick winners I intend taking the same action. When I compare my returns to that of the ftse250 I have not done well. All the effort for little reward. For some reason no one can foretell the future - some are just lucky.

    1. thinker,

      You do not give details of your returns but I believe the FTSE 250 has outperformed the FTSE 100 in recent years so you would be doing well to beat it.

      As you say, some are lucky with their selection of shares, others are well suited to the additional volatility. However, I think most people using a DIY approach are more likely to succeed with a low cost diversified index fund such as the VLS range.

      Thanks for stopping by with your comment and good luck with your new strategy!

  2. Thanks for the update, diy. I'm still trying to pick 'winners' but am already at the stage where I feel like buying a few more new stocks and then just topping up existing ones. Not sure yet. Certainly, I plan on putting more into investment trusts and ETFs - I'll see what catches my eye. Keep going with the slow and steady! :-)

  3. weenie,
    Good luck with picking 'winners' from the shares merry-go-round! I am sure it can work for some but with the likes of solid companies such as Tesco, BHP Billiton, Standard Chartered and Centrica (to name but a few) losing up to half their market value and in some cases reducing or cancelling dividends, its far from straight forward.

    I guess if it's a smaller part of a bigger picture as you have, it can be interesting and 'fun' but I suspect longer term, the better returns are most likely to come from your investment trusts and index funds.

    Good luck with it and yes, I will keep going with the slow & steady....there are many paths up the mountain.