Monday 1 July 2019

Half Year Portfolio Update

I normally post a review of my portfolio at the end of each year. However, as there have been quite a few changes to my portfolio over recent months, I decided to post a short interim review covering the past 6 months.

On the political front, Mrs. May has been unable to get her Brexit deal through the Commons after 3 attempts and decided to step down so we will shortly have a new PM - Boris Johnson or Foreign Secretary Jeremy Hunt.

Despite the assurances, I'm not sure either will get much further in delivering Brexit given the numbers in our 'remain' parliament have not changed...but maybe, just maybe!  We had a referendum - a binary choice of leave or remain - and the nation decided to leave the EU. In my opinion, the way to move forward is for our politicians and senior civil servants to embrace the concept of democracy, accept and respect the outcome and implement the result - or at least stop trying to frustrate the efforts of others. It's really not so complicated. 

Surely this has to be resolved one way or the other before the end of this year.
Climate Change

On a more positive note, there has been huge progress on climate with the government committing to net zero carbon emissions by 2050 as recommended by a report from the Climate Change Committee. I look forward to the policies being developed to implement this legislation which will have a big impact on every aspect of out lifestyle and economy.

In the past week we have seen record temperatures of 45C in France so these changes cannot come soon enough if we are to avoid some of the worst predictions of the scientific community. Earlier in the year we had record temperatures of February. 

However, the UK is responsible for just under 2% of global CO2 emissions so however quickly we decarbonise our economy, we are still depending on the rest of the world to make a similar commitment. For example China is responsible for around 30% of GHG emissions and the US around 15%.

As I said in a previous post, if I become aware of a threat I have a responsibility to do something. Last year, I decided to make some adjustments to my portfolio to divest from fossil fuels and bring on board more ethical/green funds which I believe are attempting to address some of the big issues raised by climate change. In May, I posted my thoughts on this subject.

Portfolio Returns

Markets generally have recovered from the sharp downturn at the end of 2018.

I have just updated my spreadsheet with the returns including dividends of my actual investment portfolios - sipp flexi drawdown and ISAs - for the 6 months to 28th June.

The FTSE 100 started 2019 at 6,734 - and has gradually recovered the ground lost towards the end of last year and has reached 7,425 a gain of 10.2% - if we add back in say a further 2.0% for dividends paid, this will give a ballpark total return figure of 12.2% for the past half year.

My Vanguard Lifestrategy 40 fund is a diverse mix of global equities and bonds and provide a good benchmark for a cautious/balanced global portfolio. The fund is up 9.0% over the year to date.
Investment Trusts & Funds

Over the 6 month period I have sold City Of London, Smithson and luckily Woodford Patient Capital. I have also disposed of my largest single holding, Vanguard Lifestrategy 60 due to its overweight 15% allocation to the FTSE All Share.

With the proceeds and a top up to my ISA for the new tax year, I have added several more 'green' funds - Lyxor Green Bond, Vanguard SRI Global, TRIG, FP WHEB Sustainability, a top up to my BG Positive Change fund, Greencoat UK Wind, and a sizable position in Orsted. I have recently added a new 'green' page to my blog which includes a visual chart of the holdings.

The better returns for the period came from Edinburgh Worldwide +30% (but now sold), Mid Wynd 22%, Polar Capital 20%, TR Property 17%, Tritax Big Box 18%, Scottish Mortgage 15% and Finsbury Growth & Income up 21%.

The total return for my basket of trusts over the half year was 16.0%.

Index Funds

As mentioned earlier, my VLS 60 is now sold. Over the past half year I have added to my VLS 40 also HSBC Global Strategy. The best performance was delivered by Baillie Gifford Managed Fund with 17% return for the 6 months.

The contribution from my index collectives has been positive in line with global markets generally with a total return of 12.8%.

Green Funds

Again all are showing a positive return for the period notwithstanding that most have not had a full 6 months in my portfolio. The better returns have come from Impax Env. Markets up 24%, largest holding TRIG 11%, iShares Clean Energy 12% and Vanguard SRI 9%. I am pleased to see good progress on Orsted (second largest holding) which I purchased in April at 500 DKK and is currently up 13% at 568 DKK.

The total return including dividends for my green allocation which currently makes up 46% of the total portfolio is 9.8%.

(click to enlarge)

The Complete Basket

As a whole, the portfolio has delivered a total return of 13.0% over the past 6 months.

I was a little apprehensive moving my portfolio towards more sustainable funds but the performance so far has given me more confidence to add to this sector when opportunities arise. I certainly feel much better investing in the likes of Orsted, a global leader in offshore wind, rather than funds with a high weighting to big oil companies. 

So, a feel-good factor + decent returns from ethical investing, what's not to like?

As always, if you keep track of portfolio returns, feel free to leave a comment and share with others how your investments have fared over recent months.


  1. Ciao DIY,
    Great numbers I see there! Very good job as usual. I also like the "green" change, I agree that change only happens when people start acting, not just "talking" about something. I haven't been very active on the UK front of my portfolio, I still have CTY and EDIN but it seems to me that until Brexit is finally over and done with we won't have a clear picture on the economy/markets in the UK. All in all, due to the weak pound and poor choices, it's my beloved Albion who's letting me down (total return wise) :)
    Ciao ciao and keep it up!

    1. Hello Stal,

      Good to hear from you. Have you had the heatwave in Florence similar to 40C+ temperatures in France over the past week?

      Yes I agree, actions usually speak louder than words - I guess we all have to do what we can to prevent the worst case scenario.

      I am sorry to hear the UK element of your portfolio is underperforming but I think this has been the case for quite some time - maybe the past decade - but reversion to mean?

      Good luck and hope you are getting a little more sleep these days!

    2. Oh well the heatwave is currently striking quite hard, temperatures are pretty high for July, but I guess that in Pizzaland we are used to high temperatures (in August) so we are managing... UK shares have been doing pretty badly but that's probably because I became fully invested right before Brexit! That killed the exchange rate to start with, among other things. But I am confident that I can stir that boat away from the "red" sooner or later... Important point is that the stocks have been paying dividends, to my portfolio that's the most important metric.
      Speak soon and ciao!

  2. Really impressed that you have managed to move nearly half your portfolio into greener holdings in such a short space of time. My own portfolio shifts are much more sedate unfortunately.

    I would like to add a little more BSIF and other similar funds but the premiums are holding me back somewhat at the moment. And I wish I had looked at Impax more closely last year!

    1. Thanks IT,

      I think it was reading one of your BSIF posts last year that triggered my reevaluation of the renewable infrastructure sector, since when I have added several more. At the start of this year my plan was to move more gradually towards green funds but after reading The Uninhabitable Earth and being inspired by the efforts of Greta Thunberg and the young people school striking for climate, I realised with more clarity that the investments we choose to hold in our portfolios and pensions have a crucial role to play in the transition.

      Divesting oil majors will send a stark message to the boardrooms that they cannot continue with business as usual.

  3. Congratulations on a great 6 months!
    I've had a similar performance and am quite happy.

    Sound words on the Brexit problem too!

    1. Cheers steveal. The markets have been rewarding over recent months, so depending on asset mix, I guess most investors will have achieved 10%+ total return. Lets see how the rest of the year unfolds...Brexit too!

  4. do you every work out how much CO2 you are offsetting/green energy you are producing through your assets?

    1. That's an interesting proposition GFF, but I'm not sure how to go about it! The nearest I have got to something like this is working out my personal carbon footprint via the WWF site

      My score came out lower than the average for UK but a little above the global average - gas central heating and car driver so more work to do!

  5. Great to see how you're incorporating these green funds into your wider portfolio. I recently added Impax Env Markets & WHEB Sustainability fund into my SIPP portfolio, although for now they only represent 25%.

    1. Thanks Mindy and good luck with your recent additions - both have done well for me over recent months but I would like to see more weighting towards renewable energy in their respective portfolios. For example neither holds Orsted which is the world leader in offshore wind - that's one of the reasons I added it to my portfolio as a stand alone. Hopefully this will be changing over the coming months.

      I am sure ethical/impact investing for a more sustainable world will become mainstream very quickly and these funds will become more popular - fingers crossed!

  6. Just looked at FP WHEB Sustainability fund, wow that's expensive. An OCF of 1.73%, this must be actively managed?

    Morningstar: "Based on investing £10,000 in this fund over a 5 years period with an expected return of 5%. The investment would be worth £11,605.07 and Total fees would be £1,027.45"