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 21C...in 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.