Sunday, 2 July 2017

Half Year Personal Portfolio Review

Just time for a brief review before I settle down for my annual tennis-fest! There's not much quality live sport available on Freeview these days. I well remember the many years when life was dominated by work and earning a crust - watching the tennis was limited to the evening highlights and the finals at the weekend.

I really do appreciate now having the time to please myself. Tomorrow I will be off to explore the canals of Cheshire with a few friends.

Following on from my end of 2016 review, I have just reviewed my actual investment portfolios - sipp drawdown and ISA - for the 6m to the end of June.

The Markets

On the markets, the FTSE 100 started the year at 7,142. The index ended the 6m period at 7,312, having pulled back from a high point of 7,550 in May - a gain of  2.4% - if we factor in say 1.8% for dividends paid, this will give a figure of 4.2%  total return for the period.

Of course, the UK listed market makes up less than 10% of the global market place so focussing on just the FTSE 100 for example can give a distorted picture. The total return on world equity markets in GBP terms for the 6m to end June was 6.2%.


The portfolio of individual shares has reduced from 6 to just 2 following the sale of IMI, Berkeley Group, Amec Foster and IG Group. This leaves just Legal & General and Next which is going through a bad patch and is down 20% since the start of the year.

Fortunately I have had a good run from the other shares and the total return from this sector for the past 6 months is 11.0% which includes dividends received of 1.8% which makes it my best performing section of the portfolio so far.

Investment Trusts

With the exception of Blackrock Commodities, all trusts have provided decent gains over the half year. The better returns came from Aberforth 16%, Finsbury Growth 12%, TR Property 15% and recent addition Scottish Mortgage 16%. In recent weeks I have been gradually reducing my equity holdings and have sold Invesco Income and Dunedin Income trusts and also top-sliced others including Aberforth, Edinburgh, City of London and Finsbury. With an eye on preserving capital I added Capital Gearing to my ISA portfolio in May and have HSBC Global Strategy (cautious) on my watchlist.

Share price total return from my basket of trusts has been a very handy 8.5%.

Scottish Mortgage v Blackrock Commodities 6m to June 2017
(click to enlarge)

Index Funds

Vanguard LifeStrategy 60 is now my largest portfolio holding and, although held in check  by the rise in the value of sterling, it has risen from £164.50 to currently £169.85  - an increase of 3.2%. My UK Equity Income fund has gained 4.5% which includes a half year dividend of 2.3%

The total return for my index funds has been 4.1%.

Fixed Interest

As ever, the bonds and fixed interest sector has provided a steady and predictable income of 3.5% and a total return of 7.5% for the half-year.

My holding in Skipton BS PIBS were redeemed in April and the proceeds are currently in cash.

The Combined Portfolio

Total return for the entire portfolio of shares, investment trusts, index funds and fixed income is 7.9%  which includes income of 2.1%.  

Since the crash of 2008/09, I have had positive returns from my investments and I am hoping this will be another decent year although my expectations are not high. As I posted recently, I am expecting a downturn at some point - maybe later this year or next, I don’t really know. I have reduced my equity holding by around 25% in recent months and will hold the proceeds in cash and await developments in the market.

As ever, I would be interested to hear how others have done over the past 6 months - feel free to leave a comment if you keep track of your portfolio.


  1. "There's not much quality live sport available on Freeview these days." At least the Tour de France is still on Freeview.

    On a more serious note congratulations on that 7.9%. I'm still waiting on a couple of dividend laggards to pay up but I'm going to be closer to 2.5% (measuring from 07 Jan 17 as I only update my situation weekly). Even allowing for my cash holdings for my home purchase I'm still a long way behind your good self.

    1. Of course, ITV4 has great coverage of the Tour but although I did a bit of cycling in my younger days, it doesn't really do it for me hour after hour.

      Although now the smallest part of my portfolio, the shares have had a good run and also my investment trusts - especially Scottish Mortgage, Aberforth and TR Property (post Macron!). I expected some headwind for my Lifestrategy fund as sterling has recovered a little.

      Lets see how things pan out for the rest of the year - to be honest, I would be happy if it remains at 8%. My cash savings remain v low at just 1.15%.

  2. I got a great deal on SKY when i left them and switched to EE for my broadband, mobile(SIM only) & telephone and used NOWTV for when I wanted special sporting events. SKY then kept contacting me to come back to them and eventually they offered me a deal that was too good to pass up and I switched off NOWTV and added SKY back with all sports channels and the total package is considerably less than I was paying for SKY before!

    As to returns, yours beats mine. I clocked up 5.81%; but our portfolios are structured very differently, with my focus on Natural withdrawal strategy. It will be interesting how the 2 different portfolios perform when the market does turn-down and interest rates eventually begin to rise. Of course I'm hoping mine will outperform yours, but even if it doesn't if it still produces positive returns I will stick with the strategy as it is the one I'm most comfortable with and if it beats the market by any % I will stick with it.

    Of course 6 months is too short a time to measure performance and only a 5 year performance gives anything significant to say whether a strategy is working or not, but there are very few of us who can resist looking at shorter time periods!

    1. Gareth,

      I agree, six months is almost meaningless when it comes to comparing a portfolio and I would suggest 5 yrs is probably the min period.

      My actual returns for the past 5 full years to Dec 2016 are 58% and annualised average of 9.6% p.a. which I imagine would be fairly average for a 60/40 portfolio mix.

      Congratulations on your returns over such a lengthy period - I bet there cannot be many PIs (or professional fund managers) who can beat the market over 25 yrs. Your strategy obviously works for you so I am not surprised you stick with it!

      Well done.

  3. "I will stick with the strategy ....... and if it beats the market by any % I will stick with it". And if it doesn't beat the market, which at times it won't, then what?

    1. Thanks for comment, probably not my best wording. I believe the strategy will work as I have 25 years of investing and have beaten the market over those years. Whilst my approach has changed over the years and, changed from 2013 as I moved into drawdown, I believe that in the long term the the Natural Withdrawal approach will work and therefore I wont change it. My reference period will not be 1 year, but 5 years and I believe that the approach will lead to a growing capital base and dividend flow, which will lead to a sustainable income stream.

  4. Hi DIY, i love the posts. I'm really impressed by the performance of your pibs. What platform do you use to buy these please?

    1. Thanks!

      I have held PIBS for many years within my ISA which is with AJ Bell Youinvest. However, they were mainly to provide a solid income base to get me from early retirement through to state pension and that job is more or less done. The PIBS with Skipton were the last of my holdings and as they are now redeemed I no longer hold any.

  5. You have done well. I'm nearer RIT, a little worse actually.

    Your fixed interest return is very high at 7.5% - which investments accounted for this?

    1. The current fixed income portfolio includes Skipton PIBS (now redeemed), New City High Yield trust, City Merchants trust, iShares Corporate Bond (ex financials), and Lloyds Bank Preference shares which provided the best return with just over 11%.

  6. Hello, have been managing some unit trusts/OEICS since January 2013.

    One portfolio currently comprising Liontrust UK Smaller Cos, JP Morgan Eur Smaller Cos, Marlborough Special Sits, Newton Asian Income, Old Mutual UK Mid Cap, Rathbone Global Opps, Threadneedle European Smaller Cos has had a few changes since start of 2013 and has seen the following performance: 2013 +25.0%, 2014 +2.2%, 2015 +13.9%, 2016 +12.2%, 2017 +14.9% so far. Only the 2015 performance includes dividend payments.

    One portfolio was cashed out in 2014, but have been tracking its performance had it remained invested. Comprised First State Asia Pac Sust (now Stewart investors - have a feeling it might be closed to new money now), Artemis Global Income, Rathbone Global Opps, Threadneedle American Smaller Cos, Newton Asian Income, Marlborough UK Micro Cap. Performance 2013 +24.6%, 2014 +11.6%, 2015 +4.0%, 2016 +23.3%, 2017 +7.7% so far. Note again, this has been a virtual portfolio since mid 2014.

    I have another portfolio but it has had many movements of cash in at times and out (for property purchases), so it's difficult to pin down the actual growth.

    Anyway thought I'd share that as noted people talking about long term performance. I'm following my father's recipe - he didn't invest in bonds, didn't invest in individual shares, only ever unit trusts, OEICs & (to a much lesser extent) investment trusts, low turnover of funds, generally invested in 10-12 funds and on average switched 2 to 4 funds per year, started in the late 90's, fresh cash every year to utilise the ISA allowance, he didn't sell out of anything during the 2008/2009 crash. I do have weekly figures going back much further but all written down. It would be interesting to recap on the performance in the years before 2012. I should really have a look when I have time....

  7. Hi. One question.

    You posted in 2013:

    "Of course, at any given moment in time you can always make out the case for not investing - in the 1990s there was the global recession, the Asian financial crisis and the irrational exuberance culminating in the so called ‘dot com’ crash of 2000. In the past decade we have witnessed the terrorist attack on the World Trade Centre....
    Throughout this seeming economic and political turmoil, stable well-run companies have survived and even thrived, dividends have continued to be paid - with a few notable exceptions - and the markets, although a little more volatile at times, have continued their upward trajectory. It seems no matter what the crisis, and no matter how low the markets fall, they always bounce back"

    This seems to be at odds with your current cautionary note about currently having low expectations and reducing equity.

    How do you reconcile this changing mood and changing approach?
    (Or are you now at more of a draw-down phase rather than accumulation compared to 4 years ago which might explain the change ??)


    1. I guess one of the consequences of posting articles over several years is that at some point, I will contradict what was posted in an earlier article.

      The quote is from an article on investing for the long term and aimed at those thinking about investing for the first time. It is part of a series of articles which I consider to be my 'basics' for making a success of the process.

      I agree it is possibly a little at odds with this latest post. I guess if I were at an earlier stage I may be more willing to ride things out but at my stage of life it just feels right for me to bank some of the gains of recent years and preserve a little capital. I may rebalance my portfolio to include a higher % of cash long term or I may reinvest it back into the market at a later stage. In the meantime, the larger part of my equities remain invested.

      I like to think I am fairly consistent but accept my strategy is far from perfect but thanks for your thought-provoking question!

  8. First of all let me congratulate you on a brilliant site. I stumbled across it early this year and have been following you since as a subscriber.
    I have a similar size portfolio but am at a different stage in investing, capital growth and all dividends reinvested. In addition the fund is largely in my SIPP which is my only pension at present. As such my appetite for risk is greater and most are invested in single companies. Fund wise I have a significant weighting in invesco perpetual which has done really well (23.21% since August 2014 with dividend reinvest). The Woodford patient capital trust is up slightly since launch.
    For single company shares it is a mixed bag really, I have diversified into various sectors banking (which I believe will come back eventually), insurance has done really well, even mining is coming back as oil / petroleum. Highland gold has been the best performer up 136% since may 2015.
    However with success also comes failure and some have tanked like sports direct, Afren has gone under to name but a few.
    Overall you have a good strategy nailed. My plan is to just keep investing every month, I'm 43 now and hopefully by 57 will have 300k which will be enough.
    Really just to say thanks for all your hard work and keep it up. Your site should be at the top of the rankings for quality of content. Well done.

    1. Richard,

      Many thanks for the kind words!

      I believe at a similar stage, I also held individual shares within my SIPP and again, with mixed results. As I always stress, what matters is that you have a plan and a strategy with which you feel comfortable and therefore maintain it going for the long term.

      As I came closer to taking benefits, I moved from shares to collectives which provided more consistency and reduced volatility.

      Good luck with your investing journey and I hope you drop by with an update on progress from time to time.