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IanTHughes HYP – Into Year Eight

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IanTHughes
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Re: IanTHughes HYP – Into Year Eight

#251979

Postby IanTHughes » September 15th, 2019, 12:08 pm

monabri wrote:I think a comparison of holdings between May 18 and Sep 19 would yield some light on the increase in income /unit.

There has been opportunity to buy some high yielders over the last year or so. The addition of BATS/PSN/CRST/NRR at "opportune times" must surely have increased the div/unit based on the previous core holdings of things like BAE/AZN/BVIC (*). I would suggest that this strategy will amplify div/unit in the short term. Further increases in div/unit will depend on carrying on with the strategy (which I guess ITH will be doing) or obtaining dividend increases from the holdings.

Well I did say:
IanTHughes wrote:With regard to the Income generated it should be noted that as all new monies added to portfolio naturally go to the highest yielders of the day, this action alone flatters the income results year on year. This is especially the case in the early years when the extra funds also make up a significant percentage of the portfolio. All in all though, I am happy with the results so far.

I have not studied it in detail but you are right, the amplification of Dividend per Unit has been quite stark over the recent past.

Here are the details of the purchases made during the past 12 months:

Date       |  EPIC  |  Company                   |  Yield
10-Sep-18 | PSN | Persimmon | 9.90%
10-Oct-18 | PSN | Persimmon | 10.38%
12-Nov-18 | PSN | Persimmon | 9.97%
10-Jan-19 | BATS | British American Tobacco | 7.85%
11-Feb-19 | VOD | Vodafone | 9.54%
11-Mar-19 | VOD | Vodafone | 9.68%
10-Apr-19 | VOD | Vodafone | 9.46%
10-May-19 | IMB | Imperial Brands | 8.75%
10-May-19 | NRR | New River REIT | 9.22%
10-May-19 | SLA | Standard Life Aberdeen | 8.07%
10-May-19 | VOD | Vodafone | 9.62%
10-Jun-19 | IMB | Imperial Brands | 9.30%
10-Jun-19 | SLA | Standard Life Aberdeen | 7.85%
10-Jul-19 | IMB | Imperial Brands | 9.67%
10-Jul-19 | ITV | ITV | 7.24%
12-Aug-19 | ITV | ITV | 7.41%

I think I am right in saying that, so far at least, only VOD has cut the dividend, but even then my capital value increased.


Ian

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Re: IanTHughes HYP – Half Way through Year Eight

#252066

Postby moorfield » September 15th, 2019, 8:14 pm

IanTHughes wrote:And the dividend growth seems set to continue:

Image


I haven't read through the minutae of your portfolio holdings, weightings, and transactions. Quite frankly, I'm not interested, because this chart provides the pertinent snapshot of your progress and it looks fine to me. I wish we saw more like this on the portfolio reviews posted here.

As a next step, you might consider overlaying a "target income" curve on this chart and extrapolating, which provides something to measure against and encourages forward rather than backward looking thinking into ones portfolio management.

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Re: IanTHughes HYP – Into Year Eight

#252145

Postby daveh » September 16th, 2019, 10:10 am

Arborbridge wrote:Well done for the increase in income per unit of around 50%. I've just checked my comparable figure from Dec 12 ro Dec 18 and my increaseit a pathetic 16%.

Despite some people knocking your love of quite high yielders ("Chasing high yield", as some might say 8-) ), your formula does seem to work well - and you have the figures to prove it, which usually the "knockers" do not.

Would you say you have avoided the bananas skins in recent years?: maybe that accounts for the difference between us.


Arb.

For comparison for my HYPish portfolio the change in dividend per accumulation unit between Dec 12 and Dec 18 has been 80% (9.4p to 16.9p per unit) and for income units it has been 39% (6.1p-8.5p). I've not checked my performance (in capital terms) against the FTSE (perhaps I should) though last year was a particularly poor performance year for me. Over the same period accumulation units have increased (in value) by 50% (2.01-3.02) and income units by just 15% (1.29-1.48), so most of my performance is coming from reinvested dividends.

tjh290633
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Re: IanTHughes HYP – Into Year Eight

#252166

Postby tjh290633 » September 16th, 2019, 10:53 am

My experience over the past 20 years may be of interest here. I posted similar details in viewtopic.php?p=105116#p105116 but this is an updated version:

.           Ordinary               Cash Divs
Year to Divs/unit Increase Increase
05-Apr-00 11.33
05-Apr-01 11.73 3.57% 17.31%
05-Apr-02 13.02 10.95% 21.07%
05-Apr-03 12.10 -7.09% 3.54%
05-Apr-04 11.62 -3.94% 6.28%
05-Apr-05 12.07 3.89% 22.19%
05-Apr-06 13.12 8.71% 17.05%
05-Apr-07 14.04 7.00% 11.76%
05-Apr-08 24.32 73.21% 41.40%
05-Apr-09 21.17 -12.95% 19.62%
05-Apr-10 11.06 -47.75% -45.48%
05-Apr-11 16.71 51.07% 41.32%
05-Apr-12 17.46 4.44% 21.02%
05-Apr-13 19.91 14.05% 14.44%
05-Apr-14 20.47 2.81% 6.26%
05-Apr-15 21.33 4.22% 7.75%
05-Apr-16 21.67 1.61% 5.74%
05-Apr-17 24.93 15.00% 19.53%
05-Apr-18 29.24 17.32% 17.86%
05-Apr-19 29.25 0.02% 6.17%


Some explanation is necessary. I was adding capital until 2003-4, and again in 2007. Then relatively small withdrawals of dividends were made until 2015. Some more capital was added in 2016-17 and a fairly large withdrawal of dividends in 2018-19. Otherwise all dividends have been reinvested, reflected in the difference between dividends per unit and cash dividends received. These data exclude special dividends, by the way. Do remember that a 50% fall requires a 100% increase to make up the difference.

To complete the picture, here are the income unit values over the same period:

Date         Unit Value   % Change
05-Apr-00 3.32
05-Apr-01 3.29 -1.05%
05-Apr-02 3.37 2.39%
05-Apr-03 2.29 -32.00%
05-Apr-04 2.92 27.74%
05-Apr-05 3.46 18.43%
05-Apr-06 4.30 24.22%
05-Apr-07 4.91 14.17%
05-Apr-08 4.15 -15.54%
05-Apr-09 2.28 -45.02%
05-Apr-10 3.69 61.85%
05-Apr-11 4.16 12.78%
05-Apr-12 4.40 5.70%
05-Apr-13 5.27 19.81%
05-Apr-14 5.34 1.36%
05-Apr-15 5.91 10.57%
05-Apr-16 5.92 0.27%
05-Apr-17 6.62 11.72%
05-Apr-18 6.12 -7.56%
05-Apr-19 6.35 3.79%

TJH

Arborbridge
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Re: IanTHughes HYP – Into Year Eight

#252201

Postby Arborbridge » September 16th, 2019, 12:45 pm

It's not helping guys! Seeing such huge increases in income per unit makes me wonder what on earth I could be doing wrong. TJH's income has increased around 46% over six years and Ian's something similar - mine? 16%.

I'm thinking of crawling into a hole and turning the lights out :(

Arb.

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Re: IanTHughes HYP – Into Year Eight

#252206

Postby ReformedCharacter » September 16th, 2019, 1:03 pm

Arborbridge wrote:
I'm thinking of crawling into a hole and turning the lights out :(

Arb.

No, don't do that. You'd be badly missed :)

RC

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Re: IanTHughes HYP – Into Year Eight

#252217

Postby daveh » September 16th, 2019, 1:47 pm

Arborbridge wrote:It's not helping guys! Seeing such huge increases in income per unit makes me wonder what on earth I could be doing wrong. TJH's income has increased around 46% over six years and Ian's something similar - mine? 16%.

I'm thinking of crawling into a hole and turning the lights out :(

Arb.


Just a thought - are you reinvesting divis and/or adding new money? As far as I can see we (Ian, Terry and myself) are still reinvesting divis as a minimum. Now that should be controlled for by looking at increase in income per income unit, but it does mean we have been buying income over a period where income is available on the cheap so that could have skewed the gains as we've been able to buy more income for the same money in the last couple of years compared to back in 2012 (or earlier - though I think just after the financial crisis you could pick up some shares very cheaply that are now yielding very well [eg Persimmon]).

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Re: IanTHughes HYP – Into Year Eight

#252219

Postby Dod101 » September 16th, 2019, 2:01 pm

daveh wrote:
Arborbridge wrote:It's not helping guys! Seeing such huge increases in income per unit makes me wonder what on earth I could be doing wrong. TJH's income has increased around 46% over six years and Ian's something similar - mine? 16%.

I'm thinking of crawling into a hole and turning the lights out :(

Arb.


Just a thought - are you reinvesting divis and/or adding new money? As far as I can see we (Ian, Terry and myself) are still reinvesting divis as a minimum. Now that should be controlled for by looking at increase in income per income unit, but it does mean we have been buying income over a period where income is available on the cheap so that could have skewed the gains as we've been able to buy more income for the same money in the last couple of years compared to back in 2012 (or earlier - though I think just after the financial crisis you could pick up some shares very cheaply that are now yielding very well [eg Persimmon]).


I do not unitise but I thought you people that do would have accounted for that so that comparisons were accurate. Is that not the idea? If you are reinvesting the dividends you are thereby adding more units surely?

Dod

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Re: IanTHughes HYP – Into Year Eight

#252225

Postby daveh » September 16th, 2019, 3:11 pm

Dod101 wrote:[quote="daveh"}
I do not unitise but I thought you people that do would have accounted for that so that comparisons were accurate. Is that not the idea? If you are reinvesting the dividends you are thereby adding more units surely?

Dod


Yes of course (reinvesting dividends buys more income units and investing new money buys more income and accumulation units). But if yields were generally 3-4% in 2012 and are 6-8% now* you are buying twice the income per unit now than you could back in 2012 which will make the income per unit higher just due to the recent increase in yields.

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Re: IanTHughes HYP – Into Year Eight

#252229

Postby Arborbridge » September 16th, 2019, 3:38 pm

daveh wrote:
Dod101 wrote:[quote="daveh"}
I do not unitise but I thought you people that do would have accounted for that so that comparisons were accurate. Is that not the idea? If you are reinvesting the dividends you are thereby adding more units surely?

Dod


Yes of course (reinvesting dividends buys more income units and investing new money buys more income and accumulation units). But if yields were generally 3-4% in 2012 and are 6-8% now* you are buying twice the income per unit now than you could back in 2012 which will make the income per unit higher just due to the recent increase in yields.


I've been re-investing throughout the ten years of my HYP, and adding new capital when I've found it down the back of the sofa. It must be true that my investment in "new" dividends is lower now as a proportion of the total HYP that it was in the period of biggest investment growth. I'm not sure this is going to skew it enough to make such a big sifference in the past six year period we are looking at.

BTW, the 16% increase in dividends is for income units. I've never though of looking at income for accumulation units.

Dod:

Unitisation should make it that we are comparing like with like, as you say since additions of capital would create new units at the prevailing price. The only difference then is timing, nous, and good luck, one assumes. As I've noted before with regard to UK income ITs - we may be fishing in the same pond, but results differ widely.

Arb.

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Re: IanTHughes HYP – Into Year Eight

#252244

Postby daveh » September 16th, 2019, 4:15 pm

Arborbridge wrote:I've been re-investing throughout the ten years of my HYP, and adding new capital when I've found it down the back of the sofa. It must be true that my investment in "new" dividends is lower now as a proportion of the total HYP that it was in the period of biggest investment growth. I'm not sure this is going to skew it enough to make such a big sifference in the past six year period we are looking at.

BTW, the 16% increase in dividends is for income units. I've never though of looking at income for accumulation units.

.

Arb.



When I first unitised I just calculated accumulation units, as I was (and still am) reinvesting all dividends and adding new money, though the amount of new money has gone down a lot over the last three years* so I thought accumulation units were most suitable for checking out my performance. I calculated income per accumulation unit so I could be sure that the increases I was seeing in my dividend income was not just down to the new money added. When reporting my portfolio performance on here I had comments that it would be better to report income units so, as I had sufficient data to calculate them I did.


Its interesting that for me income per accumulation unit has increased so much more than income per income unit, which shows how much of my performance is due to the reinvesting of dividends, but it is nice to see I have not done too badly with my 39% increase in dividends/income unit.

Out of interest I seem to recall that you also run a separate IT income portfolio, has the increase in dividend/unit been better in the IT port than the HYP port? For information my portfolio has ~17% of its capital invested in (mostly) high yield ETFs covering non UK markets, but I don't report them separately.


* not sure why, I may be spending more, maybe saving more (or at least saving more in cash and not moving that into investments) or maybe paying more into my pension. Need to check which, but it is probably mostly the middle one as I changed my car a couple of years ago and paid for it from savings and have been rebuilding the savings for the next big purchase.

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Re: IanTHughes HYP – Into Year Eight

#252254

Postby Arborbridge » September 16th, 2019, 5:15 pm

daveh wrote:Out of interest I seem to recall that you also run a separate IT income portfolio, has the increase in dividend/unit been better in the IT port than the HYP port?



I'll PM you so as not to highjack Ian's thread any further.

Arb.


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