The Lemon Fool

Arb's HYP 11th year can be seen here:
viewtopic.php?f=15&t=9374&hilit=Arb%27s+HYP+11th+year&start=20#p108179

12th year:

Income

Total income provided by all equity investments is 2.0x my pension drawdown (2017 1.88x, 2016 1.75x). Paying my pension from investment income continues to be my preferred option, where the alternative is an annuity. The capital mix between my three income streams is as follows: HYP:incITs:incOEICS = 6:4:1, more or less the same as 2017. I've exited some bond funds and have only one in play at present, and that's a mixture, namely IP Monthly income plus so nearly all my income mentioned is from equity income.

Income per unit

Calculated on the basis of (total income/year end number of units) in pence:

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010
6.76 | 6.15 |  6.2 | 6.27 | 5.66 | 5.75 | 5.68 | 4.88 | 3.29

Rather better news on the income front this year with a decent increase, making up for the previous couple of years' failures. Since 2010, income per unit has increased by a factor of 2, comfortably ahead of RPI, though in the past five years my increase has only been around 3.2% pa.

Capital

Here's how the capital value has changed. Values are pence per unit (income units) at the year end:

2018 |   2017 |   2016 |   2015 |   2014 |  2013 |   2012 |   2011 |   2010
120.24 | 138.65 | 140.41 | 139.19 | 137.76 | 138.5 | 117.44 | 106.66 | 110.62

You will note that the unit price fell over 13% in 2018 and is now back to 2012-2013 values.
TR as calculated by XIRR is 7.06% since Jan 1st 2010 compared with the IT basket which achieved 8.33% from May 2009.

Tinkering, portfolio changes

January: disposal of Carillion
February: disposal of Interserve
March: disposal of Marks and Spencer
June: United Business Machines were taken over by Informa. I had already trimmed UBM earlier due to good capital rises reducing the yield, now the new company, INF has a similar yield. I shall probably let it rest for a while before doing anything, since the outlook is reasonable.

Buys

Persimmon was purchased with the capital from Marks and Spencer. In addition a good number of top-ups have taken place across the board in accordance with HYPTUSS, less any I've vetoed.

Charges

The following shows how total charges have varied. This includes all account and dealing charges. The right hand column shows the number of trades each year, which has reduced after the previous two years of re-organisation. The central column shows the charges as a percentage of income generated.



Income forecast

The forecast income for 2018 was 6.4p per unit, and 6.76p was achieved.
The forecast for 2019, made on 1st December 2018 is for the range 7.1p-7.3p per unit - a yield of 5.9% on the current unit price.

Here for your interest is a chart:



This illustrates how the (raw) 12 month forecast for income from HYPTUSS has varied across the years. The noteworthy point is that income is fairly steady while the unit price varies considerably.

Conclusion

Although the capital value has slumped, I am quite sanguine about this as it was certainly on the cards. The important fact for me is that the income overall has been more than good enough to pay my pension requirements. Possibilities for changes in the next year are a sale of Pearson which has been yielding around 2% or even less for some months now. Apart from that, it's business as usual.

I will post the HYP itself in this thread, but separately.

Here is the HYP, ranked in order of the income each share provides:-

And here are the sector rankings:-



These are raw figures straight from HYPTUSS with no corrections, amendments or observations at all.
Arb.

Thank you very much for your very informative post Arb. I've been looking forward to seeing it. As you say "it's business as usual."

You're an inspiration sir!

Ian.

Hi,

Very interesting review, thank-you. I’m jealous of your rising income this year!

I notice in your sectors you have:

“Gas, Water and Multiutities”
“Multiutities” and
“Electricity”

Is this your split or simply HYPTUSS’s ? If it’s yours how did you allocate shares to each sector?

Maybe more to the point, how do you use the sector stats in running your HYP, if at all?

Thanks,

SDN

Arborbridge wrote:These are raw figures straight from HYPTUSS with no corrections, amendments or observations at all.

One observation if I may add, I make the F'cast Yield of the portfolio overall 5.88% (sum Value * F'cast Yield columns / 100), or ~1.3 * City of London IT yield (4.7%). On that measure we are equal (to 1dp at least), and several portfolios I've seen here are +2dp at most.

Thank you Arb for giving me the push to sell my shares in Pearson. I've been thinking of doing that for some time as they have cut their dividend quite severely and had the lowest yield within my HYP, and I decided I could get more income for the money elsewhere.

MDS1951 wrote:Thank you Arb for giving me the push to sell my shares in Pearson. I've been thinking of doing that for some time as they have cut their dividend quite severely and had the lowest yield within my HYP, and I decided I could get more income for the money elsewhere.

I've been waiting for the knee the stop twitching! We've had a nive rise in share price, and the only doubt about selling is whether there is more to come. It seems the rise has stalled, but I expected more. Perhaps, I shall fall back on to my old method of setting a stop loss and letting the market trade for me. This is what I did with Marks and hnow I came to ell it last year when I did. Oddly, I still miss not having Marks in the portfolio, but I didn't like the brighter future being forever round the next corner.

The yield from PSON has been below or around 2% for almost a year, so it could be time to act.

Arb.

moorfield wrote:

Arborbridge wrote:These are raw figures straight from HYPTUSS with no corrections, amendments or observations at all.

One observation if I may add, I make the F'cast Yield of the portfolio overall 5.88% (sum Value * F'cast Yield columns / 100), or ~1.3 * City of London IT yield (4.7%). On that measure we are equal (to 1dp at least), and several portfolios I've seen here are +2dp at most.

Yes, 5.88% it is, and as you say, several HYPs are similar.

Arb.

Arborbridge wrote:

MDS1951 wrote:Thank you Arb for giving me the push to sell my shares in Pearson. I've been thinking of doing that for some time as they have cut their dividend quite severely and had the lowest yield within my HYP, and I decided I could get more income for the money elsewhere.

I've been waiting for the knee the stop twitching! We've had a nive rise in share price, and the only doubt about selling is whether there is more to come. It seems the rise has stalled, but I expected more. Perhaps, I shall fall back on to my old method of setting a stop loss and letting the market trade for me. This is what I did with Marks and hnow I came to ell it last year when I did. Oddly, I still miss not having Marks in the portfolio, but I didn't like the brighter future being forever round the next corner.

The yield from PSON has been below or around 2% for almost a year, so it could be time to act.

Arb.

May be worth waiting a few days. Pearson normally issue a trading update mid-January. Based on previous years' dates, I have this pencilled in as 16 Jan this year.

Pearson are the share in my HYP which has risen the most in 2018.

I'm waiting to see how their dividends perform after the change of emphasis. The yield is low enough to justify culling.

TJH

tjh290633 wrote:Pearson are the share in my HYP which has risen the most in 2018.

I'm waiting to see how their dividends perform after the change of emphasis. The yield is low enough to justify culling.

TJH

You are like me, ambivalent

This morning, I filled in some data for the end of the year which brings up to date my "winners and losers" table as regards XIRR. I last showed this in the following post, if you want to refer to changes: viewtopic.php?f=15&t=5353&p=55446&hilit=winners+losers#p55442
Entering up the end of year values made me realise just how depressing 2018 had been for capital, with almost no bright spots. The XIRR to date is the second last column, the others are the placings in the table at the former dates given. Average placing is the last column.
The median XIRR has now dropped to 6.28%, down from the 9.9% reported in May 2017.




And here is how the top few and bottom few have changed in 2017 to 2018. Tesco still hold up the bottom, with ADM, RB and ULVR still near the top. Disappeared into the middle ground is BATS, UBM and CLLN no longer exist. Holding periods for all shares are several or many years (majority from 2010): only PNN and SRDC have short holding periods for which the XIRR is necessarily suspect. For that reason, I have not included the later purchases of WPP and PSN.


Arb.