Bree's balancing act...

[Breelander]

At Christmas I said...

...the New Year will may well see me (reluctantly) reviewing some imbalances in my HYP. I seem to have picked up some lucky 'winners' along the way, notably ECM, which may be ripe for a top-slice. Now where to put the proceeds?

viewtopic.php?f=15&t=15389#p189126

Well, these past couple of week I finally got round to doing something about it.

This 'rabbit' had been well and truly caught in the 'Brexit' headlights - paralysed into inaction, not knowing which way to turn/run. The result was that for the past year or so dividends have been accumulating in the 'float' account to the point where it contained enough to cover two years of my planned withdrawals. One year's 'float' should be enough, so last week the surplus was added to the HYP and used to top up a few holdings. While that reduced the imbalance somewhat, it wasn't enough. This week I top-sliced Electrocomponents (ECM) and topped up some more. No new holdings were added.

I really don't plan on doing any more of this. Apart from anything else it takes hours of work adding and reconciling the changes to three different spreadsheets (historic/future dividend payments, HYPTUSS and the HYP itself) and two on-line Portfolios (DigitalLook and the backup FT.com for when DL 'dies').


Top ups were chosen by taking my HYPTUSS as the starting point, then modified by some personal feelings/opinions.

I sold a third of my ECM at 181% of the price I paid in 2011/12. Top ups were (in alphabetical order) BT.A, CNA, HFD, IMI & VOD. This is how the portfolio looked at the close on Friday 8th March (compare with how it looked at the end of 2018).

                                            Weight   Weight 
Share              Epic   Sector            by Cap.  by div.
Persimmon          PSN.L  constr&mat        6.942%   7.2%
Diageo             DGE    beverage          6.134%   2.9%
Electrocomponents  ECM    support serv.     5.472%   2.8%
Unilever           ULVR   food prod/proc    5.299%   3.7%
Reckitt Benckiser  RB.    H/hold goods      4.948%   2.9%
BAe Systems        BA.    aero/defence      4.864%   4.9%
IMI                IMI    indust. eng.      4.824%   4.3%
Lloyds 9.75% pref. LLPD   fixed int.        4.522%   6.3%
Shell              RDSB   oil&gas prod.     4.517%   6.0%
Halfords           HFD    retail gen.       4.144%   6.7%
United Utilities   UU.    util gas/water    4.094%   4.0%
Glaxo Smithkline   GSK    pharm/biotec      4.092%   4.6%
Rio Tinto          RIO.L  mining            3.828%   4.2%
Vodaphone          VOD    tel.mob           3.762%   7.8%
Aviva              AV.    ins. life         3.719%   5.7%
BT Group           BT.A   tel.fix           3.693%   5.5%
SSE plc            SSE    util.electricity  3.270%   5.7%
British Land       BLND   REITs             3.267%   3.6%
Lloyds Group       LLOY   banks             2.572%   2.7%
RSA Insurance Gp.  RSA    ins. gen          2.405%   2.0%
Centrica           CNA    util gas/water    3.325%   7.0%
Marks & Spencer    MKS    retail gen.       2.323%   3.5%
Pearson            PSON   media             2.310%   1.1%
Tesco              TSCO   retail food/drg   1.625%   0.6%
Wood Group (John)  WG.    Oil equip/serv.   1.230%   1.3%
De La Rue          DLAR   support serv.     1.214%   1.6%
Sainsbury (J)      SBRY   retail food/drg   0.950%   0.9%
Barclays           BARC   banks             0.654%   0.6%

[Arborbridge]

Topped up CNA: "very courageous, Minister, if I may say so".

Perhaps that will inspire some of the rest of us

Thanks for the update, seriously, useful to see what you are doing as one of the "truest" HYPers here. My top-ups and occasional axings have been more frequent, so I've strayed more from the brief.

Arb.

[kempiejon]

It's nice to see a bit of maintenance Bree, so thank you; are you still adding new money to your HYP or taking income?
I do some balancing in the new tax year, I'll sell unsheltered holdings for gains and add saved cash to the ISA. Also throughout the year unsheltered savings and accrued dividends can do some balancing. Unsheltered cash doesn't usually go to HYP shares though as I'd rather stay below the tax limit. I have generally resisted the temptation to trim back my biggest gains, I could have improved my income using this route when BT and the Baccy shares were at their zenith. Trouble is how do you know they'll then begin a price decline.

I remember, perhaps at the time you got your ECM, the contrast between Premier Farnell and Electrocomponents as most HYPable, I went for the former which has been taken over, probably not at 180% of my buy price.

As for your picks I hold CNA and VOD, both excluded for me Centrica is a dirty cutter and 4 years static so are on my naughty step and VOD are too thinly covered for me. I added to BT last year, IMI and HFD I'm not familiar enough with as I've not investigated.

[Breelander]

It's nice to see a bit of maintenance Bree, so thank you; are you still adding new money to your HYP or taking income?

Taking income, but as I said I have slowly built up a cash float to smooth out the 'uneven payments' other threads have talked about. That had built up to quite a substantial surplus within the ISAs, which I reinvested in the HYP. Calculating Income Units for my unitisation means that cash is regarded as 'paid away' even if it stays in the ISA, so this is counted as 'buying' new units. The top-slice of ECM provided the other half of the top up funds.

...I have generally resisted the temptation to trim back my biggest gains, I could have improved my income using this route when BT and the Baccy shares were at their zenith. Trouble is how do you know they'll then begin a price decline.

I remember, perhaps at the time you got your ECM, the contrast between Premier Farnell and Electrocomponents as most HYPable, I went for the former which has been taken over, probably not at 180% of my buy price.

Yes, at the time Farnell was the consensus HYPer's choice, but I thought ECM had a better eCommerce offering. Much debate here on TMF when I bought ECM, including one of Valuemargin's rare but valued posts. TJH put the opposing case saying " I believe that PFL still has the edge".

https://web.archive.org/web/20161111174 ... sort=whole

As for your picks I hold CNA and VOD, both excluded for me Centrica is a dirty cutter and 4 years static so are on my naughty step and VOD are too thinly covered for me. I added to BT last year, IMI and HFD I'm not familiar enough with as I've not investigated.

CNA is a bit of a gamble, I must admit. VOD a bit less so, IMHO. BT was my other rare top-slice some time back - a choice that didn't work out well in the end. I've been looking to top them up for a while now. HFD is a retailer, but something of a niche one. I have argued in the past that its business model should do well in a downturn - selling parts to hard-pressed motorists trying to keep old cars on the road that bit longer, while profiting from expensive 'bling' when times are good.

IMI are perhaps the lowest yield of my top ups, but a steady dividend payer. They are my 'sensible' choice to balance the more 'adventurous' CNA. I have Lootman to thank for first suggesting I look at the engineering sector.

[Breelander]

My top-ups and occasional axings have been more frequent, so I've strayed more from the brief.

My 'lapses from the path' have been few. I've learned from experience that my tinkering track record has been... well... 'mixed' at best So it was with some reluctance I undertook this rebalancing. But the inexorable rise of ECM's share price was hard to ignore. Normally I ignore the capital, but at some 240% of my median holding it was hard not to want to re-deploy some of those gains.

One plus point was that most of my trades were in my (ex-TD Direct) ii ISA account. Their new fee structure has 'trading credits', so the majority of my trades were 'cost-free', only paying stamp duty.

[Breelander]

Thanks to the latest HYPTUSS I have discovered I used an incorrect yield for PSN. Here is the corrected table.

                                                                                Value    Div   Fcst 
Share                           Epic    Sector                                 %Total %Total  Yield
Persimmon                       PSN     Household Goods & Home Construction      6.9%  12.7%  10.4%
Diageo                          DGE     Beverages                                6.1%   2.5%   2.3%
Electrocomponents               ECM     Support Services                         5.5%   2.7%   2.8%
Unilever                        ULVR    Food Producers                           5.3%   3.3%   3.5%
Reckitt Benckiser Group         RB      Household Goods & Home Construction      5.0%   2.5%   2.9%
BAE Systems                     BA      Aerospace & Defence                      4.9%   4.2%   4.9%
IMI                             IMI     Industrial Engineering                   4.8%   3.7%   4.3%
LLoyds Banking Group 9.75% Non  LLPD    Not Defined                              4.5%   5.2%   6.6%
Royal Dutch Shell 'B'           RDSB    Oil & Gas Producers                      4.5%   4.9%   6.1%
Halfords Group                  HFD     General Retailers                        4.1%   5.3%   7.2%
United Utilities Group          UU      Gas, Water & Multiutilities              4.1%   3.5%   4.9%
GlaxoSmithKline                 GSK     Pharmaceuticals & Biotechnology          4.1%   3.8%   5.3%
Rio Tinto                       RIO     Mining                                   3.8%   3.9%   5.8%
Vodafone Group                  VOD     Mobile Telecommunications                3.8%   6.2%   9.4%
Aviva                           AV      Life Insurance                           3.7%   5.3%   8.1%
BT Group                        BT-A    Fixed Line Telecommunications            3.7%   4.6%   7.0%
Centrica                        CNA     Gas, Water & Multiutilities              3.3%   5.5%   9.4%
SSE                             SSE     Electricity                              3.3%   3.8%   6.6%
British Land Company            BLND    Retail REITs                             3.3%   3.1%   5.3%
Lloyds Banking Group            LLOY    Banks                                    2.6%   2.5%   5.5%
RSA Insurance Group             RSA     Nonlife Insurance                        2.4%   2.4%   5.6%
Marks and Spencer Group         MKS     General Retailers                        2.3%   2.7%   6.6%
Pearson                         PSON    Media                                    2.3%   1.0%   2.5%
Tesco                           TSCO    Food & Drug Retailers                    1.6%   0.9%   3.1%
Wood Group (John)               WG      Oil Equipment, Services & Distribution   1.2%   1.1%   5.0%
De La Rue                       DLAR    Support Services                         1.2%   1.3%   6.1%
Sainsbury (J)                   SBRY    Food & Drug Retailers                    0.9%   0.8%   4.7%
Barclays                        BARC    Banks                                    0.7%   0.5%   4.6%

Running Yield:    5.66%

                                                 Value    Div
Sector                                          %Total %Total
Food & Drug Retailers                             2.6%   1.7%
Aerospace & Defence                               4.9%   4.2%
Gas, Water & Multiutilities                       7.4%   9.1%
Pharmaceuticals & Biotechnology                   4.1%   3.8%
Life Insurance                                    3.7%   5.3%
Not Defined                                       4.5%   5.2%
Media                                             2.3%   1.0%
Food Producers                                    5.3%   3.3%
General Retailers                                 6.5%   8.0%
Oil Equipment, Services & Distribution            1.2%   1.1%
Industrial Engineering                            4.8%   3.7%
Support Services                                  6.7%   4.0%
Fixed Line Telecommunications                     3.7%   4.6%
Mining                                            3.8%   3.9%
Mobile Telecommunications                         3.8%   6.2%
Retail REITs                                      3.3%   3.1%
Oil & Gas Producers                               4.5%   4.9%
Nonlife Insurance                                 2.4%   2.4%
Beverages                                         6.1%   2.5%
Banks                                             3.2%   3.0%
Household Goods & Home Construction              11.9%  15.3%
Electricity                                       3.3%   3.8%

Note: 1...'Value %Total' is the portfolio value of the share as a % of the total portfolio
      2...'Div %Total' is the expected dividend of the share based on forecast yield
                       as a % of the total portfolio expected dividend

[Wizard]

Thanks to the latest HYPTUSS I have discovered I used an incorrect yield for PSN. Here is the corrected table.

                                                                                Value    Div   Fcst 
Share                           Epic    Sector                                 %Total %Total  Yield
Persimmon                       PSN     Household Goods & Home Construction      6.9%  12.7%  10.4%
Diageo                          DGE     Beverages                                6.1%   2.5%   2.3%
Electrocomponents               ECM     Support Services                         5.5%   2.7%   2.8%
Unilever                        ULVR    Food Producers                           5.3%   3.3%   3.5%
Reckitt Benckiser Group         RB      Household Goods & Home Construction      5.0%   2.5%   2.9%
BAE Systems                     BA      Aerospace & Defence                      4.9%   4.2%   4.9%
IMI                             IMI     Industrial Engineering                   4.8%   3.7%   4.3%
LLoyds Banking Group 9.75% Non  LLPD    Not Defined                              4.5%   5.2%   6.6%
Royal Dutch Shell 'B'           RDSB    Oil & Gas Producers                      4.5%   4.9%   6.1%
Halfords Group                  HFD     General Retailers                        4.1%   5.3%   7.2%
United Utilities Group          UU      Gas, Water & Multiutilities              4.1%   3.5%   4.9%
GlaxoSmithKline                 GSK     Pharmaceuticals & Biotechnology          4.1%   3.8%   5.3%
Rio Tinto                       RIO     Mining                                   3.8%   3.9%   5.8%
Vodafone Group                  VOD     Mobile Telecommunications                3.8%   6.2%   9.4%
Aviva                           AV      Life Insurance                           3.7%   5.3%   8.1%
BT Group                        BT-A    Fixed Line Telecommunications            3.7%   4.6%   7.0%
Centrica                        CNA     Gas, Water & Multiutilities              3.3%   5.5%   9.4%
SSE                             SSE     Electricity                              3.3%   3.8%   6.6%
British Land Company            BLND    Retail REITs                             3.3%   3.1%   5.3%
Lloyds Banking Group            LLOY    Banks                                    2.6%   2.5%   5.5%
RSA Insurance Group             RSA     Nonlife Insurance                        2.4%   2.4%   5.6%
Marks and Spencer Group         MKS     General Retailers                        2.3%   2.7%   6.6%
Pearson                         PSON    Media                                    2.3%   1.0%   2.5%
Tesco                           TSCO    Food & Drug Retailers                    1.6%   0.9%   3.1%
Wood Group (John)               WG      Oil Equipment, Services & Distribution   1.2%   1.1%   5.0%
De La Rue                       DLAR    Support Services                         1.2%   1.3%   6.1%
Sainsbury (J)                   SBRY    Food & Drug Retailers                    0.9%   0.8%   4.7%
Barclays                        BARC    Banks                                    0.7%   0.5%   4.6%

Running Yield:    5.66%

                                                 Value    Div
Sector                                          %Total %Total
Food & Drug Retailers                             2.6%   1.7%
Aerospace & Defence                               4.9%   4.2%
Gas, Water & Multiutilities                       7.4%   9.1%
Pharmaceuticals & Biotechnology                   4.1%   3.8%
Life Insurance                                    3.7%   5.3%
Not Defined                                       4.5%   5.2%
Media                                             2.3%   1.0%
Food Producers                                    5.3%   3.3%
General Retailers                                 6.5%   8.0%
Oil Equipment, Services & Distribution            1.2%   1.1%
Industrial Engineering                            4.8%   3.7%
Support Services                                  6.7%   4.0%
Fixed Line Telecommunications                     3.7%   4.6%
Mining                                            3.8%   3.9%
Mobile Telecommunications                         3.8%   6.2%
Retail REITs                                      3.3%   3.1%
Oil & Gas Producers                               4.5%   4.9%
Nonlife Insurance                                 2.4%   2.4%
Beverages                                         6.1%   2.5%
Banks                                             3.2%   3.0%
Household Goods & Home Construction              11.9%  15.3%
Electricity                                       3.3%   3.8%

Note: 1...'Value %Total' is the portfolio value of the share as a % of the total portfolio
      2...'Div %Total' is the expected dividend of the share based on forecast yield
                       as a % of the total portfolio expected dividend

May I asked why LLPD is not included in the "Banks" sector?

[Arborbridge]

[
May I asked why LLPD is not included in the "Banks" sector?

In the HYPTUSS data base, it is just put in as not defined in column D. If one wanted to, one could type in a category such as "banks" - or anything one wants to invent I expect Bree had run this newer version for the first time and hadn't noticed.

Hope this helps.

Arb.

[Bouleversee]

Bree - I hope you will keep us up to date as time goes by as to what those tops did for you compared with what the dosh would have done if left in ECM.

[Breelander]

Bree - I hope you will keep us up to date as time goes by as to what those tops did for you compared with what the dosh would have done if left in ECM.

No doubt that will feature in my next Christmas review....

[Bouleversee]

Jolly good. Will look forward to that. I still can't quite bring myself to sell my winners which sometimes pays off and sometimes doesn't.

[Bouleversee]

P.S. to previous:

After my experience with CLLN and IRV, I will find it equally difficult to persuade myself to top up my losers, which include all of your top-ups, I regret to say, and which in most cases I have topped up in the past which has not paid off. Let's hope your timing is better and I get my money back which in some cases will require a lot of motoring.

[jackdaww]

Bree - I hope you will keep us up to date as time goes by as to what those tops did for you compared with what the dosh would have done if left in ECM.

No doubt that will feature in my next Christmas review....

=========================

more often please - perhaps on the HY strategies board...