To get some minor presentation points out of the way first - please don't take any but the first of them as criticism, more as suggestions of things you might like to upgrade in future reviews, and even the first is only a pretty minor criticism and mainly such a suggestion:
* It messes up various calculations a bit to include a share you no longer hold (the taken-over SKY) in the list of shareholdings. In particular, the median holding value you give is £6,421, which is the value of the 17th highest-value holding (BAE Systems) of the 33 holdings you list. But you actually only have 32 holdings, so the median should be the average of the values of the 16th and 17th highest value holdings (AstraZeneca and BAE Systems). As it happens, that average is £6,429 (well, £6,428.50, but I've rounded to whole pounds - such a calculated figure cannot be any more accurate than the inputs to its calculation), so it makes very little difference in this case - I would probably never have noticed it if I hadn't decided to count how many holdings the portfolio contained and happened to notice the Sky value of £0 as I went down the list. But it could make a more substantial difference if a portfolio experiences a burst of takeovers such as the one HYP1 encountered in 2008, with 19% (3 out of 16) of its holdings taken over during the year. (By the way, the average holding value is the holdings value £207,605 (= portfolio value £210,450 - cash £2,845) divided by the holdings count (32), giving £6,488. So (as often happens) there's little difference between what the median tells one and what the average tells one.)
The way I think it would be better done is to omit the Sky holding, removing the £83 dividends from the total, which would therefore be £9,840, and add a sentence after the table, saying "
The portfolio also received £83 dividends during the year from its holding in Sky, which has now been taken over, making a total of £9,923 dividends received in the year."
* "Div%" is a rather ambiguous heading - does it mean yield (dividends from holding as a percentage of capital value of holding) or dividend weighting (dividends from holding as a percentage of total dividends from the whole portfolio)? I did work out that it was dividend weighting, but it did need a bit of working out! And a Forward Yield column could usefully be added to the holdings table - it's available from the table of the top ten HYPTUSS top-ups, but only for those 10 holdings and not the other 22.
* A capital weighting column might usefully be added to both the list of shareholdings and the list of sectors - especially the latter, because the top-up ranking produced by HYPTUSS only takes sector weightings into account and it can be worth watching out for sector weightings become unbalanced. Or indeed, the weightings of groups of related sectors might also be an issue - your HYP is very much in borderline territory from my point of view with its total of £41,165 capital value in the financial sectors (banks, life insurance, nonlife insurance and financial services) and £1,916 dividends from them, making up 19.8% and 19.3% respectively of the portfolio totals of £207,605 capital value and £9,923 dividends.
I'll also point out that BHP Billiton has been renamed BHP Group
and been given a new EPIC, namely BHP. There's a danger that you're picking up an old price and other fundamentals for your holding if the spreadsheet you're using is using BLT to try to get them.
On to the main question. First, I completely agree with what others have said about splitting the £12,845 available across more than one purchase - spending roughly twice the median (or average) holding value on a single purchase is a recipe for an unbalanced portfolio. I would probably be thinking in round-number terms of five £2.5k top-ups, or possibly four £3k top-ups or even three £4k top-ups if it proves difficult to find enough good top-up candidates. I wouldn't be thinking in terms of two £6k purchases unless they were both new holdings, as a £6k top-up would push even your lowest value holding (IMB at £3,710) all the way up to being the highest value holding - rather too big a jump IMHO!
There is the point that a small top-up might only take the share a few places down in your top-up order, not enough to mean that the remaining small top-ups were all below it as choices - or in other words, if you were to select the top-ups one at a time, buying each before making the next selection, it would get selected more than once. I'm doubtful that would happen for Imperial Brands in your case, but certainly don't know it wouldn't. It wouldn't be too harmful if you did actually do it that way and find that Imperial Brands was selected twice - it would just mean that you paid one extra buying commission than you would if you'd known to buy a double-size top-up in the first place. But if you want to, you can select the first top-up, update the spreadsheet with the estimated number of shares you'll get, estimating that number as the amount you're spending on the top-up (or if you're a stickler for making the estimate as close as you possibly can, that amount minus a commission, then divided by 1.005 to take stamp duty into account) divided by the share price. Then repeat that for the second top-up, the third, etc, until you've selected them all. Having got them all, then do one buy for each share selected for the total amount you want to spend on it. So if you were doing five £2.5k top-ups and IMB was selected twice while three other shares were selected one each, for example, do a £5k purchase of IMB and a £2.5k purchase of each of the others. Remember to undo all the purchases of estimated numbers of shares before entering the real details, though! (Or it might be safer to make a copy of your spreadsheet, do all the purchases of estimated numbers of shares in it, then discard that copy before entering the details of the actual purchases in the original spreadsheet.) That technique can also be used for a larger number than you would normally decide on of smaller top-ups, e.g. eight £1.6k top-ups, which I would guess would very likely end up indicating at least one double-size £3.2k top-up, and possibly even a triple-size £4.8k top-up.
Secondly, two new holdings might be a possibility, and so might one new holding at £6k and two £3k top-ups. But with 32 holdings in 24 sectors, I think the need to diversify your HYP further has more-or-less vanished. IMHO that doesn't rule out adding new holdings, but it does say that the added diversification should
not be regarded as a reason for adding them. Without any added-diversification benefit and with a small extra-admin cost, I reckon new holdings need to be pretty outstanding HYP candidates to be worth adding. And while I consider both of the new holding candidates that I've thought of so far (Rio Tinto and Greene King) to be good HYP candidates, subject to 'due diligence' I haven't done for this post, I'm doubtful that that my 'due diligence' would conclude that they're sufficiently outstanding. So think of them as at most 'not particularly likely, but you might like them enough' suggestions...
Thirdly, like other posters I think the choice of Imperial Brands for the first top-up is very clear - the only caveat in that is that I basically don't invest in tobacco companies myself and so don't keep an especially vigilant eye on them! After that, it becomes a lot less clear... In your top 10 HYPTUSS top-ups, Royal Mail, SSE, United Utilities and BT all strike me as being at some risk from Labour's nationalisation threats, as are National Grid and Severn Trent. Together, those holdings account have a 16.2% of capital value weighting and a 17.7% dividend weighting in the portfolio. While I think having some of the portfolio at risk to that threat is basically unavoidable for a HYP, I wouldn't be very happy increasing the proportion all that much above those percentages and would prefer to let it dwindle a bit. Similarly, Aviva, RSA and HSBC are financials, and as mentioned above I think financials are about as highly weighted as a group as I would like. That leaves Vodafone and Marston's in the top 10, and I don't consider either of them all that good a candidate: Vodafone has distinct queries about its cash flow and debt in my mind, especially as the debt has been increasing, while Marston's is clearly worried about its debt and have said in their
trading statement a few months ago that they're concentrating their cash flow on reducing their debt - only to the point of holding the dividend so far, not cutting it, but it certainly raises the risk that they'll decide more is needed. It's the right thing for them to do IMHO, but it's not the best of signs in a share.
I should emphasise that I'm
not saying all of those shares are bad choices, just that they all have things about them that make them considerably less clear than Imperial Brands to my mind. I might well end up buying one or more of them myself, but I would want to put some serious thought into what risks I'd be least unhappy about accepting... A common situation with HYP purchases in my experience, by the way - I seldom see more than a few shares I'd be completely happy to hold in a HYP.
I can't look at the remaining roughly 2/3rds of the HYPTUSS top-up order, but a quick skim through the other 32 shares in your portfolio says that GlaxoSmithKline and DS Smith are probably the first two I would look at among them.
So no firm conclusions about what I think your purchases should be, beyond that I think they should very likely include Imperial Brands.
Gengulphus