Arb's HYP 17th year

[Arborbridge]

The 16th year can be seen here:-
viewtopic.php?p=558722

Income and Capital

Income per unit decreased by 4.86% on 2022, and is 7.3% below 2019 (pre-Covid). Recovery has faltered this year, which I did not expect (quote last year: "recovery is notably faster than after the credit crunch") and the world situation leads me to think 2024 may be no better. This is income expressed as pence per unit: my actual income from ITs+OEICs+HYP (what I call my "Three Streams") has increased by only 0.4%, despite some re-investment.
Capital price (income units) ended the year at 128.28, a decrease of 0.4% despite a small Santa rally.

Here are the incomes per unit for each year end of my HYP:-


Income since 2010 has increased faster than RPI, which would have demanded income for 2023 to be 5.47p. With a substantial rise in RPI currently ongoing, that cushion will be needed. RPI was taken as Nov 2010 to Nov 2023, as November is the latest published figure.

Here are the capital values in pence (income paid out) for each year end:-



The highest price noted was 137.51 in February 2023, but on the capital side this HYP is not functioning as well as hoped. The compound increase is only of the order of 1% a year. The fall in unit price 2022-2023 of 0.4% compares with a 0.2% fall in my IT basket.
The ratio of capital IT:HYP is now 1:1.07, compared with last year's 1:1.18. This is due to continued focus on building up the IT basket. As regards income, the ratio is 1:1.34 - that is, the HYP is still a bigger provider of income - there is a difference in forecast yield of 0.8% in favour of the HYP.

Portfolio Changes
Sales/Trimming
With little movement in capital value, it's not surprising that there was one trim, that of AZN due to yield dropping below the 2% threshold. Haleon, a runt holding spun off from GSK has a minute yield and if this continues it will be sold.
Pennon was sold completely: the company has now changed its character and no longer has its waste business which was a major attraction, though given the yield is looking good, perhaps this was too precipitate.
Vodafone was a complete sale too, an action of mine which ruffled some feathers amongst purists. Yes it was controversial but this company has always been something of a worry to me and losing Verizon did not help. Incidentally, it's interesting to note that VOD has survived in the Arb WyfHYP.
New Holding/topups No new holdings were purchased and topups were (in date order) Primary Health Care (twice); Aviva; BAT; Woodside Energy Group;Abdrn; D S Smith. 7 buy actions as opposed to 11 last year.
The new purchases amount to 2.3% of the HYP value, whereas sales amounted to 3.9%. 23 steps forward and 39 back!
For convenience this is calculated on the end of year value.

The following shows how charges have varied, including dealing and annual broker charges:-



Income Forecast

The forecast made in December 2022 for this year was 7.04p per unit. At the time the comment was "that is a decrease. Let's hope that is not the eventual out-turn". Well, it was slightly worse than forecast on this occasion as the total for the year was 6.85 per per unit - however, that is less than 3% variance, so I think that is very creditable. Looked at over the years, the HYPTUSS gives quite a reasonable look ahead at what one might expect for income, in my view.
The forecast income to December 2024 made in December 2023 stands at 6.85p - unchanged on this year. Yes, I know this doesn't look right - to be exactly the same! - but anything is possible and this is what HYPTUSS is saying. Incidentally, that was a yield of 5.45% as prices stood, mid December.

As regards my "retirement system": HYP is still a major provider and together with OEICS and ITs provides an excess of income required by a good margin. Last year my self provided "pension" was 47% of dividends received, i.e. a satefy margin of over 50%.
Later I will post the HYP table for anyone interested, but in the meantime I wish you all a prosperous 2024.

Arb.

[SPURLEY]

Hello , yes can I see your HYP Table .Please when you have time . Robert

[Arborbridge]

Here is the annual look at my total HYP list - now 37 shares - in capital weight order:



Yields are straight from HYPTUSS with no corrections. Note Haleon is well underpowered and may be another share for the chop: there's no point in having a very small holding, so one should back it by buying more, or sack it. Or perhaps just hang on if I feel so inclined

A glance down the relevant column shows us that around 25% of my income comes from six shares (in order): LGEN,CSN,BAT,HSBC,IMB and ABDN. Entirely weighted towards financials and tobacco - not ideal and something which might be worth addressing. The problem here is that financial shares are often uppermost in the topup ranking: perpetual bargains? The difficulty is that there aren't too many shares with similar yields with which to address this "defect" - if that is what it is.

And here is a look at the current state of what I call The Good, Bad and the Uggerly:-



These are the shares held for three years or more in order of total return as determined by XIRR. This is one factor sometimes looked at when thinking about topping up or selling.

Although HYPers are not specifically looking for high TR, it is nevertheless a way of considering the ultimate success of a holding. As some point out, a share which is continually declining in value as much as it is paying out, will ultimately disappoint its owner.

In that regard, it should be noted that this XIRR for my HYP since 2009 is 5.6% pa - scarcely more than it is yielding. The same mesaurement for my IT basket is 7.53% pa. This is one reason I continue to put cash into ITs preferentially.

Arb.