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HYP1 is 17 - comments not permitted on HYP Practical

General discussions about equity high-yield income strategies
Wizard
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HYP1 is 17 - comments not permitted on HYP Practical

#95702

Postby Wizard » November 14th, 2017, 6:32 pm

For me much of the benefit of the long period HYP1 has been running is to see how it has performed versus other options. However, PYAD chose to post the 17 year update on HYP Practical and as I we are not permitted to discuss the merits of HYP on that Board I presume there is no choice but to replicate the thread for a slightly different discussion here.

pyad wrote:A record smashing year.

Here is the data for the year ended 12 November 2017, the seventeenth year of this non-tinker portfolio.

........................................Dividends.....................Value
Anglo American              176.94              7,101
BA Tobacco 1,506.80 42,356
BT Group 875.03 14,080
Dixons Carphone 139.61 1,894
InterCon Hotels 328.94 18,541
Ladbrokes Coral 104.96 3,587
Land Sex 284.43 6,321
Lloyds 156.05 4,107
Mitch & But 51.83 1,848
Persimmon 1,426.95 28,275
Pearson 347.49 6,161
RD Shell B 584.86 9,628
Rio Tinto 949.68 19,046
RSA 83.95 2,905
United Utilities 309.41 6,635

Total £ 7,326.93 172,485

Cost 75,000

Gain 97,485 130.0%

FTSE100 at start 6,274.8

Now 7,433.0

Gain 1,158.2 18.5%

HYP1 capital outperformance 94.1%





Dividend History
2001 3,451
2002 3,474
2003 3,197
2004 3,205
2005 3,546
2006 4,131
2007 4,452
2008 5,040
2009 3,187
2010 3,297
2011 3,843
2012 4,289
2013 5,828
2014 5,601
2015 6,093
2016 6,124
2017 7,327

Total to date £ 76,085



Events in year
There were returns of cash following share consolidations by InterContinental Hotels and Land Securities. In both cases the cash was reinvested in Lloyds being the optimum choice at the time based on a combination of good yield, greatest below average capital value and other selection criteria I use.

Income
This is what HYPs are all about and the £7,327 for this year was another record by a long way, up 19.6% on last year and therefore crushing inflation. From year one, the increase is 112.3%.

Total income thus far is £76,085 over the 17 years, averaging £4,476 per year which is 5.97% pa on the £75,000 cost. An interesting milestone is that this total income has now exceeded the original investment.

BA Tobacco remains, as it has for years, the single largest income contributor with 20.6% of total income but Persimmon is not far behind in contributing 19.5% followed by Rio Tinto third at 13.0%. At the other end, the smallest sums arose from Mitchells & Butlers on 0.7%, RSA 1.1% and Ladbrokes Coral 1.4%.

There were no zero payers.


Capital
This is irrelevant or secondary depending on your viewpoint.

As shown a new record value of £172,485 has slaughtered the FTSE100 over the 16 years, up 130.0% against an index up 18.5% and thus outperforming it by 94.1%. This is without reinvesting dividends.

In the last twelve months the FTSE100 index has risen 10.4% whilst HYP1 is up 12.2%, outperforming this year as it has so often in the past.

BA Tobacco remains the largest holding at 24.6% of portfolio value with Persimmon second at 16.4%. Smallest holdings are Mitchells & Butler at 1.1% and Dixons Carphone also at 1.1%.

Comparison with CTY
As CTY is often mentioned as an IT that overlaps many of the selections frequently help in HYPs I thought it would be interesting to see how it compares to HYP1 over the same period from 2001 to 2017. To do some parts of the comparison I took the £75k invested in HYP1 and instead assumed it was invested in CTY on the same day, on that day CTY closed at 228p, so the £75k would have bought 32,894.74 units of CTY.

Income
PYAD quotes an increase in dividends over the period of 112%, over the same period CTY has increased its pay out by 123%. Both of these look to have significantly outpaced inflation, the RPI index over the first 16 years of the period increased by only about 54%. The level of payout from CTY was lower than HYP1, both at the start and remained so at the end of the period. In year 1 the units of CTY would have paid out £2,467.11 and in 2017 it would have paid £5,493.42. Over the 17 year period CTY would have paid out £65,986.84, some £10,098.16 less than HYP.
However, the income profile for HYP1 has been much more volatile than CTY. CTY has increased its pay out every year during the period examined, whereas HYP saw three years when the pay out was reduced versus the previous year. In 2003 there was a reduction of 8.0% and only in 2005 did the pay out overtake that of 2002; in 2009 HYP1's pay out was 36.8% lower than 2008 and it took until 2013 to get back above the 2008 level of pay out. In 2014 there was a small reduction of 3.9% and in 2015 this reduction was more than reversed. HYP1 has also had some spectacular year-on-year increases in pay out, most notably: 2006 with 16.5%; 2011 with 16.6%; 2013 with 35.9% and 2017 with 19.6%. Each of these four years had an increase in pay out of more than the highest year-on-year increase from CTY which was 12.6% in 2008.
So I would conclude that HYP started with a higher return on the capital invested, but with the higher growth rate CTY has slowly been pegging that back. But with an overall deficit of more than £10k it will take CTY a long time to overall HYP1 in total pay out if history repeats itself. However, to enjoy that higher overall income an investor would have had to be able to accept significant reductions in income in some years, if they had needed to sell some of HYP1 in the lean years to maintain living standards the results would be different.

Capital
HYP1 has increased its value by 130%, this is a significantly better return than that provided by CTY which increased by £86% over the same period.

Other thoughts
As others have said on the HYP Practical thread, the performance of HYP1 seems to have been reliant on a small number of very high performers. It does seem therefore that as of the 17th birthday a holder of HYP1 is in a somewhat risky position. If BAT or Persimmon were to hit a problem and cut or even suspend their dividends next year it is likely that the holder would see another year where overall income would fall versus 2017. Had the portfolio been tinkered with over time and / or balanced with some investments in ITs or other collectives then this risk is likely to have been mitigated, but of course it is impossible to say what impact this would have had on performance in terms of income and / or capital.

For me after 17 years what HYP1 makes clear is that the original concept is a high risk one and unsurprisingly with a high risk approach income from HYP1 is volatile. Whether the level of returns make this level of risk acceptable is of course for the individual holder to decide. But if I were asked by a relative with a lump sum to invest, who had little knowledge of and / or interest in investment matters, and they were going to rely on the income to some extent, I don't think that I would suggest they go down the HYP1 route.

Terry.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95708

Postby Lootman » November 14th, 2017, 6:48 pm

"the income profile for HYP1 has been much more volatile than CTY. CTY has increased its pay out every year during the period examined, whereas HYP saw three years when the pay out was reduced versus the previous year."

HYP1 pays out 100% of its dividends and CTY will typically choose to pay out 85%, thereby enabling it to ride out those bumps in a way that HYP1 did not.

Put another way, CTY does cash management for you, and provides a reserve as a cushion or buffer. With HYP1 you have to do that yourself, and Pyad's numbers rather conveniently ignore the drag that such safety measures place on your returns.

Another thing to bear in mind is that HYP1 has had a lot of corporate actions which require research, decisions and work, and which can lead to compulsory tax events, like CGT for a cash takeover. CTY will handle corporate actions on its constituent holdings without any effort on the part of the investor, and there is no CGT issue until you sell CTY shares. CTY itself has had no corporate actions that I am aware of.

Finally, CTY is much more diversified, and therefore inevitably will hug indices like the FTSE-350 more closely. HYP1 will be all over the place with only 15 holdings with wildly different weightings. When markets are good, as they have been for the last couple of decades, the results will flatter any vehicle that takes on more risk. Its numbers in a downturn might be ugly.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95720

Postby monabri » November 14th, 2017, 7:18 pm

Terry,
Thanks for posting on the " other HYP " board! and for your analysis ( excellent bit of work..v interesting).

One has to ask oneself, is the extra dividends/capital worth 17 years of possible risks of CLLN, Irv, PFG ?

I'm considering using HYP Divis to slowly invest in CTY and ( to a lesser extent) other ITs. CTY seems a lot more boring and boring is good!

HYP requires strong nerves and to expect the unexpected!

I also think that HYP1 " got lucky" with BATS ( a 9 bagger) and Persimmon regarding capital values.

I know it was a no tinker p/f but how many here would not have top sliced BATs years ago ( several timescale perhaps) ?

monabri

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95722

Postby Itsallaguess » November 14th, 2017, 7:26 pm

Wizard wrote:
For me after 17 years what HYP1 makes clear is that the original concept is a high risk one and unsurprisingly with a high risk approach income from HYP1 is volatile.

Whether the level of returns make this level of risk acceptable is of course for the individual holder to decide.


When I see the HYP1 yearly updates, I always struggle with the very clear lack of portfolio diversification, both in income and capital terms, and the very real issues regarding the historic lumpiness of the dividend income.

If only there were cheap income-related investment vehicles that could remove both of those issues in one fell swoop....

Cheers,

Itsallaguess

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95724

Postby Lootman » November 14th, 2017, 7:43 pm

Wizard wrote: PYAD chose to post the 17 year update on HYP Practical and as I we are not permitted to discuss the merits of HYP on that Board I presume there is no choice but to replicate the thread for a slightly different discussion here.

If Pyad chose to give a dispassionate "just the facts, ma'am" account of the portfolio, then it's appropriate not to criticise it on the other board.

But this is his own baby and when he uses terms like "record-breaking", "slaughtered" and "crushed" to describe (what he claims is) his outperformance over alternative strategies, then I think it's fair enough that criticism be made on that thread, and I'd like to think the moderators would agree with me there.

Also note that (as far as I know) Pyad earns an income from flogging a tip sheet about HYP, and so the use of such gushing and glowing descriptions of his method comes close to self-marketing. I know that MuntoMan is held to very strict rules about promoting his eponymous fund here, and I find myself wondering why that same standard apparently doesn't apply to Pyad.

The guy has some decent ideas but the shameless self-promotion and arrogant dismissal of other alternatives is a tad galling. I fear he doth self-aggrandise too much.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95730

Postby Dod101 » November 14th, 2017, 8:00 pm

monabri wrote:I also think that HYP1 " got lucky" with BATS ( a 9 bagger) and Persimmon regarding capital values.
ars ago ( several timescale perhaps) ?

monabri


How do you know that BATs is a 9 bagger? pyad has told us it was not in the original selection but has not told us as far as I know when it was added to HYP1.It was almost certainly a good choice whenever it was bought.

As for Terry's conclusion that a HYP is a high risk strategy I think that only holds if you follow pyad's flawed 'rules' such as no tinkering unless it is forced upon you. Lootman has highlighted the flaws in your comparison with City of London IT, but nevertheless, in that ITs are nearly all reducing their charges and they are doing most of what we ought to be doing with our HYP, such as holding back some income and actually managing the portfolio, I think they are the way to go in our dotage and at any time they make a useful supplement to our HYP. That is what I have been doing for some time and I think it is necessary with a small concentrated HYP such as mine, with only about 17/18 (non IT) shares.

Dod

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95762

Postby Wizard » November 14th, 2017, 10:28 pm

From the thread on HYP Practical, responded to here as it is not permitted to mention ITs on HYP Practical.

CryptoPlankton wrote:Hi Terry

I suppose it depends what you mean by "awfully big". I am expecting to take 80% of my annual dividends as income at the end of each year, increasing it proportionally in years of improving total portfolio income and freezing it in years where the total portfolio income drops. I will start with a cash reserve equal to half the first year's income. The unused 20% will be either reinvested or added to the reserve, depending on how I assess the adequacy of the reserve each year (I would aim to maintain at least the equivalent of half the last year's income and probably a little more).

I think you will find that this strategy would cope comfortably with the volatility in income produced by HYP1. The blip in 2003 (-£222) would have hardly made a dent in the previous year's surplus, let alone the starting reserve of £1380. In 2008, income of £4032 (80% of 5040) would have been withdrawn. Continuing to withdraw £4032 in each of the next three years (before the portfolio income again exceeded that figure) would have meant drawing on a total of £1769 from reserves. The minimum reserve at the end of 2008 would have been £2520 (half of that year's portfolio income) so the shortfall would have been comfortably covered. There would also have been £3000 or so (I haven't calculated it) more from the cumulative unspent income from previous years either added to this or generating more income (thereby reducing the shortfall).

If it was my sole source of income I would probably tweak this a bit more on the side of caution but, in any event, I don't think it takes that much to be prepared for the "shocks". Whether I would be happy to live off an "untinkered" HYP1 is another matter!

A fair point CryptoPlankton, so as I still had the spreadsheet on my desktop where I looked at this I ran the numbers.

You are absolutely correct that the income reserve can deal with all the 'shocks' in HYP1 based on the approach you outlined. There are some periods of flat income, but no declines. There is a somewhat 'spooky' coincidence when I run the numbers, taking account of the approach you outlined the 'drawn' income from HYP1 is within about £60 of the CTY investment. But, to be completely fair if there is a starting buffer of half year one's income for HYP1 I wonder if this should be added to the pot invested in CTY, in that case the income from CTY over the period exceeds that drawn from HYP1 by a little over £1,500. So in short, taking HYP1 and making it behave like CTY means you end up with an income basically the same as that of CTY. Of course with HYP1 there is still a buffer (about £11,900), but that cannot be released as it needs to be retained in case of future shocks.

Terry.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95851

Postby tjh290633 » November 15th, 2017, 10:08 am

The reason that BATS appears to be a 9-bagger is that all the proceeds from the takeover of (probably) Gallagher were ploughed into it. The same happened when ABP was taken over, but I don't remember the replacement share.

I have commented on this on the other thread and see no reason why Wizard felt the need to start a new topic on this forum.

TJH

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95907

Postby Wizard » November 15th, 2017, 12:38 pm

Response to point on HYP Practical where mention of an IT is prohibited.

Arborbridge wrote:We all have different POVs, but I'd say a current yield of 4.2% for relatively little work would improve the lot of many a Doris or Joe whose alternative might be to grumble about low interest rates or lousy annuity rates.

Or, as discussed above they could have put it all in to CTY. Allowing for the self management of a buffer the result from CTY would have been equal or slightly more income, less concentration risk at the end and even less work required. But of course the capital return on CTY would have been much less.

Terry.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95912

Postby StepOne » November 15th, 2017, 12:55 pm

I think this is a better place for general discussion of HYP1, so I'm replying on here.

Just wanted to say a couple of things.

Looking at HYP1 income it looks to me as if a 10% safety margin (i.e. taking 90% of the starting year income) would have allowed you to increase that income by 3.4% each year without eating into your buffer (which would stand at about 6,000 currently).

Secondly, the point of HYP1 was to be a better option than an annuity. So does anyone know what annuity rates were in 2001, for a 100% joint life policy and 3% escalation? Google has not found this for me.

StepOne

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95919

Postby Wizard » November 15th, 2017, 1:17 pm

tjh290633 wrote:I have commented on this on the other thread and see no reason why Wizard felt the need to start a new topic on this forum.

Because I wanted to compare HYP1 to CTY and it has been made clear on a number of occassions by moderators that such comparisons and reference to ITs is not welcome on the HYP Practical board. Are you saying that my understanding on that is incorrect?

Terry.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95928

Postby Arborbridge » November 15th, 2017, 1:37 pm

Wizard wrote:Response to point on HYP Practical where mention of an IT is prohibited.

Arborbridge wrote:We all have different POVs, but I'd say a current yield of 4.2% for relatively little work would improve the lot of many a Doris or Joe whose alternative might be to grumble about low interest rates or lousy annuity rates.

Or, as discussed above they could have put it all in to CTY. Allowing for the self management of a buffer the result from CTY would have been equal or slightly more income, less concentration risk at the end and even less work required. But of course the capital return on CTY would have been much less.

Terry.



Yes - all agreed.
For most of us here, it won't be "either or" fortunately. We can do a little of each. But if I were advising in an widow and orphan situation, CTY and a couple of others would be on top of the short list. For HYP, one has to have a fair degree of motivation and knowledge so it isn't for the unknowledgable: it more for those who have tried other methods and failed!

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95929

Postby Arborbridge » November 15th, 2017, 1:41 pm

Wizard wrote:
tjh290633 wrote:I have commented on this on the other thread and see no reason why Wizard felt the need to start a new topic on this forum.

Because I wanted to compare HYP1 to CTY and it has been made clear on a number of occassions by moderators that such comparisons and reference to ITs is not welcome on the HYP Practical board. Are you saying that my understanding on that is incorrect?

Terry.


Well, I got a split decision about this the other week! I think the concensus was that showing comparisons is OK, but what isn't OK is the extended discussion which is likely to result. The hot water I got into was in displaying a comparison, but at the same time trying to inhibit discussion: I was pulled up for trying to face two ways at once, with some justification!

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95933

Postby Raptor » November 15th, 2017, 1:59 pm

Arborbridge wrote:
Wizard wrote:
tjh290633 wrote:I have commented on this on the other thread and see no reason why Wizard felt the need to start a new topic on this forum.

Because I wanted to compare HYP1 to CTY and it has been made clear on a number of occassions by moderators that such comparisons and reference to ITs is not welcome on the HYP Practical board. Are you saying that my understanding on that is incorrect?

Terry.


Well, I got a split decision about this the other week! I think the concensus was that showing comparisons is OK, but what isn't OK is the extended i believe the discussion which is likely to result. The hot water I got into was in displaying a comparison, but at the same time trying to inhibit discussion: I was pulled up for trying to face two ways at once, with some justification!


I believe that there was no problem with your comparison, as we have to compare our HYP's with something and if that is your IT portfolio then that is fine. The problem was that posters then started to go along the lines of what was best, even though you tried to restrict it. So the comparison was ok it was the follow on that "broke" the rules.

Wasn't there more disagreements with poster rather than mods. I remember supporting your comparison at the time, both as a poster and a mod.

Saying something along the lines that if you compare HYP1 with CTY over the same 17 years is fine, but then discussing whether investing in IT's would have been better is for here. If I remember that was a peoblem on TMF as well.

Raptor.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95953

Postby Wizard » November 15th, 2017, 3:08 pm

I was hoping that the comparison would result in some discussion of the merits of HYP over CTY or other ITs, so think this was probably the right place.

Terry.
Last edited by tjh290633 on November 15th, 2017, 6:29 pm, edited 1 time in total.
Reason: Typo corrceted - TJH

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95959

Postby Lootman » November 15th, 2017, 3:31 pm

Raptor wrote:Saying something along the lines that if you compare HYP1 with CTY over the same 17 years is fine, but then discussing whether investing in IT's would have been better is for here. If I remember that was a problem on TMF as well.

Care is needed. We don't want a situation where it's OK to say that HYP1 is better than an IT on the other board, but not that an IT is better than HYP1. And Pyad comes pretty close to claiming that when he talks about his returns "crushing" or "slaughtering" other approaches.

If such comparative and superlative statements are not allowed on the other board then that has to cut both ways. Personally I would have moderated the hyperbole in Pyad's OP, and just left the facts and figures.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#95970

Postby Raptor » November 15th, 2017, 4:01 pm

Lootman wrote:
Raptor wrote:Saying something along the lines that if you compare HYP1 with CTY over the same 17 years is fine, but then discussing whether investing in IT's would have been better is for here. If I remember that was a problem on TMF as well.

Care is needed. We don't want a situation where it's OK to say that HYP1 is better than an IT on the other board, but not that an IT is better than HYP1. And Pyad comes pretty close to claiming that when he talks about his returns "crushing" or "slaughtering" other approaches.

If such comparative and superlative statements are not allowed on the other board then that has to cut both ways. Personally I would have moderated the hyperbole in Pyad's OP, and just left the facts and figures.


I think either is fine as a statement because you are comparing 2 entities. What you are not saying is that an IT strategy is better than a HYP strategy. For instance my IT portfolio has almost matched my HYP over the same period for yield but on capital the ITs have trounced the HYP (no wonder with AMEC, CLLN and Tesco :lol: ) I am not saying HYP is "dead, long live ITs". HYP works for me and has been good on income, beats what I was expecting, but "capital" has not been good this last few years. It was easier during my building phase to "balance" the portfolio and the last few years has seen me make major changes to what I hold. I inherited a portfolio which completely mucked up my holdings, just about got that sorted and then needed some money for a project, CGT raised its head on one lot of shares and the change in dividend tax made me take stock and do a major upgrade. Am now happy with my 20 holdings, just need to balance it and that is an ongoing effort. Am also looking at expanding my IT's to cover Europe and the Americas.

Personally, I do not like the holdings in HYP1 but as an exercise to what a LTBH HYP can do it is a good example with history. I am not a PYAD purist but have never claimed to be.

Raptor.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#96014

Postby tjh290633 » November 15th, 2017, 6:28 pm

Wizard wrote:
tjh290633 wrote:I have commented on this on the other thread and see no reason why Wizard felt the need to start a new topic on this forum.

Because I wanted to compare HYP1 to CTY and it has been made clear on a number of occassions by moderators that such comparisons and reference to ITs is not welcome on the HYP Practical board. Are you saying that my understanding on that is incorrect?

Terry.


There is no problem with comparing the performance of a portfolio with an index or with an alternative investment like an IT. However that is as far as it goes. It would have been better had you chosen a better title for this topic, such as "HYP1 and CTY compared". As it is, there are now comments here which duplicate comments on the other topic, apart from your original post.

What is not acceptable is including ITs like CTY in an HYP. You can hold them in parallel, and that is useful for comparison purposes, but not in the HYP proper.

Incidentally, my HYP sometimes lags the market and sometimes goes ahead of it. It has lagged behind for the last couple of years or so. That's the nature of the market. It is the long term behaviour that matters.

TJH

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Re: HYP1 is 17 - comments not permitted on HYP Practical

#96019

Postby Wizard » November 15th, 2017, 6:40 pm

tjh290633 wrote:
Wizard wrote:
tjh290633 wrote:I have commented on this on the other thread and see no reason why Wizard felt the need to start a new topic on this forum.

Because I wanted to compare HYP1 to CTY and it has been made clear on a number of occassions by moderators that such comparisons and reference to ITs is not welcome on the HYP Practical board. Are you saying that my understanding on that is incorrect?

Terry.


There is no problem with comparing the performance of a portfolio with an index or with an alternative investment like an IT. However that is as far as it goes. It would have been better had you chosen a better title for this topic, such as "HYP1 and CTY compared". As it is, there are now comments here which duplicate comments on the other topic, apart from your original post.

What is not acceptable is including ITs like CTY in an HYP. You can hold them in parallel, and that is useful for comparison purposes, but not in the HYP proper.

Incidentally, my HYP sometimes lags the market and sometimes goes ahead of it. It has lagged behind for the last couple of years or so. That's the nature of the market. It is the long term behaviour that matters.

TJH

TJH

A few questions if I may. By "lags the market" are you referring to capital, or income or both? When you refer to the market what are you basing the comparison on, the FTSE100 or a broader / different measure? IIRC you hold ITs as well, do you also make comparison between your whole high yield portfolio (as opposed to defined term HYP) and the wider market as well? If so, does it follow they same broad trend as the HYP?

Terry.

PS In terms of this board versus HYP Practical I have decided it is just too difficult to navigate the unwritten rules of the HYP Practical board, so will no longer be posting on it.

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Re: HYP1 is 17 - comments not permitted on HYP Practical

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Postby tjh290633 » November 15th, 2017, 11:15 pm

Wizard wrote:TJH

A few questions if I may. By "lags the market" are you referring to capital, or income or both? When you refer to the market what are you basing the comparison on, the FTSE100 or a broader / different measure? IIRC you hold ITs as well, do you also make comparison between your whole high yield portfolio (as opposed to defined term HYP) and the wider market as well? If so, does it follow they same broad trend as the HYP?

Terry.

PS In terms of this board versus HYP Practical I have decided it is just too difficult to navigate the unwritten rules of the HYP Practical board, so will no longer be posting on it.


I was talking capital when I said it lags the market. In terms of income it has always been way ahead of the RPI, which is the yardstick. For convenience I use the FTSE100 (UKX) although I have long followed the FT30 Index, because UKX did not exist when I started. My HYP consists of 37 holdings, all equities, as has been listed on the Forum many times.

I hold ITs on behalf of my grandchildren, and I compare them in capital terms against UKX. They are not high yield investments, although one could be described as such, F&C Capital and Income (FCI). As far as the forum is concerned, they are not considered. The time scales are very different, and it is not sensible to try and compare them with my HYP, as each one covers a different time period. Sufficient to say that they all are ahead of UKX in terms of share price.

TJH


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