Arborbridge wrote:I now post some more information at the half year stage, which shows the more short term picture. Rather than looking at the numbers over 12 months, here they are over 6months :-in pence per unit June 30 2019 June 30 2020 change
HYP 3.61 2.54 -29.6%
incITs 3.59 3.80 + 5.8%
OEICs 3.48 3.21 - 7.7%
6 month change in unit priceprice of income unit Dec 30 2019 June 30 2020 change
HYP 135.68 115.56 -14.8%
incITs 185.51 144.35 -22.1%
OIECs 172.38 141.96 -17.6%
I generally prefer the 12 month rolling figure if only because I sometimes make changes myself which alter the distribution of dividends, and these changes are less significant on the longer scale. However, the 6 month figures do show more dramatically the initial effect of the Covid crisis.
Arb.
Posted here to allow discussion, rather than just a passing mention, of the non-HYP components
I find these numbers very interesting as it is a real world example. If I understand it correctly for both HYP and OIECs the income has dropped and so has the capital value, but for ITs the capital value has dropped but the income has actually increased year-on-year. Presumably this means a fairly significant change in relative yields. Unfortunately with the mismatching dates we cannot calculate the actual impact from the above, but using an assumption to illustrate...
Taking the June 2019 income and assuming that was exactly half the annual income would give for each basket a trailing yield as at 31st December as follows:
HYP 3.61 x 2 = 7.22 / 135.68 = 5.3%
inc ITs 3.59 x 2 = 7.18 / 185.51 = 3.8%
OIECs 3.48 x 2 = 6.96 / 172.38 = 4.0%
Assuming the June 2020 income and again assuming it is half of the annual income would give for each basket a trailing yield as at 31st December as follows:
HYP 2.54 x 2 = 5.1 / 115.56 = 4.4%
inc ITs 3.80 x 2 = 7.60 / 144.35 = 5.2%
OIECs 3.21 x 2 = 6.42 / 141.96 = 4.5%
Now the numbers above are no doubt not right as the 50:50 income split is I am sure not correct, but the direction of travel is. The question I have Arb is, what does this mean for asset allocation in the short term? Are you now putting more surplus funds in the direction of the ITs for an immediate bigger 'bang for the buck' or are you sticking with the past split, working on the basis that either HYP shares will increase their dividends again quickly or that ITs and OIECs will have to cut their pay outs?