Drop since year end

[monabri]

FT250 stocks are ranging from 1 year down more than -80% to up near +60%. Index -29%, median stock -25%, average -24%


a.k.a. UK smaller caps are getting killed by high energy costs and rising cost of debt, which may leave little left for LT/KK's desired growth ambitions, where the main work for millions newly unemployed might be jogging up and down the stairs at home trying to keep warm.

Within that FTSE250 population we have Monks IT, Fidelity China Special Situations, Edinburgh Wordwide, EBOX, Smithson, Schroder Oriental....all showing shareprice drops. It's not just UK small caps suffering. I could also mention China funds in general and Bailie Gifford's Shin Nippon (BGS).

Global smaller companies are showing "drops" over 1 year, eg The Global Smaller Companies IT ( GSCT, formerly "BGSC" BMO Global Smaller).

https://www.hl.co.uk/shares/shares-sear ... -trust-plc

However, Is there not a scenario where the war in Ukraine miraculously ends and energy prices drop allowing small companies to recover?

( I won't make a political comment on this board as it is not appropriate).

[Dod101]

This last week the only shares I hold to rise have been Diageo and Shell. Every other one has fallen to greater or occasionally lesser extent.

Dod

[1nvest]

FT250 stocks are ranging from 1 year down more than -80% to up near +60%. Index -29%, median stock -25%, average -24%


a.k.a. UK smaller caps are getting killed by high energy costs and rising cost of debt, which may leave little left for LT/KK's desired growth ambitions, where the main work for millions newly unemployed might be jogging up and down the stairs at home trying to keep warm.

Within that FTSE250 population we have Monks IT, Fidelity China Special Situations, Edinburgh Wordwide, EBOX, Smithson, Schroder Oriental....all showing shareprice drops. It's not just UK small caps suffering. I could also mention China funds in general and Bailie Gifford's Shin Nippon (BGS).

Global smaller companies are showing "drops" over 1 year, eg The Global Smaller Companies IT ( GSCT, formerly "BGSC" BMO Global Smaller).

https://www.hl.co.uk/shares/shares-sear ... -trust-plc

However, Is there not a scenario where the war in Ukraine miraculously ends and energy prices drop allowing small companies to recover?

( I won't make a political comment on this board as it is not appropriate).

SC are a indicator of recession, where due to the lag factor the time to buy is when a recession is officially announced. Indeed a recession clearly isn't just UK localised. When a recovery occurs, typically SC do very well following relatively deep/fast declines.

Will this yet to be announced recession be deeper than the financial crisis dip

... who knows!

Lichello's AIM has already started buying, but is still keeping around a third in cash (34% after this months purchase (end of September)). The settings for the AIM image below has 2% drawn as a DIY dividend to supplement the broader 2% type dividend yield (4% SWR).



Fundamentally just another buy opportunity. If you assume a worst case 4% SWR and buy at a 33% discount then that increases to 4 / 0.667 = 6% SWR for that purchased stock.

[monabri]

2022 has not been that good from a Total Return (TR) point of view. TR took a tumble in Q1 (invasion of Ukraine) but recovered somewhat only to have nosedived recently. The "peak" was 17th August so I can't blame LT & KK.


46% Individual companies - (as might generally be found in a HYP)
33% Income ITs (UK & Global mix)
11% Growth ITs (well, in name "growth")
4% individual US companies
6 % PE, Bonds

[simoan]

2022 has not been that good from a Total Return (TR) point of view. TR took a tumble in Q1 (invasion of Ukraine) but recovered somewhat only to have nosedived recently. The "peak" was 17th August so I can't blame LT & KK.


46% Individual companies - (as might generally be found in a HYP)
33% Income ITs (UK & Global mix)
11% Growth ITs (well, in name "growth")
4% individual US companies
6 % PE, Bonds

Seems your YTD total return is about the same as the FTSE All-Share which is down 10.56% on a non-TR basis. If I'd held just UK large caps I think I'd be a lot better off, but that's been a losing setup for so long I can't beat myself up. And I've really been saved by the weakness in sterling, so I'm not kidding myself that being -9.37% TR is a good result. The one saving grace is that I have been 25-30% in cash and so can now take full advantage. Like many others, I suspect, my portfolio hit it's low for the year last week.

All the best, Si

[Newroad]

Hi Simoan.

Your comment re cash prompted me to look at our overall allocations - which point in time is

Equities: 69.46%
Bonds: 18.65%
Cash: 11.88%

Please note, this includes all assets except the house and defined benefit pensions. My most recent spreadsheet update (a rewrite a few months ago) has made this sort of thing easy to ascertain, which is good

Regards, Newroad

[simoan]

Hi Simoan.

Your comment re cash prompted me to look at our overall allocations - which point in time is

Equities: 69.46%
Bonds: 18.65%
Cash: 11.88%

Please note, this includes all assets except the house and defined benefit pensions. My most recent spreadsheet update (a rewrite a few months ago) has made this sort of thing easy to ascertain, which is good

Regards, Newroad

I don't normally breakdown my portfolio at that level because I don't really invest in bonds, or fixed interest more generally. All I know is I greatly reduced my fixed interest when I took up Lloyds offer to redeem my LLPC which I'd held since the GFC and similarly offloaded my NWBD held from the same time. I now only hold ELLA and Perpetual 5.125% (66WS) which would kind of count as "bonds". So... quick look at spreadsheet tells me I am currently:

Equities: 72.11%
Bonds: 1.41%
Cash: 26.48%

This is only what I hold within investment accounts. 90% of the cash is in SIPPs which have not been drawn down yet and gives me optionality to take a 25% TFLS should I need to push the button for any reason. I have a small amount of cash in bank accounts for day-to-day expenses now I am retired, which is not included.

All the best, Si

[tjh290633]

Just had a look at my unitised values:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
02-Oct-22         5.87   6,893.81       30.42
                -8.58%     -6.65%      -6.71%

That's the FTSE100, of course. I believe that the FTSE250 is down rather more at 17,168. I don't have the 31 Dec value, but 21 Jan was 22,263.24 which implies a fall of the order of about 22%.

TJH

[simoan]

Just had a look at my unitised values:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
02-Oct-22         5.87   6,893.81       30.42
                -8.58%     -6.65%      -6.71%

That's the FTSE100, of course. I believe that the FTSE250 is down rather more at 17,168. I don't have the 31 Dec value, but 21 Jan was 22,263.24 which implies a fall of the order of about 22%.

TJH

My spreadsheet tells me the FTSE250 ended last year at 23,480.81. Currently it is down 27.65% YTD. The FTSE Small Cap index is down 26.21% YTD. In that light, I should be relatively pleased by my portfolio performance given my UK equity exposure is heavily overweight small and mid caps. That is the real benefit of holding cash. I ignore inflationary effects with regard to cash awaiting investment in SIPPs btw.

All the best, Si

[vand]

A quick check of my overall invested net worth shows me that at close of Q3, in nominal terms I'm pretty much where I started the year within about 1-2%.

However, of course I've been adding to the portfolio like all good accumulators do as the market has fallen, and to say nothing of inflation.
So on a time weighted basis I'm down by about 11-12%, and maybe 18-19% in real terms.

Not too bothered - while it's never nice to lose money, all it really does is effectively adds another year to my FIRE journe... you can't have good years every year and the 2009-2021 stretch was fantastic so were are well overdue a corrective period.

It's funny that as the market goes through various stages of correction one's mindset changes. At first you are desperate to see your overall wealth continue to grow to new record level, but then when the market really starts to drop and you feel like there's bargains to be had I personally embrace the suck and want it to stay down for a longer period to be able to buy more bargains that I know will provide me we a higher return, and I don't worry about my overall net worth as long as I am able to keep accumulating.

[tjh290633]

Just had a look at my unitised values:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
02-Oct-22         5.87   6,893.81       30.42
                -8.58%     -6.65%      -6.71%

That's the FTSE100, of course. I believe that the FTSE250 is down rather more at 17,168. I don't have the 31 Dec value, but 21 Jan was 22,263.24 which implies a fall of the order of about 22%.

TJH

Thanks to OldPlodder whom spotted a discrepancy in my figures. I had one incorrect formula in my spreadsheet, and the correct table should be:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
03-Oct-22         5.66   6,893.81       30.42
               -11.90%     -6.65%      -6.71%

TJH

[NotSure]

A quick check of my overall invested net worth shows me that at close of Q3, in nominal terms I'm pretty much where I started the year within about 1-2%.

However, of course I've been adding to the portfolio like all good accumulators do as the market has fallen, and to say nothing of inflation.
So on a time weighted basis I'm down by about 11-12%, and maybe 18-19% in real terms.....

Very similar situation to myself.

On the bright side, though anathema to most here, should I wish to convert it to an annuity, the income would actually be considerably more than at start of year (for the same basic reason that investments have struggled).

[1nvest]

Just had a look at my unitised values:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
02-Oct-22         5.87   6,893.81       30.42
                -8.58%     -6.65%      -6.71%

That's the FTSE100, of course. I believe that the FTSE250 is down rather more at 17,168. I don't have the 31 Dec value, but 21 Jan was 22,263.24 which implies a fall of the order of about 22%.

TJH

Thanks to OldPlodder whom spotted a discrepancy in my figures. I had one incorrect formula in my spreadsheet, and the correct table should be:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
03-Oct-22         5.66   6,893.81       30.42
               -11.90%     -6.65%      -6.71%

TJH

iShares/Blackrock MIDD (FT250) ...
NAV Total Return as of 30/Sep/2022
YTD: -25.56%
https://www.ishares.com/uk/individual/e ... rough=true

[simoan]

Just had a look at my unitised values:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
02-Oct-22         5.87   6,893.81       30.42
                -8.58%     -6.65%      -6.71%

That's the FTSE100, of course. I believe that the FTSE250 is down rather more at 17,168. I don't have the 31 Dec value, but 21 Jan was 22,263.24 which implies a fall of the order of about 22%.

TJH

Thanks to OldPlodder whom spotted a discrepancy in my figures. I had one incorrect formula in my spreadsheet, and the correct table should be:

This year    Inc Units   FTSE       Acc Units
31-Dec-21         6.42   7,384.54       32.61
03-Oct-22         5.66   6,893.81       30.42
               -11.90%     -6.65%      -6.71%

TJH

Thinking about this, the most interesting thing here is that you use the FTSE100 as a benchmark. I normally look at performance relative to the FTSE All-Share, but only to make sure I shouldn't just give up and invest in a low cost index tracker - that certainly would've been a better strategy this past year!

The big problem with using these indices for comparison with our own portfolio performance is that they are market-cap weighted. I read an interesting Stockopedia article yesterday which pointed out that there is a significant difference between the performance of these indices on an equal-weighted basis compared to the normal market-cap weighted index, which is very overweight Oil & Mining companies. As an example, the market-cap weighted FTSE All-Share index is down ~7% but the equal-weighted index is down over 23% YTD. Since most of us naturally try to equal-weight holdings within our portfolios, perhaps it's the latter figure we should concentrate on? It certainly makes me feel a lot better about my own performance YTD

All the best, Si

[tjh290633]

Thinking about this, the most interesting thing here is that you use the FTSE100 as a benchmark. I normally look at performance relative to the FTSE All-Share, but only to make sure I shouldn't just give up and invest in a low cost index tracker - that certainly would've been a better strategy this past year!

The big problem with using these indices for comparison with our own portfolio performance is that they are market-cap weighted. I read an interesting Stockopedia article yesterday which pointed out that there is a significant difference between the performance of these indices on an equal-weighted basis compared to the normal market-cap weighted index, which is very overweight Oil & Mining companies. As an example, the market-cap weighted FTSE All-Share index is down ~7% but the equal-weighted index is down over 23% YTD. Since most of us naturally try to equal-weight holdings within our portfolios, perhaps it's the latter figure we should concentrate on? It certainly makes me feel a lot better about my own performance YTD

All the best, Si

I quite agree with you simoan. Sometimes we equal-weight advocates win, sometimes the trackers do.

TJH

[vand]

If you want a barometer of how hard it is to earn a return in 2022 whereever you have allocated your money, just consider that one of the best risk managers in GCT is current -6% for the year, and if it doesn't claw that back over the rest of the year it would be only the 2nd year out of the last 40 where they have seen a negative year.

If they finish worse than -2% then it will be their worst year in that time period.

[monabri]

If you want a barometer of how hard it is to earn a return in 2022 whereever you have allocated your money, just consider that one of the best risk managers in GCT is current -6% for the year, and if it doesn't claw that back over the rest of the year it would be only the 2nd year out of the last 40 where they have seen a negative year.

If they finish worse than -2% then it will be their worst year in that time period.

Sorry, not sure what "GCT" refers to ?

[vand]

If you want a barometer of how hard it is to earn a return in 2022 whereever you have allocated your money, just consider that one of the best risk managers in GCT is current -6% for the year, and if it doesn't claw that back over the rest of the year it would be only the 2nd year out of the last 40 where they have seen a negative year.

If they finish worse than -2% then it will be their worst year in that time period.

Sorry, not sure what "GCT" refers to ?

sorry, typo! CGT.. Capital Gearing Trust. Although I've always considered that to be an ironic name as we know gearing is one of the chief ways you can blow up your portfolio, which these guys are trying to avoid

[doug2500]

For anyone interested my pf has dropped another 2.6% this quarter taking YTD to just over -25%

The rest of the year could go either way from here I would say, and any move could be either small or large too!

[NotSure]

If you want a barometer of how hard it is to earn a return in 2022 whereever you have allocated your money, just consider that one of the best risk managers in GCT is current -6% for the year, and if it doesn't claw that back over the rest of the year it would be only the 2nd year out of the last 40 where they have seen a negative year.

If they finish worse than -2% then it will be their worst year in that time period.

Who'd have thought that as a UK citizen, simply buying dollars (cash even) would have beaten inflation, YTD?