MDS1951 HYP-ISH Portfolio Review 2022

[MDS1951]

Here is my review for 2022; as usual it is a rehash of the previous year's review, updated for 2022.

Here's how my HYP progressed during 2022. I made no purchases with new money and withdrew £4,000 from dividend income. First, a table.




The value of my portfolio was static which more or less mirrors the very small increase in the FTSE 100.

Dividend income, after stripping out the specials and capital returns, increased by 10.2%. I'm happy with that.

I had a more active year re purchases and disposals; basically selling individual shareholdings and putting the money into collective investments. I sold all my shares in BP, Shell, Compass, Tate and Wood Group, and bought units in Jupiter Asian Income and increased my holdings in the other ITs.

The components of my portfolio are set out below; I wouldn't buy some of them today because the yields are too low, either because of dividend cuts or capital appreciation. However, at the time of purchase the yield of each holding was either close to or above the FTSE100 average.

AstraZeneca
Aviva
Billiton
British Land
Diageo
Glaxo
Legal & General
National Grid
Pennon
Relx
RTZ
Sainsbury
Unilever
United Utilities
Vodafone

City of London IT
Jupiter Asian Income UT
Law Debenture
Merchants IT
Murray Income IT
Murray International IT
Schroder Income and Capital IT
Temple Bar IT

The UT/ITs accounted for 35.7% of my portfolio (excluding cash) by value at the end of 2022 and the shares 64.3%. I decided at the end of 2018 that I was fed up with taking decisions over share purchases and that I would farm the decision-making out to IT managers. I must confess I'm beginning to wonder about the value of my annual portfolio review to other investors here; 8 of my 23 holdings are collective investments, and 3 (Relx, Diageo and AstraZeneca) wouldn't count as HYP shares today because the value of the shares has increased so much since I purchased them. My portfolio is becoming decreasingly HYP-ish over time.

The IRR for the portfolio decreased from 7.1% to 7.0%.

Some time ago I unitised the portfolio on an accumulation basis and in 2022 the dividend income increased by 14.3% on a unit basis. The price per unit increased as well and now is £26.53.

I think my experience with my portfolio for 2022 shows again the value of having a diversified portfolio in that my eggs are not all in one basket; if I had chosen a different strategy of betting on 2 or 3 shares that I hoped would zoom away in terms of their capital value I'd be awake all night wondering if I'd chosen the right shares. With this strategy I'm confident that my dividend income will not suffer a catastrophic reduction because I think most of the companies are big enough and run competently enough to carry on churning out profits, or recover if they have to reduce or cancel their dividends. I'll never become as rich as Croesus with the HYP strategy, but it makes retirement somewhat more comfortable than keeping the cash in a building society would do.

Here's the link to last year's report.

viewtopic.php?f=56&t=32738

I have a small IT portfolio and I have posted about its performance in 2022 - here's the link if anybody is interested.

viewtopic.php?f=56&t=37336

Finally, I wish everybody a Happy, Safe and Prosperous New Year - and good luck to us all with our investments in 2023.

MDS1951