MDS1951 Investment Trust Portfolio Review 2018

[MDS1951]

My IT portfolio isn't huge and consists of 10 ITs purchased for roughly £2k per IT, making a total investment of £19.9k; I ceased investing new money in my ITs in July 2016, so 2018 is the first year where year on year income comparisons haven't been distorted by dividend drag. I used Luni's B8 and B7 lists as the basis for my choices, but I also did a little research into each IT to see how they were regarded by other Fools, financial websites etc. The ITs are:-

BMO Capital and Income B7
City of London B8
Edinburgh Investment Trust B8
Law Debenture
Lowland Investment Company B7
Merchants B8
Murray Income B8
Murray International B7
Schroder Income Growth B8
Temple Bar B8

Dividend income for the portfolio in 2018 was £876 compared with £835 for 2017, an increase of 4.9%. That is ahead of CPI inflation, so I'm happy with that. It paid for the cat pet insurance for Maine Coons the Lady Mina and her son the Lord Midge.

The value of the portfolio at today's closing prices is £20.3k so it has just about managed to stay in overall profit; however, its value a year ago was £23.2k so I'm not so happy with capital performance in 2018. Four of the ITs - City of London, Edinburgh, Murray Income and Schroder Income Growth - are now worth less than I paid for them, Edinburgh being the real laggard. They are all B8 jam today ITs in the Luni universe.

I unitised the portfolio on an income unit basis from the beginning of the portfolio because all the dividends are being withdrawn from the portfolio. At 31/12/2018 the value per unit was £5.8056 compared with £6.6471 a year earlier - a fall of 12.66%. Income per unit for 2018 was 25.1p compared with 23.9p for 2017.

Just for purposes of comparison the FTSE100 index fell by 11.8% during 2018 so my IT portfolio fell in value by more than that - I hope that doesn't happen too often.

So it is early days for my IT portfolio and I don't suppose I'll know for several years whether I would have done better by putting all the money in a tracker fund instead.

MDS1951

[OZYU]

-12.48%, that is what the FTSE has actually achieved this year, so your -12.66% is nearer than you think.


My wife's PEP/ISA, HY, which is invested mostly in ITs, has only underperformed the FTSE in 3 years since PEPs, so don't worry in the slightest. Long term I would be very surprised if your portfolio did not better the FTSE or a FTSE tracker.

Ozyu

[MDS1951]

Thank you for your reassurance, Ozyu. I am not anxious about the reduction in value of my IT portfolio - merely grumpy!