Portfolio Review 2023

[Adamski]

My end of the year porfolio is:

Tracker funds 50%
VWRL
Fidelity Index World

Defensive 50%
VLS60
CTY
PNL
RICA

Returned ~6%. After losing ~6% in 2022 so back to where it was end of Dec'21.

A good year for investors, with the market (vwrl) up 13%, after a fall of 8% in 2022. Largely driven by the Magnificent 7, interest rates turning the corner, and the US avoiding a recession.

I don't share the optimism, as some here probably sick of me posting about tech bubbles and tesla will testify lol, hence more defensive than many here. With the cost of living crisis, wars in ukraine and gaza, and everything else going on, can't see this rally continuing.

I sold CGT which was 25% of my portfolio, and put into 1/2 year bonds with Marcus and Tesco, a 5%+ guaranteed return was too good turn down.

A happy Christmas to you all, and here's hoping for some peace in ukraine and gaza in the new year. God bless/ seasons greetings, adam

[yieldhog]

Here's the SIPP portfolio I started with on Jan1,2023.
I'm 76 and the SIPP provides me with a modest supplemental income. It's been in drawdown for about 15-years.
My objectives now are to simplify so that my wife can manage it and continue to receive a modest income.
I accept that I will need to sacrifice yield to achieve my objectives.High Yield Fixed Income

High Yield Fixed Income
GACA 8.875 Cum Pref Sold
GACB 7.875 Cum Pref Sold
MBSP 6.75 PIBS Sold
SANB Pref Sold
NCYF
SMIF
VSL
Large Cap UK Equities
AEI
BATS
IUKD
IMB
LGEN
MNG Sold
PHNX
World ITs and ETFs
HFEL (Far East) Sold 50%
HINT (Non-UK Equity Income)
IAT (Asia x-Japan Equity Income)
IAPD (Asia)
JEGI (Europe G+I)
JGGI (Global G+I}
NAIT (North America)
Natural Resources
BWRM (World Mining and Metals) Sold
Small Cap And VC
BVT Sold
Speculative Equities
BDEV, BWY. POLY All Sold

The portfolio produced a dividend yield of 7.52%
Nett realized gain of 1,77%
Change in value based on today's market value -0.68%
Drawdown of 3.90%
Taking account of monthly drawdown, I calculate that is Total Return of 12.51% before taking account of inflation.

At the start of the year there were 26 positions.
I will start the New Year with 19 positions and a projected yield of 7.31 based on my book costs. At market prices the projected yield would be 7.75%. These figures are of course based on my weightings.

Happy New Year to All

Y

[moorfield]

My objectives now are to simplify so that my wife can manage it and continue to receive a modest income.

Well you could reduce it down to a handful of ITs, one from each sector type, say. AEI (UK), NCYF (Debt), HFEL (International), FSFL (Specialist), TRY (Property) - something like that. All dividend heroes except FSFL (but it's getting there) and an average yield of 7.5-8%. Very easy to manage!

Merry Christmas!

[ExtraTime]

I love a portfolio end of year review. I'm up 12% over the year with the FTSE-100 generally flat. 2022 and 2021 were less good, so I am cheery this Christmas.

I have been (i) 30/40% in short-dated gilts and cash for some time but have pushed out along the maturity curve over the summer when inflation looked more and more likely to be subdued, and (ii) 60/70% anything global (non-UK pref.) in equities, preferably with a dividend or a track record of decent growth. This year has been the "everything rally" with bonds and gilts doing surprisingly well, and I anticipate this to continue into 2024 given the likelihood of rate falls (worth reading James Gorman retirement piece in the FT if you want a good and succinct 2024 forecast).

I like to have a 70/30 or 60/40 approach and for the previous 5 years, when bonds were not paying, my 30/40% bond piece was in a variety of private credit, infra and renewables to create a bond like element to my portfolio but with more risk and a decent return - so Biopharma Credit, Greencoat, Bluefield Solar, HICL, Sequoia, CT Property, Real Estate Credit Investments. All sold in 2022 and 2023 and thus avoided some of the horrors that this bag has gone through. These were replaced with money market funds and short dated bonds (mainly Gilts held directly), which I have now pushed out to medium/long-term bonds.

2022 and early 2023 I was in private credit, real estate and renewables, which did well especially the latter with higher power prices. They all either had floating rates of interest and/or some inflation proofing. But seeing interest rates rise I moved to money market and short-dated gilts in 2023. I never really understood index linkers and they do not work in a rising interest rate regime, but did go into CGT a little as they hold many index linkers - disastrous.

With equities I am more passive and like a dual approach of pure global (so unfortunately heavy on the magnificent 7 by default) and active growth & income, so Fundsmith, JGGI and VHYL. The latter 3 do not have a particularly heavy focus on tech, and I am currently trying to be slightly light on tech on the basis that I do not need the extra return this might generate, and hate the risk of this sector given the extraordinary valuations. 4-5% return on the portfolio a year would be more than happy to accommodate Mrs Extra Time's spending habits.

Equities
VDPG 5%
Fundsmith 12%
VHYL 8%
VWRL 16%
VMID 8%
UKW 2%
CGT 2%
EQQQ 2%
JGGI 8%

Bonds & Cash
ERNS 7%
Gilts 17%
SLXX 8%
Cash 3%

I try to keep to under 20 holdings and the Gilts bucket includes 7 issues with maturities from Jan-24 out to Jan-38. All are in ISA's and SIPPs though if I have cash outside these I am tempted to buy low coupon Gilts directly as the capital gains on Gilts are tax free.

I had a long City career (I lent to big companies) and from this experience have a jaundiced view of both fund managers and most company CEO's and management teams, so in the equities box I like to take a risk but do not like to take individual company (and thus CEO) risk.

As I am retired I take the view that as long as the next three years of spending is held in cash (to avoid selling into a crash) I can go pretty wild on the risk front as the market will recover in time for me. Having said that I am trying to cut down my trading activity and making fewer, bigger bets rather than frequently trading. However I also see returns from bonds and equities as of equal interest and having been a leveraged financier for some time back in the day, don't mind taking on some fairly hairy credit risk when the economy is set fair. I think credit and debt are massively underinvested in by private individuals, and this is a sad gap we all need to spend more time and energy in.

That's a bit about me and what I do.

[Dod101]

I love a portfolio end of year review. I'm up 12% over the year with the FTSE-100 generally flat. 2022 and 2021 were less good, so I am cheery this Christmas.

I have been (i) 30/40% in short-dated gilts and cash for some time but have pushed out along the maturity curve over the summer when inflation looked more and more likely to be subdued, and (ii) 60/70% anything global (non-UK pref.) in equities, preferably with a dividend or a track record of decent growth. This year has been the "everything rally" with bonds and gilts doing surprisingly well, and I anticipate this to continue into 2024 given the likelihood of rate falls (worth reading James Gorman retirement piece in the FT if you want a good and succinct 2024 forecast).

I like to have a 70/30 or 60/40 approach and for the previous 5 years, when bonds were not paying, my 30/40% bond piece was in a variety of private credit, infra and renewables to create a bond like element to my portfolio but with more risk and a decent return - so Biopharma Credit, Greencoat, Bluefield Solar, HICL, Sequoia, CT Property, Real Estate Credit Investments. All sold in 2022 and 2023 and thus avoided some of the horrors that this bag has gone through. These were replaced with money market funds and short dated bonds (mainly Gilts held directly), which I have now pushed out to medium/long-term bonds.

2022 and early 2023 I was in private credit, real estate and renewables, which did well especially the latter with higher power prices. They all either had floating rates of interest and/or some inflation proofing. But seeing interest rates rise I moved to money market and short-dated gilts in 2023. I never really understood index linkers and they do not work in a rising interest rate regime, but did go into CGT a little as they hold many index linkers - disastrous.

With equities I am more passive and like a dual approach of pure global (so unfortunately heavy on the magnificent 7 by default) and active growth & income, so Fundsmith, JGGI and VHYL. The latter 3 do not have a particularly heavy focus on tech, and I am currently trying to be slightly light on tech on the basis that I do not need the extra return this might generate, and hate the risk of this sector given the extraordinary valuations. 4-5% return on the portfolio a year would be more than happy to accommodate Mrs Extra Time's spending habits.

Equities
VDPG 5%
Fundsmith 12%
VHYL 8%
VWRL 16%
VMID 8%
UKW 2%
CGT 2%
EQQQ 2%
JGGI 8%

Bonds & Cash
ERNS 7%
Gilts 17%
SLXX 8%
Cash 3%

I try to keep to under 20 holdings and the Gilts bucket includes 7 issues with maturities from Jan-24 out to Jan-38. All are in ISA's and SIPPs though if I have cash outside these I am tempted to buy low coupon Gilts directly as the capital gains on Gilts are tax free.

I had a long City career (I lent to big companies) and from this experience have a jaundiced view of both fund managers and most company CEO's and management teams, so in the equities box I like to take a risk but do not like to take individual company (and thus CEO) risk.

As I am retired I take the view that as long as the next three years of spending is held in cash (to avoid selling into a crash) I can go pretty wild on the risk front as the market will recover in time for me. Having said that I am trying to cut down my trading activity and making fewer, bigger bets rather than frequently trading. However I also see returns from bonds and equities as of equal interest and having been a leveraged financier for some time back in the day, don't mind taking on some fairly hairy credit risk when the economy is set fair. I think credit and debt are massively underinvested in by private individuals, and this is a sad gap we all need to spend more time and energy in.

That's a bit about me and what I do.

Thanks for a different take on investing from most of us here. Presumably you already have your basic income secured so that you can afford to take more risk with your portfolio. But it is refreshing to read of your portfolio. I am at the other end of risk I guess, because I do not have a pension except the State one and so rely on my investments for income.

Dod

[yieldhog]

My objectives now are to simplify so that my wife can manage it and continue to receive a modest income.

Well you could reduce it down to a handful of ITs, one from each sector type, say. AEI (UK), NCYF (Debt), HFEL (International), FSFL (Specialist), TRY (Property) - something like that. All dividend heroes except FSFL (but it's getting there) and an average yield of 7.5-8%. Very easy to manage!

Merry Christmas!

That's certainly food for thought. Although I mentioned simplifying, I also have other objectives, including elimination of single company exposures, generating at least 5% yield, reasonable growth of the portfolio and spread of sectors (domestic and global).
One of my basic objectives for the SIPP has been to try to keep at least 20% in natural resources and energy. For most of the past I have achieved this through holdings in BRWM and BERI. This has produced some great results in recent years but as the cycle has turned I took profits. I've tried to replace BRWM and BERI with some smaller single company holdings that seemed to promise good growth prospects and decent yields (e.g. CAML and FSFL). However, I think this goesagainst my objectives of simplifying and avoiding single company exposures, so I think I will return to BRWM and BERI as funds become available.

Another thematic objective is to hold part of the portfolio in healthcare sector funds such as WWH and although I already own this in my taxable fund I may also include it in the SIPP.

Finally, I would like to see more US exposure in the SIPP for growth and income objectives.

Happy New Year to all.

Y