2023

[Dod101]

Another year best forgotten. Capital wise I am up about 5% over the year and my income is up about the same. After many years of doing nothing or worse, HSBC has come to my rescue both in respect of income and capital. I suspect that it has some way to go yet.

I am though totally puzzled as to why the financials in the form of Legal and General, Chesnara and Phoenix have such persistently high yields. Their dividends keep increasing and yet capitalwise they are going nowhere.

Dod

[88V8]

I am though totally puzzled as to why the financials in the form of Legal and General, Chesnara and Phoenix have such persistently high yields. Their dividends keep increasing and yet capitalwise they are going nowhere.

I hold all three and they are all underwater.
In the same vein, MNG was a punt for me on the recommendation of PYAD and they are slightly up whilst sitting on a similar 8% yield.
Perhaps a matter of fashion. At least these four are not a disaster like Aberdeen.

V8

[Dod101]

Another very good performer in 2023 has been the oft maligned Alliance Trust. In its latest incarnation it is doing well with a modest yield of around 2.5%. I am not deeply enough into my analysis yet to decide if I need to make any changes to my portfolio but I will be cutting my holding in Imperial Brands as I have just done with BAT as I reported on another thread.

Dod

[monabri]

Another year best forgotten. Capital wise I am up about 5% over the year and my income is up about the same. After many years of doing nothing or worse, HSBC has come to my rescue both in respect of income and capital. I suspect that it has some way to go yet.

I am though totally puzzled as to why the financials in the form of Legal and General, Chesnara and Phoenix have such persistently high yields. Their dividends keep increasing and yet capitalwise they are going nowhere.

Dod

Regarding LGEN, there was a recent article in the Financial Times (I can read it, so it doesn't seem to be paywalled!)

https://www.ft.com/content/435754ba-fce ... ff51d983eb

Some snippets from the article in case it is paywalled

"However, analysts say he [Sir Nigel Wilson] is leaving behind a group that is being shunned by some investors because of its credit exposure at a time of rising interest rates and its strategic focus on the capital-intensive business of taking over corporate pension obligations through so-called bulk annuity deals."

"“The current model will deliver for years, but what comes after?” said one person familiar with the board’s decision to choose Simões."

The article says it is not an immediate problem but the question is what will replace it? The bulk annuity deals are described as "a melting ice cube"

"Investors are keen to identify the next avenue of growth for the group"

"Analysts cite domestic pressures on the stock including a shrinking institutional investor base for UK income stocks and a lack of interest from overseas investors." (my view - as interest rates reduce, the interest might grow!)

"UK life insurers, as heavy holders of credit to back their pension liabilities, have also become the focus of concern over their exposure to rising interest rates. “The market is clearly saying, ‘we are worried about balance-sheet risk’,” said Andrew Baker, an equity analyst at Citi."

but we are now, hopefully, cycling back to lower interest rates..

"The focus on credit risks has been twinned with questions over what happens when the current wave of bulk annuity business slows. L&G currently expects to do £8bn-£10bn of UK deals a year, but investors are already thinking ahead to when the pool of companies with a legacy defined benefit pension scheme has shrunk significantly." (My Bold)

The article also mentions that Simões might have been appointed for his international experience. If the UK defined benefit pension bulkn annuities have a finite life, then the business needs to look elsewhere/ other markets.


Shades of British American Tobacco and what happens in 30 years time - what will replace their core business? I didn't think "the market" took such a long term view! The bulk annuity deals should run for many a year yet!

[Dod101]

Thanks monabri. Legal & General is the least of my worries at the moment and the share price pretty well held its own in 2023. Phoenix Holdings was down 12% which I think reflects its generally inferior business model. Chesnara down by 7.76%

My best performer in 2023 was M J Gleeson, up by 41%. I have held it for some time but as I recorded at the time, I bought more on 3 January 2023 at £3.48. My only really sensible move in 2023. HSBC's return to financial health has helped all holders with the price up 23% and a big increase in the dividends paid as well.

I think my biggest disappointment was Diageo, down nearly 22% and of course the two tobaccos which I am extracting myself from. I have already sold half of my holing in BAT and half of Imperial Brands will go on Tuesday when the markets open again.

In all I am up a mere 5% or so so it is not all doom and gloom but not a very good year.

Dod

[vand]

If the underlying businesses are sound and they can continue to maintain/grow their dividends then I don't have too much problem with their underperformance in 2023. It's just a year where I was accumulating while they were undervalued.

I agree these are mostly mature & unexciting businesses, but that is why they are able to consistently return a large proportion of their earnings to shareholders. Personally that is what I want... I invested in them to collect the long term income stream, and so long as they are holding up their end of the bargain in this then I will continue to hold them.

Of course, it would be nice if we had had 25% capital returns like we saw in the S&P, but bear in mind this was on the multiple expansion rather than underpinned by significant earnings growth.

Anyway, lets see what 2024 holds. Who knows.. in a softer economy where bond yields are rapidly falling and people suddenly aren't too enamored to be paying silly multiples for distant future earnings on racier stocks, boring old BATS and LGEN with their 8-9% payouts may find themselves a very attractive proposition.

[monabri]

2023:

The value of the portfolio is 4.7% higher than at close of play 2022 ... BUT, this includes dividends reinvested, none withdrawn.

When dividends are stripped out, it is not so rosy, I am "down" 1.4% compared with "Close of play 2022".

[Dod101]

2023:

The value of the portfolio is 4.7% higher than at close of play 2022 ... BUT, this includes dividends reinvested, none withdrawn.

When dividends are stripped out, it is not so rosy, I am "down" 1.4% compared with "Close of play 2022".

My 5% increase is with a very modest amount of new money added. Taking that out and I am still up around 3.5% mostly I think due to a late surge in the HSBC and Alliance share price. I expect more from HSBC next year.

I extract all the dividends.

Dod

[ReformedCharacter]

After a bumpy ride this year, I'm pleased to see an increase of 8.1% with dividends reinvested, stripping out the dividends gives an increase of 2.5%. However, if I had made a yearly comparison a couple of months ago the results would have been far less pleasing.

RC

[Lootman]

After a bumpy ride this year, I'm pleased to see an increase of 8.1% with dividends reinvested, stripping out the dividends gives an increase of 2.5%. However, if I had made a yearly comparison a couple of months ago the results would have been far less pleasing.

Put another way the S&P 500 is up almost 25% in 2023, with much of that coming in the 4th quarter. But it is only at the same level as it was at the end of 2021, so dividends were really all you got in 2 years, unless you got your timing just right.

I am up about 11% in 2023. Best share was Nvidia, which quadrupled. And the worst was Sibaye Stillwater, a platinum miner, down about 50%. Both are risky, obviously.

[vand]

Dividends aren't free... You can't divorce the disappointing capital gains from the high dividend payouts - dividends are the main way in which capital is returned to the shareholder when we are talking about shares that yield at rates which the highest FTSE yielding bluechips. You should absolutely expect the capital appreciation to lag...

[yieldhog]

Following are numbers for my 2023 Sipp portfolio:
Keep in mind this is for a SIPP for a 76-year old and it has been in draw down for about 15-years.
The SIPP provides a supplemental income for my wife and me. It will be passed on to my wife when I die. My wife currently has a much longer life expectancy than me and hence it may become a more important income source for her in the years after I am gone. When she dies, the SIPP will pass to our two sons.
The objective of the SIPP is to provide a dividend income in excess of the drawdown amount with any excess being reinvested to improve the income/growth of the fund.
A shorter-term objective is to reduce the number of holdings in the SIPP to make management simpler ahead of the handover to my wife.
Results results for 2023.
2023 Portfolio Dividend Return +7.47% . Slightly up on last year’s 6.7%
Realized nett capital gain of 1.77%. GACA, GACB, MBSP, BVT, BRWM, POLY, SANB, BWY and BDEV were all sold, plus half of my HFEL holding was sold. CAML, FORT and VOD were added. Overall, holdings went from 26 down to 19.
Market value of the portfolio was down 0.10% over the year
Current cash level 1.95%.
SIPP drawdown for 2023 was3.90%.
Total return looks like 13.04% before inflation.
PORTFOLIO at START 2023
Fixed Income Individual Issues
GACA 8.875 Cum Pref Sold
GACB 7.875 Cum Pref Sold
MBSP 6.75 PIBS Sold
SANB Pref Sold
High Yield Fixed Income
NCYF
SMIF
VSL
Large Cap UK Equities
AEI
BATS
IUKD
IMB
LGEN
MNG Sold
PHNX

World ITs and ETFs
HFEL (Far East) HFEL Sold Half
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

Portfolio for 2024
AEI
BATS
CAML
NCYF
FORT
HFEL
HINT
IMB
IAT
IAPD
IUKD
JEGI
JGGI
LGEN
NAIT
PHNX
SMIF
VOD
VSL

Forecasts for 2024 based on year-end prices and my weightings:
Book Yield 7.31%
Market Yield 7.55%

Notes.
I expect a dividend cut from HFEL.
VSL is liquidating hence I expect some dividends but also capital repayments.

Happy New Year Investing to All.

Y

[Newroad]

Evening All.

I do our detailed reports 01 July to 30 June. However, as I take two unitised measurements per month (end month and approximately mid month) the annual figures are fairly easy to obtain. The following are total return from accumulation units, 31/12/2022 to 31/12/2023

Core Portfolios (SIPP's, ISA's and JISA's): +11.88%
Pseudo-HYP: +11.31%

It is worth noting that the Pseudo-HYP may have relatively benefitted this year from holding stocks that a HYP may not, to achieve "sectoral balance" as per my chosen methodology. In this case, I refer to SGE and BA. (first and third in my unrealised P&L list - but only yielding 1.66% & 2.52% currently - data from Dividend Data) in particular. This, of course, may not always be the case.

A healthy, happy and halcyon 2024 for all!

Regards, Newroad

[Gerry557]

Dividend Income up 34.89% Happy with that but it was partly planned to have a larger increase. Additions of 2022 feeding in and timed reinvestment of dividends during 2023 lows. This was aided with some additional capital for 2023 and changing the mix of a few holdings. Some moved to higher yielding shares. Every month bar July showed increases on previous year.

PF up 11.97% with additions, reinvestments and withdrawals
PF return 3.16% without additional funds, reinvestment or withdrawals

2023 started off with some big weekly jumps with a PF high week ending 18th Feb. This followed a reduction with a low week ending 8th July. This was when the majority of additions were added which started the month prior. Lucky or fortunate in buying dips as planned. It worked during covid! Although ADM bought at the start of the year did well even If I'm still struggling to work out its actual yield. HFEL has been poor capital wise but the divi has increased.

Things started to improve slightly but dipped again week ending 28th Oct. In fact 2023 was looking like it was going to be a miserable year with the PF underwater for most of it. 2023 ended on an upward trend with the last 7 weeks all being positive. How often does that happen? The Santa rally saved 2023 really. I have been withdrawing cash during this period. Better interest rates, bigger buffer and equities were more expensive.

Im not expecting 2024 to be as good. I haven’t invested as much or reinvested as much as 2022 for 2023 so not going to see such a jump. Additionally I expect the start of the years income to start off lower. Selling a share that paid in Jan and a forced sale of EPIC which paid monthly. Obviously the sold share will improve payments later in the year as that was reinvested but I will have a lump of cash shortly from EPIC that wont be earning until reinvested. (A new topic perhaps) I am a little reticent to put this money in after the rally. Will this go on till Feb like last year? Ideally Id like to find a dip.

So my expectation is a modest rise in income for this year and a flatish PF and probably taking a bit more income out. Whilst I can probably plan to increase dividends just buy buying more the PF value is at the whim of Mr Market.

[tjh290633]

I have just done some calculations. Here are the movements in share price for my portfolio for the past 5 years:

2019             2020             2021              2022                2023
Change    Epic   Change    Epic   Change    Epic    Change    Epic      Change 
 52.43%   WMH*    43.29%   MKS     69.77%   BA.      55.69%   TW.        44.66%
 41.94%   ADM     25.86%   S32     55.69%   PSON     53.16%   IMI        30.75%
 35.25%   KGF     24.61%   SGRO    51.59%   BP.      43.69%   BA.        29.73%
 34.25%   RIO     21.47%   IMI     49.01%   SHEL     43.37%   TSCO       29.57%
 33.01%   BHP      8.34%   DGE     40.24%   AZN      29.27%   ADM        25.60%
 31.17%   PSON     6.81%   LLOY    31.17%   IMB      28.12%   SGRO       16.08%
 29.52%   RB.      6.74%   BP.     29.71%   BATS     20.05%   SHEL       10.55%
 29.26%   SGRO     5.62%   RDSB    28.82%   RIO      18.52%   BT.A       10.31%
 28.37%   SSE      4.28%   BT.A    28.20%   WDS@     17.40%   SSE         8.41%
 28.14%   ULVR     0.95%   AV.     26.20%   BHP      16.84%   UU.         6.87%
 24.89%   PHP@     0.67%   TSCO    25.28%   CPG*     16.14%   NG.         6.08%
 23.57%   S32     -1.15%   KGF     25.11%   AV.       7.89%   LLOY        5.06%
 23.00%   IMI     -1.19%   NG.     22.52%   TATE      7.53%   BHP         4.65%
 21.58%   SMDS    -2.50%   UU.     21.68%   HLN@      6.16%   KGF         3.05%
 20.72%   AZN     -3.72%   CPG     21.13%   ULVR      5.99%   PSON        2.66%
 20.61%   UU.     -5.13%   GSK     19.72%   S32       4.38%   BLND        1.14%
 19.80%   NG.     -8.40%   AZN     18.49%   SSE       3.82%   GSK         0.88%
 19.30%   TSCO    -9.33%   BHP     14.26%   IGG      -3.81%   RIO         0.76%
 15.18%   DGE    -10.08%   BA.     12.48%   LLOY     -5.00%   LGEN        0.64%
 14.55%   TATE   -11.29%   LGEN    11.76%   NG.      -5.89%   HLN        -1.74%
 14.51%   LGEN   -12.15%   SSE      9.93%   UU.      -8.96%   AV.        -1.83%
 12.80%   BA.    -13.46%   ADM      8.64%   RKT      -9.27%   BP.        -1.84%
 11.50%   TW.    -14.27%   BLND     8.59%   DGE      -9.56%   IGG        -2.11%
  7.58%   BATS   -16.20%   TW.      5.85%   GSK     -10.52%   SMDS       -4.42%
  5.89%   VOD    -17.59%   IMB      5.28%   LGEN    -16.13%   AZN        -5.51%
  4.58%   IMB    -17.84%   SMDS     2.46%   SMDS    -16.23%   RKT        -5.80%
  1.93%   AV.    -22.33%   MARS     1.85%   TSCO    -22.66%   PHP        -6.32%
 -4.02%   BLND   -23.45%   BATS     0.94%   VOD     -24.96%   TATE       -7.34%
 -4.29%   GSK    -24.56%   PHP     -0.92%   BLND    -25.59%   ULVR       -9.13%
 -4.91%   CPG    -27.88%   TATE    -1.93%   IMI     -25.81%   IMB       -12.77%
-13.63%   BT.A   -31.28%   RKT     -3.06%   PHP     -26.82%   WDS       -16.43%
-19.18%   MKS    -36.16%   IGG@    -5.68%   KGF     -30.21%   VOD       -18.61%
-21.37%   MARS   -40.57%   VOD     -7.18%   ADM     -32.31%   S32       -21.50%
-23.37%   LLOY   -41.70%   PSON    -9.88%   BT.A    -33.91%   DGE       -21.75%
-32.12%   RDSB   -43.76%   ULVR   -10.17%   TW.     -42.08%   BATS      -30.05%
          BP.    -45.97%   RIO    -10.57%   MARS*   -42.83%                    
                                            MKS*    -46.72%                    
                                            SGRO    -46.84%

* indicates a share sold during the year, so figures are to the date of sale.
@ indicates a share bought that year, and is from the date of purchase.

Often the worst shares feature in the best shares the following year, and vice versa:

Bottom 6    2015     2016   2017    2018    2019    2020    2021    2022    2023
      31   RDSB    BLND     IMB    VOD     BP.     BT.A    RKT     ADM     IMB- 
      32   IMI     CLLN @   SSE    KGF     MKS     MKS     IGG@    BT.A    WDS  
      33   PSON    BT.A     GSK    SMDS    BT.A    MARS-   VOD     TW.     VOD  
      34   PFL     MKS      MARS   BATS    IMB     LLOY    PSON-   MARS*   S32  
      35   BLT     TW.-     BT.A   WMH     S32     RDSB    ULVR    MKS-    DGE  
      36   S32 @   WMH      CLLN   CLLN*   PSON-   BP.     RIO-    SGRO-   BATS 
                                                                                
Top6        2015     2016   2017    2018    2019    2020    2021    2022    2023
       1   TW.     S32+     INDV   PSON    SGRO    WMH*    MKS+    BA.     TW.+ 
       2   REX     BLT+     TW.    AZN     TW.     ADM     S32     PSON+   IMI  
       3   IMT     PFL *+   DGE    GSK+    MARS    KGF     SGRO    BP.     BA.  
       4   INDV    INDV     IMI    BHP     TSCO    RIO     IMI     SHEL    TSCO 
       5   ADM     RDSB+    SGRO   CPG     SSE     BHP     DGE     AZN     ADM+ 
       6   SMDS    BP.      SMDS   DGE     LGEN    PSON+   LLOY    IMB     SGRO+

+ indicates a movement from bottom to top, - the reverse movement.

A few selected shares show how they can move, IMI being a notable performer:

Year   S32       BLT/BHP   PSON      IMI       RDSB/SHEL   FTSE100   Year   TJH   
2015   -49.52%   -45.26%   -38.15%   -31.79%     -30.90%    -4.93%   2015    4.46%
2016   207.62%    71.91%    11.21%    20.72%      52.56%    14.43%   2016   13.13%
2017    25.54%    16.52%   -10.18%    28.71%       6.56%     7.63%   2017    9.10%
2018    -9.25%    -8.48%    27.50%   -29.18%      -6.72%   -12.48%   2018   -9.71%
2019   -23.37%     7.58%   -32.12%    24.89%      -4.29%    12.10%   2019   19.85%
2020    -0.01%     8.34%     6.81%    -1.19%     -43.76%   -14.34%   2020   -6.38%
2021    55.69%    14.26%    -9.81%    49.01%      28.82%    14.30%   2021   20.79%
2022     4.38%    16.84%    53.16%   -25.81%      43.37%     0.91%   2022    2.40%
2023   -21.50%     4.65%     2.66%    30.75%      10.55%     3.78%   2023    7.50%

The final column TJH shows how my portfolio performed in cash terms each year.

TJH

[yieldhog]

I have just done some calculations. Here are the movements in share price for my portfolio for the past 5 years:

Thanks to Tjh for such a well-presented summary of his portfolio. I wish I could be so organised.

The figures provide a lot of food for thought and I will try to spend more time utilising them.

My SIPP portfolio for 2023 and 2024 appears earlier in this thread.
Another objective I have for the SIPP is to replace all of the single company holdings with ITs. Seven out of 19 of my holdings are single company exposures, these are: BATS, CAML, FORT, IMB, L&G, PHNX and VOD.
As you can see, I would be giving up a lot of yield by selling these and the candidates for replacement ITs are very limited. If I wanted to redistribute them into my existing holdings the only very high yielding ITs would be SMIF and NCYF and I'm wary of putting too many eggs in the high yield/high risk fixed income category. The outlook for these funds currently looks quite good but things can change very quickly. VSL was doing very well until the fund decided to liquidate.

Any ideas for achieving this part of my objectives would be most welcome.

Y

[Charlottesquare]

I have just done some calculations. Here are the movements in share price for my portfolio for the past 5 years:

Thanks to Tjh for such a well-presented summary of his portfolio. I wish I could be so organised.

The figures provide a lot of food for thought and I will try to spend more time utilising them.

My SIPP portfolio for 2023 and 2024 appears earlier in this thread.
Another objective I have for the SIPP is to replace all of the single company holdings with ITs. Seven out of 19 of my holdings are single company exposures, these are: BATS, CAML, FORT, IMB, L&G, PHNX and VOD.
As you can see, I would be giving up a lot of yield by selling these and the candidates for replacement ITs are very limited. If I wanted to redistribute them into my existing holdings the only very high yielding ITs would be SMIF and NCYF and I'm wary of putting too many eggs in the high yield/high risk fixed income category. The outlook for these funds currently looks quite good but things can change very quickly. VSL was doing very well until the fund decided to liquidate.

Any ideas for achieving this part of my objectives would be most welcome.

Y

Re ITs what I do is not chase the highest yield achievable but look for acceptable (to me) yields across the sectors/geographies I want to cover, in my case I want average over 4% across the portfolio as as I have the odd one that is near zero (like Scottish Mortgage) so I need a few higher yield ones to catch up. I also want to invest in geographic areas around the world and/or sectors as I choose from time to time. Not all holding are same size, bigger trusts re World, Asia, North America, Scot Mort, Europe, Edin, Middlefield are full holdings, things like Small Cos, Mining, Vietnam , property are circa 1/2 size or still in building stage up to 1/2 size.

I have:
Aberforth Small cos 2.86,
Aberdeen Asian 4.95,
Blackrock Sustainable 4.24,
Blackrock World Mining 6.96,
Edin Invest 3.85,
European Assets 9.99 (know it will drop to 6)
Hend Far East Inc 11.08,
JPM china Gwth & Inc 6.32,
JPM Global Gwth & Inc 3.41,
Middlefield 5.01,
Murray Int 4.37,
NAIT 3.79,
Schroeder Oriental 4.72,
Scot Mort 0.53,
VinaCapital Vietnam 2.34,
Warehouse REIT 7.07

Appreciate above individually do not all qualify as High yield, but I do not worry about individual yield only portfolio yield. I also have a few individual shares in the pot ( Shell, Unilever , Legal and General, Smith DS, Springfield Props, Natwest, Berkshire, Hargreaves Lansdown) with the yield yesterday across the whole at 4.55% (When I just invested in individual companies (a good few years back now) I tended to do the same but wanted over 5% average) A couple of the individual shares are perpetuals (Shell, Unilever) the rest are me taking punts (often badly) believing them currently undervalued but the dividend compensates for the doldrums meantime and I hope they will eventually come good.

So, not all High Yield but the portfolio aim is to overall provide over 4%.