The parameters for an asset to go into to this portfolio are
1. It must provide a secure, above inflation (preferably index linked) income : target 6%
2. Where it is geared, have fixed the borrowings at today's low rates so they are inherently earnings positive in the medium to long term
3. have good liquidity and be easily traded
4. provide goods or services that are needed in good times and bad
5. not trade too far away from asset value
So I have come up with these stocks
BSIF : British Solar Infrastructure Fund
FSFL : Foresight Solar Fund
JLEN : John Laing Environmental
NESF : Nest Energy Solar Fund
TRIG : the Renewable Infrastructure Fund
UKW : UK Wind
~~ (the above backed by government RPI linked subsidies and power prices)
ESP : Empiric Student Property : ~~ lets high quality student property
~~ all the above are channel island companies and so no stamp duty on purchases.
RMDL : RM Secured ~~ new fund specialising in asset backed loans to SMEs : target yield 6.5% after the first year - 4.5% in first year
APAX : APAX Global Alpha ~~ World wide Venture Capital firm which distributes 5% of NAV each year
WAS1 : Wasps (rugger team) 6.5 % retail bond ~~ secured on the Ricoh stadium in Coventry
BUR2 : Burford Capital 6.5 % retail bond ~~ international litigation firm
VENTUS and VENTUS 2 VCTs Ordinary and "C" shares ~~Mature portfolio of wind and hydro businesses with government backed RPI linked revenues these yield above 7% tax free
Code: Select all
Share Bid Offer Divs 2017 div Bid Yield Offer Yield NAV Disc to NAV
BSIF 107.00 108.50 Quarterly 7.25 6.78% 6.68% 105.07 -1.84%
FSFL 107.00 108.00 Quarterly 6.32 5.91% 5.85% 105.60 -1.33%
JLEN 107.25 108.25 Quarterly 6.14 5.72% 5.67% 100.00 -7.25%
NESF 110.50 111.50 Quarterly 6.31 5.71% 5.66% 102.60 -7.70%
TRIG 106.70 106.80 Quarterly 6.40 6.00% 5.99% 100.10 -6.59%
UKW 119.60 119.80 Quarterly 6.49 5.43% 5.42% 107.00 -11.78%
WAS1 103.00 104.55 May & Nov 6.50 6.31% 6.22% n/a
RMDL 101.00 102.50 Jun & Dec 6.00 5.94% 5.85% n/a
APAX 150.25 151.75 Apr & Sept 8.26 5.50% 5.44% 163 7.82%
BUR2 106.10 108.40 Feb & Aug 6.50 6.13% 6.00% n/a
ESP 110.50 110.75 Quarterly 6.00 5.43% 5.42% 105.23 -5.01%
Actually it is not a portfolio in one way as these investments are scattered through the several family portfolios I look after but now comprise from 40-100% of each portfolio. The 100% figure is in the newest JSIPP for a grand child and is only £3,600.
The average income from this portfolio - including a smattering of Ventus - is just about 6% - without Ventus it is 5.90%. But my stocks are showing an increase in value since purchase as I don't buy below a 6% yield.
In addition to this there are investments in the NFU Mutual 'with profits fund' which has consistently delivered smoothed good returns over many years and from which you can withdraw 5% per annum tax free and which is very 'liquid'
Has anyone else got other suitable investments for this portfolio?