Bree's HYPish Portfolio - Christmas Review 2017

[Breelander]

An apology: My traditonal rambling monologue usually takes a couple of months to prepare. Unfortunately one of the inevitable 'what's this board for?' 'debates' that HYP-P is all too prone to broke out at a most inconvenient time. The guidance arrived, but sadly too late for my purposes. This year it's just the bare figures I'm afraid.

Now some may think that's a good thing. But for those that enjoy Christmas repeats there's always last year's review. If you're really desperate you can even follow the links and read all of them back to where it all began in 2010 (my reviews, that is, the HYP itself started in 2002).

2016 review: viewtopic.php?f=15&t=1932


This is how my HYP looked at the close of business on 22nd December 2017.

                                           Weight   Weight  Yield   Yield 
Share               Epic    Sector         by Cap.  by div* Hist*   F/cast*
Electrocomponents   ECM   support serv.    8.594%   4.2%    2.0%    2.0%
Persimmon           PSN.L constr&mat       7.955%   7.7%    5.0%    4.0%
BAe Systems         BA.   aero/defence     5.629%   5.1%    3.8%    3.8%
Lloyds 9.75% pref.  LLPD  fixed int.       5.338%   6.8%    5.3%    5.3%
Reckitt Benckiser   RB.   H/hold goods     5.201%   3.0%    2.4%    2.4%
Diageo              DGE   beverage         5.153%   2.9%    2.3%    2.3%
Unilever            ULVR  food prod/proc   4.980%   3.3%    2.7%    2.7%
Shell               RDSB  oil&gas prod.    4.530%   6.5%    6.0%    6.0%
Aviva               AV.   ins. life        4.246%   4.9%    4.9%    4.9%
IMI                 IMI   indust. eng.     4.133%   2.9%    2.9%    2.9%
United Utilities    UU.   util gas/water   3.693%   4.2%    4.8%    4.8%
British Land        BLND  REITs            3.511%   3.8%    4.4%    4.5%
Vodaphone           VOD   tel.mob          3.492%   4.7%    5.6%    5.6%
SSE plc             SSE   util.electricity 3.363%   5.7%    7.1%    7.1%
Glaxo Smithkline    GSK   pharm/biotec     3.337%   4.9%    6.1%    6.1%
Rio Tinto           RIO.L mining           3.298%   3.9%    4.9%    4.9%
Halfords            HFD   retail gen.      3.158%   3.8%    7.8%    5.0%
BT Group            BT.A  tel.fix          2.843%   3.8%    5.6%    5.6%
RSA Insurance Gp.   RSA   ins. gen         2.759%   1.9%    2.9%    2.9%
Lloyds Group        LLOY  banks            2.647%   2.9%    4.0%    4.5%
Marks & Spencer     MKS   retail gen.      2.601%   4.6%    7.4%    7.4%
Pearson             PSON  media            1.968%   2.5%    5.3%    5.3%
De La Rue           DLAR  support serv.    1.758%   1.7%    4.0%    4.0%
Tesco               TSCO  retail food/drg  1.393%   0.5%    0.5%    1.5%
Wood Group (John)   WG.   Oil equip/serv.  1.389%   1.4%    4.1%    4.1%
Centrica            CNA   util gas/water   1.122%   2.3%    8.6%    8.6%
Sainsbury (J)       SBRY  retail food/drg  0.958%   1.2%    4.3%    5.1%
Barclays            BARC  banks            0.789%   0.3%    1.5%    1.5% 
Carillion           CLLN  support serv.    0.164%   2.9%   73.3%    0.0% 
Current Yield*: 22 Dec 2017        median: 3.34%            4.29%   4.05%

* Definitions:
Historic Yield: the trailing twelve-month yield (ttm) - sum of latest declared dividends over past year. May contain dividends from two reporting years.
Forecast Yield: My own conservative forecast for next year. Basically same as Historic, except where there is an explicit dividend policy. My 'forecast' for Persimmon's yield is based on their declared Capital Return Plan. My 'same as last year' forecast for AMFW isn't believed by the market, which currently forecasts around 7%.
Current Yield: Historic Yield / current portfolio value.
Weight by Dividend: calculated using my forecast yield.


Costs: Activity this year was almost none, just a single bed-and-ISA but no actual change in holdings. Total management fees were 0.029% of the portfolio's starting value for the year (at Christmas 2016). Most brokers are introducing fees based on a pecentage of the portfolio. My costs will start to reflect that in 2018 when the new charges for my ISAs (paid in arrears) fall due.


Capital: The HYP rose in value over the year. The Income Unit value rose by 4.96% compared to a rise of 12.0% for the FTSE100.


Income: The HYP's trailing income per unit as calculated from the Trailing Twelve-month yield (ttm) shows a rise of 2.83%. On the basis of money in the bank and actual payment dates the gross dividend/unit for 2017 was 6.191p (2016: 5.957p), against the 6.143p indicated by the ttm yield. After deducting costs the net dividend/unit was 6.152p (2016: 5.906p). The actual income is different from the Trailing income because the ttm yield is based on declaration dates while actual dividends received use the pay dates. Shares (such as BT) that both declare an increased dividend and have declaration and pay dates that straddle the calendar year-end are to blame. Starting in my 2012 review I restated my figures from earlier years in Income Unit and Trailing Yield terms. Note that the 'Income(p) per Unit' figures are calculated by from the 'Trailing Yield' and the 'Unit Price'.

            # Units   Unit   Trailing Income(p)  FTSE      Year-on-year rise (fall)
   Date    (rebased) Price(p) Yield   per Unit   100   Price  Inc./unit  FTSE  Dec.RPI
24 Dec 2007   38.8   136.33   4.95%   6.742    6479.3     -       -       -     4.0%
24 Dec 2008   36.6    84.01   7.92%   6.656    4216.6  (38.4%)  (1.3%) (34.9%)  3.0%  [1]
24 Dec 2009   40.7    96.36   3.35%   3.227    5402.4   14.7%  (51.5%)  28.1%   2.4%  [2]
24 Dec 2010   51.7   107.73   4.11%   4.428    6009.0   11.8%   37.2%   11.2%   4.8%
23 Dec 2011  100.0   100.00   4.89%   4.894    5512.7   (7.2%)  10.5%   (8.3%)  4.8%
24 Dec 2012  103.2   115.30   4.75%   5.474    5954.2   15.3%   11.8%    8.0%   3.1%
24 Dec 2013  103.3   132.38   4.01%   5.314    6694.2   14.8%   (2.9%)  12.4%   2.6%
24 Dec 2014  103.7   133.00   4.00%   5.314    6609.9    0.5%    0.0%   (1.3%)  1.6%
24 Dec 2015  105.0   125.67   4.46%   5.599    6254.6   (5.5%)   5.4%   (5.4%)  1.2%  
23 Dec 2016  105.0   133.78   4.47%   5.974    7058.2    6.5%    6.7%   12.8%   2.2%
22 Dec 2017  105.0   137.73   4.37%   6.143    7592.7    5.0%    2.8%    7.6%   3.9% (Nov)

Notes:
[1] The trailing yield for 2008 looks so high because most dividends are from pre-crisis profits, while the unit price shows the post-crisis fall.
[2] My 2009 drop in income was exacerbated by being over-weight in financials.


Total Return: The capital rose this year but not by as much as the ftse100. Income Units rose from 133.781p to 140.421p. The net dividend/unit was 6.152p. This gives a TR of 12.792p or 9.56% (2016: 11.16%). For comparison, over the same period the FTSE100-TR rose from 5761.3 to 6434.5 or 12.0% (2016: 17.6%).



That's All Folks,

Merry Christmas and a Prosperous New Year,

Bree.

[kiloran]

Only 3 decimal places for "Weighting by Cap"???

Amateur

--kiloran

[Breelander]

I use the previous year's review as the template for the current year to keep the formatting consistent, editing the commentary as appropriate.

... My 'same as last year' forecast for AMFW isn't believed by the market, which currently forecasts around 7%.

Hmmm, seems I missed a bit. That should have been changed to comment on Carillion's startling 73.3% ttm yield, and the obvious reason why my forecast for 2018 is zero.

[Breelander]

Only 3 decimal places for "Weighting by Cap"???

Amateur

--kiloran

ECM, my top holding is 8.593517406571920% of my HYP - that's the most 32-bit Excel can give. If you want to buy me a 64-bit copy I'll willing give it a go

[moorfield]

Lloyds 9.75% pref.  LLPD  fixed int.       5.338%   6.8%    5.3%    5.3%

Oh, Tut Tut, Bree.

Now why do you include those ? (I am genuinely interested, having already been told off several times here.)

[Breelander]

Now why do you include those ? (I am genuinely interested, having already been told off several times here.)

There was a brief window of opportunity in the aftermath of the financial crisis where a yield of over 12% was on offer. At those rates a growing income could be synthesised, as Gengulphus pointed out when one was nominated for GDHYP...

...there is no major practical problem about incorporating an NWBD holding into the HYP as a 'mock 4.25% yield, 4.25% growth share' ... to be achieved by reinvestment of the half of the dividend income...

https://web.archive.org/web/20161111233 ... 58107.aspx

That opportunity has long passed, they're certainly not suitable for adding now. But that's how it got there, since you asked.

[Arborbridge]

Bree,

Well done for another bravura report, showing how it should be done. I am relieved to see you did not abandon us, but decided to report despite the recent changes here.
I'm in awe: I will not be able to report in such detail, but I will do what I can, in January.

All in all, a good result for the year - I am sure, significantly better than mine


Arb.

[Breelander]

Another typo has been brought to my attention. In the (brief) section on capital gain I inadvertently showed the ftse-tr % rise instead of the ftse. My apologies, I had both figures to hand and picked the wrong one. It should have read:

Capital: The HYP rose in value over the year. The Income Unit value rose by 4.96% compared to a rise of 7.57% for the FTSE100.

[Gengulphus]

Since you seem to be dealing with typos:

* Definitions:
Historic Yield: the trailing twelve-month yield (ttm) - sum of latest declared dividends over past year. May contain dividends from two reporting years.

I think that either needs "divided by the current share price" adding, or to be changed into a definition of "Historic Dividend" (and language purists would prefer "Historical" to "Historic"...).

Current Yield: Historic Yield / current portfolio value.

And that will need adjustment accordingly, as it's using "Historic Yield" to mean the total portfolio historical dividends.

And on another minor point:

ECM, my top holding is 8.593517406571920% of my HYP - that's the most 32-bit Excel can give. If you want to buy me a 64-bit copy I'll willing give it a go

Wouldn't make any difference to the precision of the answer - my 64-bit copy of Excel has the same maximum precision. The reason is almost certainly that Excel is using the IEEE-754 standard's "double-precision floating-point numbers" and that standard lays down exactly what the precision of those numbers and of calculation results should be. (If a computer processor cannot perform them as a single operation, then it has to be programmed to do them as a sequence of simpler operations - which will probably be considerably slower, but still produce the same result. That was very relevant 30 years ago, when the standard was first created, but the standard has driven hardware development and by now, any processor which people are at all likely to consider when designing a computer, tablet or mobile phone is going to be capable of performing them as single operations. It's only the smallest and simplest processors, typically used for embedded control systems, that lack that capability.)

Gengulphus