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HYP dividend investing vs World Tracker drawdown
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HYP dividend investing vs World Tracker drawdown
I am about 10 years off retirement, and have had a HYP for about 15 years. I realise the main aim of a HYP is an annuity replacement, with hopefully rising dividend.
I notice my total returns from the HYP are very poor when compared to a world tracker. Obviously, we cannot predict what future returns will be.
It makes me think:
1. During the accumulation phase, that most people would be better off having a world tracker rather than a primarily UK based HYP.
2. In retirement, rather than having a HYP, income comes from drawdown of the world tracker. Some sort of safety margin, as is the case with a HYP, would be needed.
My understanding is that a passive world tracker (e.g. VWRL) usually outperforms a basket of ITs. I have not seen any research to show the opposite.
My understanding is that a HYP is more suited for a Doris type person who wants an annuity replacement.
Any comments please?
VC
I notice my total returns from the HYP are very poor when compared to a world tracker. Obviously, we cannot predict what future returns will be.
It makes me think:
1. During the accumulation phase, that most people would be better off having a world tracker rather than a primarily UK based HYP.
2. In retirement, rather than having a HYP, income comes from drawdown of the world tracker. Some sort of safety margin, as is the case with a HYP, would be needed.
My understanding is that a passive world tracker (e.g. VWRL) usually outperforms a basket of ITs. I have not seen any research to show the opposite.
My understanding is that a HYP is more suited for a Doris type person who wants an annuity replacement.
Any comments please?
VC
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Re: HYP dividend investing vs World Tracker drawdown
veeCodger1 wrote:I am about 10 years off retirement, and have had a HYP for about 15 years. I realise the main aim of a HYP is an annuity replacement, with hopefully rising dividend.
I notice my total returns from the HYP are very poor when compared to a world tracker. Obviously, we cannot predict what future returns will be.
It makes me think:
1. During the accumulation phase, that most people would be better off having a world tracker rather than a primarily UK based HYP.
2. In retirement, rather than having a HYP, income comes from drawdown of the world tracker. Some sort of safety margin, as is the case with a HYP, would be needed.
My understanding is that a passive world tracker (e.g. VWRL) usually outperforms a basket of ITs. I have not seen any research to show the opposite.
My understanding is that a HYP is more suited for a Doris type person who wants an annuity replacement.
Any comments please?
VC
It depends on how you are invested, and what your objectives are. The original idea was to be a substitute for an annuity, where the capital is not lost by paying for the annuity, and to produce an income which at least does better than inflation, hopefully better than inflation.
It also happens that an HYP can outpace the UK index, the FTSE100, but not all the time. A world tracker will do whatever the index or indices that it tracks does. I have regularly published the historical data about my HYP, which I have run in PEP and/or ISA since 1987. Most of the time, dividend income has been reinvested, capital inputs effectively stopped about 2004, but other PEPs were transferred into it for one reason or another, principally because of lack of performance by comparison. I have withdrawn money from it at intervals since 2007, to fund family celebrations and to pay for cruises.
To assess my progress I unitised my portfolio, both as income units and as accumulation units. This allows me to compare my portfolio with both the normal indices and also with the total return versions, although I do not keep records of the values of the total return indices regularly, only of the normal versions of the FTSE100 (UKX) and of the FTSE350 Higher Yield (HIX), and also the FT Ordinary Share Index, The FT30, which goes back to when I began investing and beyond (1958).
I will not give you chapter and verse but merely a few indications.
The Income Unit began with a value of £1 on 21st April 1987 and currently stands at £5.91. The FTSE100 rebased to 1.00 on that date (from 1949.4) is now at 3.47 ( actual 6761.47). Income per unit was 2.86p in that first year, and last year was 31.57p, expected to be lower this year for obvious reasons at 22.83p. The RPI was 101.8 at the outset, and is currently about 295, so you can see that income has easily outpaced inflation.
The accumulation unit also began at £1 on the same date, and currently stands at £28.72. Unitisation takes out the efects of adding capital and of withdrawing income. I also have the various values of IRR for various periods of time, which I can compare with the FTSE100 over the same periods.
Would you like to give us some figures about your own HYP performance?
TJH
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Re: HYP dividend investing vs World Tracker drawdown
tjh290633 wrote:Would you like to give us some figures about your own HYP performance?
TJH
Yes, below are some figures.
I am still in the build-up stage and am re-investing all dividend. Until recently I was making yearly capital contributions. It is held in an ISA.
Dividend
The average yield over the last 10 years is 4.5%.
I have not unitized the dividend received amounts as I am still contributing to the HYP. Perhaps I should do this, althought I suspect it might be complex if one is still contributing.
Each year my HYP yields, as a percentage, a little more than the FTSE100.
Capital
My IRR% with dividend reinvested is 4.7% over 18 years.
I have unitized total return and compared the performance to FTSE100 Total Return (TRIUKX). Sometimes the capital beats the TRIUKX and sometimes it does not.
It is this lack of capital performance that makes me think I would be better off investing in a world tracker e.g. VWRL.
At retirement, income could from the natural yield of a larger pot (VWRl currently yields 1.47%) or through annual drawdown e.g. 4%.
VC
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Re: HYP dividend investing vs World Tracker drawdown
HYP, as proposed by Stephen Bland, is an income strategy to deliver post retirement, in place of other insurance based retirement products, and maybe annuities. It was intended to be bought as a lump sum investment just prior to retirement.
It's advantages are that it can be set up relatively easily by an inexperienced investor, and largely left alone to deliver regular income throughout retirement.
I don't think it was ever intended as an accumulation strategy prior to retirement (although setting up a small HYP prior to retirement is obviously a good way to get used to the approach). In my opinion, a world tracker is a much better way to accumulate a large retirement pot than HYP, and although tjh has been very successful with his HYP over several decades, it would be difficult to argue that HYP is generally going to accumulate a larger pot, than a tracker over an extended time period. After all, most active funds fail to beat a tracker, so why would a HYP run by an amateur investor do any better?
Post retirement however, some would find the the prospect of regularly selling down a tracker to provide an income, to be a difficult process psychologically. What happens in a stock market crash? Would you still feel comfortable to sell down your tracker on a regular basis? HYP, with a suitable reserve policy, should allow you to stop worrying about price crashes and just see the income roll in every month, or year or whatever interval you choose.
I think the current COVID crisis is testing HYP to the limit, with all the dividend cuts, and it may be that the volatility in dividends it has created will put some off the HYP approach. After all, one of the original attractions of HYP was that dividends were supposed to be much less volatile than capital values, but COVID may have put paid to that! The next 6-12 months will show what such a crisis can do to HYP, and whether a sensible reserving policy would have been sufficient to mitigate the sudden fall in dividends, or not. In the 2008-9 financial crisis dividends recovered relatively quickly and a sensible reserving policy would probably have seen little impact on regular retirement income. The same may or may not be true for the current COVID crisis.
The other approach is of course income IT's . Certainly, so far in this pandemic, they have shown, with their reserving policies, to be very capable of mitigating the recent high volatility of dividends.
FD
It's advantages are that it can be set up relatively easily by an inexperienced investor, and largely left alone to deliver regular income throughout retirement.
I don't think it was ever intended as an accumulation strategy prior to retirement (although setting up a small HYP prior to retirement is obviously a good way to get used to the approach). In my opinion, a world tracker is a much better way to accumulate a large retirement pot than HYP, and although tjh has been very successful with his HYP over several decades, it would be difficult to argue that HYP is generally going to accumulate a larger pot, than a tracker over an extended time period. After all, most active funds fail to beat a tracker, so why would a HYP run by an amateur investor do any better?
Post retirement however, some would find the the prospect of regularly selling down a tracker to provide an income, to be a difficult process psychologically. What happens in a stock market crash? Would you still feel comfortable to sell down your tracker on a regular basis? HYP, with a suitable reserve policy, should allow you to stop worrying about price crashes and just see the income roll in every month, or year or whatever interval you choose.
I think the current COVID crisis is testing HYP to the limit, with all the dividend cuts, and it may be that the volatility in dividends it has created will put some off the HYP approach. After all, one of the original attractions of HYP was that dividends were supposed to be much less volatile than capital values, but COVID may have put paid to that! The next 6-12 months will show what such a crisis can do to HYP, and whether a sensible reserving policy would have been sufficient to mitigate the sudden fall in dividends, or not. In the 2008-9 financial crisis dividends recovered relatively quickly and a sensible reserving policy would probably have seen little impact on regular retirement income. The same may or may not be true for the current COVID crisis.
The other approach is of course income IT's . Certainly, so far in this pandemic, they have shown, with their reserving policies, to be very capable of mitigating the recent high volatility of dividends.
FD
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Re: HYP dividend investing vs World Tracker drawdown
I think to deal with the psychology, you would have to have a rule. Tell yourself you will sell 1% (or whatever) of your portfolio on the first Monday of March, June, September and December or whatever.
I think then it becomes quite easy. I am still in accumulation but that is what I do now with stock I am awarded in my employer and what I plan to do in retirement.
I think Fundsmith even offer this as a service. Of course outside an ISA/SIPP the tax treatment gets a bit fiddly.
I think then it becomes quite easy. I am still in accumulation but that is what I do now with stock I am awarded in my employer and what I plan to do in retirement.
I think Fundsmith even offer this as a service. Of course outside an ISA/SIPP the tax treatment gets a bit fiddly.
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Re: HYP dividend investing vs World Tracker drawdown
A couple of observations
I think you need to be careful of making assumptions based on the past. For example the statement that all world trackers like VWRL usually outperform investment trusts. The reason this has happened recently is that a large part of worldwide market caps is US shares (a lot more than say US share of world GDP) and the strong performance of US shares has largely been down to the massive rise in a few stocks (FANGS). Most Investment Trusts will not have anticipated this trend and will have been underweight FANGS. Hence most ITs will have trailed VWRL.
Whether that gives a guide to the future, who knows.
Given that a wide spread of shares gives a lower risk of deviating from the norm, Trackers, ITs and a basket of HYP individual shares are increasingly risky in that order. Even if you put all your money in a single IT (Scottish Mortgage) it will be spread over 80 or so companies shares, a lot more that an HYP individual shares selection. I am not for a moment suggesting putting all your money in SMT!
I reiterate the point another poster made, that if reliability of income is important, ITs will be better at that than any alternative due to their ability to smooth distributions with reserves. That may be more comforting than trying to do the same with your own cash reserves.
I think you need to be careful of making assumptions based on the past. For example the statement that all world trackers like VWRL usually outperform investment trusts. The reason this has happened recently is that a large part of worldwide market caps is US shares (a lot more than say US share of world GDP) and the strong performance of US shares has largely been down to the massive rise in a few stocks (FANGS). Most Investment Trusts will not have anticipated this trend and will have been underweight FANGS. Hence most ITs will have trailed VWRL.
Whether that gives a guide to the future, who knows.
Given that a wide spread of shares gives a lower risk of deviating from the norm, Trackers, ITs and a basket of HYP individual shares are increasingly risky in that order. Even if you put all your money in a single IT (Scottish Mortgage) it will be spread over 80 or so companies shares, a lot more that an HYP individual shares selection. I am not for a moment suggesting putting all your money in SMT!
I reiterate the point another poster made, that if reliability of income is important, ITs will be better at that than any alternative due to their ability to smooth distributions with reserves. That may be more comforting than trying to do the same with your own cash reserves.
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Re: HYP dividend investing vs World Tracker drawdown
.
i have been attempting to increase my investment pot all my life , this is ongoing , i dont think about build/drawdown phases..
if i need cash or decide to spend , i sell some investments .
my portfolio is a mix of IT's , ETF's and some individual shares .
i have been attempting to increase my investment pot all my life , this is ongoing , i dont think about build/drawdown phases..
if i need cash or decide to spend , i sell some investments .
my portfolio is a mix of IT's , ETF's and some individual shares .
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Re: HYP dividend investing vs World Tracker drawdown
veeCodger1 wrote:Capital
My IRR% with dividend reinvested is 4.7% over 18 years.
I have unitized total return and compared the performance to FTSE100 Total Return (TRIUKX). Sometimes the capital beats the TRIUKX and sometimes it does not.
It is this lack of capital performance that makes me think I would be better off investing in a world tracker e.g. VWRL.
At retirement, income could from the natural yield of a larger pot (VWRl currently yields 1.47%) or through annual drawdown e.g. 4%.
VC
Here for comparison is my IRR since various year ends:
Since Acc Unit IRR
26-Dec-96 3.39 9.22%
01-Jan-98 4.86 7.96%
31-Dec-98 5.89 7.39%
30-Dec-99 6.85 6.99%
31-Dec-00 6.68 7.48%
31-Dec-01 6.43 8.10%
31-Dec-02 5.23 9.80%
31-Dec-03 6.38 9.13%
31-Dec-04 7.59 8.55%
30-Dec-05 9.69 7.40%
31-Dec-06 12.25 6.18%
31-Dec-07 12.41 6.56%
31-Dec-08 7.41 11.73%
31-Dec-09 10.24 9.64%
31-Dec-10 12.32 8.65%
31-Dec-11 13.45 8.59%
31-Dec-12 15.80 7.56%
31-Dec-13 19.56 5.48%
31-Dec-14 20.34 5.72%
31-Dec-15 21.42 5.79%
31-Dec-16 24.37 3.98%
29-Dec-17 26.70 2.30%
31-Dec-18 24.06 8.37%
31-Dec-19 28.84 -0.35%
31-Dec-20 27.01 36.45%
13-Mar-21 28.72
What I did was take the value of the accumulation unit at the end of each year and compare it with the current value. Then apply the XIRR function to the two values. As you can see, it goes up and down as the market fluctuates. Going back 18 years takes us to the end of December 2002 or 2003. The IRR from those dates is over 9%. The highest figure, from 2008, reflects the big fall in the market at that time. The lowest figure, from 2019, reflects the higher level of the market at that time, the normal index being about 12% higher on 31st December 2019 at 7,542.44.
Indexation is not too difficult, if you work on a month-by-month basis and calculate the number of income units bought, from the combination of regular subscriptions and accumualated dividends each month. I did it retrospectively over a 20-year period and then maintained it going forward, so that I had the income units as well as the accumulation unit values for each month, plus the dividend per unit figures.
TJH
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Re: HYP dividend investing vs World Tracker drawdown
funduffer wrote:I think the current COVID crisis is testing HYP to the limit, with all the dividend cuts, and it may be that the volatility in dividends it has created will put some off the HYP approach. After all, one of the original attractions of HYP was that dividends were supposed to be much less volatile than capital values, but COVID may have put paid to that! The next 6-12 months will show what such a crisis can do to HYP, and whether a sensible reserving policy would have been sufficient to mitigate the sudden fall in dividends, or not. In the 2008-9 financial crisis dividends recovered relatively quickly and a sensible reserving policy would probably have seen little impact on regular retirement income. The same may or may not be true for the current COVID crisis.
The current crisis is nowhere near as bad as the 2008-9 crisis, as far as dividend income is concerned, for me at least. The big fall in income came in 2009-10, when my dividend income fell by about 45%. This financial year (2020-21) and shows every sign of recovering quickly. The previous time I had to make quite a lot of changes to my portfolio to help recovery, this time virtually none so far.
TJH
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Re: HYP dividend investing vs World Tracker drawdown
tjh290633 wrote:
What I did was take the value of the accumulation unit at the end of each year and compare it with the current value. Then apply the XIRR function to the two values. As you can see, it goes up and down as the market fluctuates. Going back 18 years takes us to the end of December 2002 or 2003. The IRR from those dates is over 9%. The highest figure, from 2008, reflects the big fall in the market at that time. The lowest figure, from 2019, reflects the higher level of the market at that time, the normal index being about 12% higher on 31st December 2019 at 7,542.44.
Indexation is not too difficult, if you work on a month-by-month basis and calculate the number of income units bought, from the combination of regular subscriptions and accumualated dividends each month. I did it retrospectively over a 20-year period and then maintained it going forward, so that I had the income units as well as the accumulation unit values for each month, plus the dividend per unit figures.
TJH
Sorry if this is a pain, but I'd be grateful to know how you 'unitise' and document these portfolio performances. Perhaps there's an explanatory post to which I can be directed? I'm just now looking at another 'putting my affairs in order' procedure, and this would be helpful....
Thanks,
Uncle
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Re: HYP dividend investing vs World Tracker drawdown
I have about 8 years to go, but hope to be ready in 6 with the last 2 yrs for building a cash buffer.
Although I was no longer convinced of the merits of a HYPish portfolio for me, I was very reluctant to leave income behind totally and go to trackers or ETF's.
I have found I am much happier in a limited number of 7 IT's (all beating VWRL over a 5 year period) with dividends of between 2 and 4% (pf 3%), which are providing about 30% less income than I was getting previously, but on the plus side with growth more than the lost income, which is fine in my accumulation stage.
Maybe some can turn off to a sea of red and the volatility of single shares, but I find a little green in my portfolio helps me sleep better.
When I reach retirement I hope to be able to leave the portfolio alone and just top slice, but the option of moving to more income focused IT's is also a possibility during a market correction.
I realise my answer is not helpful as a high yield strategy, but meets my aims of a quality/reliable yield + growth.
Although I was no longer convinced of the merits of a HYPish portfolio for me, I was very reluctant to leave income behind totally and go to trackers or ETF's.
I have found I am much happier in a limited number of 7 IT's (all beating VWRL over a 5 year period) with dividends of between 2 and 4% (pf 3%), which are providing about 30% less income than I was getting previously, but on the plus side with growth more than the lost income, which is fine in my accumulation stage.
Maybe some can turn off to a sea of red and the volatility of single shares, but I find a little green in my portfolio helps me sleep better.
When I reach retirement I hope to be able to leave the portfolio alone and just top slice, but the option of moving to more income focused IT's is also a possibility during a market correction.
I realise my answer is not helpful as a high yield strategy, but meets my aims of a quality/reliable yield + growth.
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Re: HYP dividend investing vs World Tracker drawdown
tjh290633 wrote:Here for comparison is my IRR since various year ends:Since Acc Unit IRR
26-Dec-96 3.39 9.22%
01-Jan-98 4.86 7.96%
31-Dec-98 5.89 7.39%
30-Dec-99 6.85 6.99%
31-Dec-00 6.68 7.48%
31-Dec-01 6.43 8.10%
31-Dec-02 5.23 9.80%
31-Dec-03 6.38 9.13%
31-Dec-04 7.59 8.55%
30-Dec-05 9.69 7.40%
31-Dec-06 12.25 6.18%
31-Dec-07 12.41 6.56%
31-Dec-08 7.41 11.73%
31-Dec-09 10.24 9.64%
31-Dec-10 12.32 8.65%
31-Dec-11 13.45 8.59%
31-Dec-12 15.80 7.56%
31-Dec-13 19.56 5.48%
31-Dec-14 20.34 5.72%
31-Dec-15 21.42 5.79%
31-Dec-16 24.37 3.98%
29-Dec-17 26.70 2.30%
31-Dec-18 24.06 8.37%
31-Dec-19 28.84 -0.35%
31-Dec-20 27.01 36.45%
13-Mar-21 28.72
What I did was take the value of the accumulation unit at the end of each year and compare it with the current value. Then apply the XIRR function to the two values. As you can see, it goes up and down as the market fluctuates. Going back 18 years takes us to the end of December 2002 or 2003. The IRR from those dates is over 9%. The highest figure, from 2008, reflects the big fall in the market at that time. The lowest figure, from 2019, reflects the higher level of the market at that time, the normal index being about 12% higher on 31st December 2019 at 7,542.44.
Indexation is not too difficult, if you work on a month-by-month basis and calculate the number of income units bought, from the combination of regular subscriptions and accumualated dividends each month. I did it retrospectively over a 20-year period and then maintained it going forward, so that I had the income units as well as the accumulation unit values for each month, plus the dividend per unit figures.
TJH
Am I the only reader who does not understand the IRR? What does an IRR of 36.45% at 31 December 2020 tell us?
Dod
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Re: HYP dividend investing vs World Tracker drawdown
UnclePhilip wrote:Sorry if this is a pain, but I'd be grateful to know how you 'unitise' and document these portfolio performances. Perhaps there's an explanatory post to which I can be directed? I'm just now looking at another 'putting my affairs in order' procedure, and this would be helpful....
Uncle
This is rather incomplete and based on obsolete posts in The Motley Fool, but may help: http://lemonfoolfinancialsoftware.weebl ... folio.html
I'll try to update it and clean it up sometime
--kiloran
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Re: HYP dividend investing vs World Tracker drawdown
Dod101 wrote:Am I the only reader who does not understand the IRR? What does an IRR of 36.45% at 31 December 2020 tell us?
Dod
Yes, that is the rate of return from 31st Dec 2020 to the present day. Since that is less than 3 months and the market has risen, you get an exaggerated figure from XIRR. Really best confined to periods longer than a year.
TJH
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Re: HYP dividend investing vs World Tracker drawdown
kiloran wrote:UnclePhilip wrote:Sorry if this is a pain, but I'd be grateful to know how you 'unitise' and document these portfolio performances. Perhaps there's an explanatory post to which I can be directed? I'm just now looking at another 'putting my affairs in order' procedure, and this would be helpful....
Uncle
This is rather incomplete and based on obsolete posts in The Motley Fool, but may help: http://lemonfoolfinancialsoftware.weebl ... folio.html
I'll try to update it and clean it up sometime
--kiloran
Thanks, Kiloran. That explains it without me having to reinvent the wheel.
Just one comment, I do it monthly, rather than on the day that dividends are received, using the previous month's unit value to calculate the number of new units. That is just because I am idle, but it is good enough for my prurposes.
TJH
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Re: HYP dividend investing vs World Tracker drawdown
tjh290633 wrote:kiloran wrote:UnclePhilip wrote:Sorry if this is a pain, but I'd be grateful to know how you 'unitise' and document these portfolio performances. Perhaps there's an explanatory post to which I can be directed? I'm just now looking at another 'putting my affairs in order' procedure, and this would be helpful....
This is rather incomplete and based on obsolete posts in The Motley Fool, but may help: http://lemonfoolfinancialsoftware.weebl ... folio.html
I'll try to update it and clean it up sometime
Thanks, Kiloran. That explains it without me having to reinvent the wheel.
Just one comment, I do it monthly, rather than on the day that dividends are received, using the previous month's unit value to calculate the number of new units. That is just because I am idle, but it is good enough for my prurposes.
But surely, dividends received and retained within the portfolio do not affect the number of Accumulation Units, which I thought was the measure in your original post on this subject?
viewtopic.php?p=395332#p395332
tjh290633 wrote:What I did was take the value of the accumulation unit at the end of each year and compare it with the current value. Then apply the XIRR function to the two values.
Have I missed something?
Ian
Last edited by IanTHughes on March 14th, 2021, 12:40 pm, edited 1 time in total.
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Re: HYP dividend investing vs World Tracker drawdown
tjh290633 wrote:Dod101 wrote:Am I the only reader who does not understand the IRR? What does an IRR of 36.45% at 31 December 2020 tell us?
Dod
Yes, that is the rate of return from 31st Dec 2020 to the present day. Since that is less than 3 months and the market has risen, you get an exaggerated figure from XIRR. Really best confined to periods longer than a year.
TJH
I see, thanks. It would help my simple mind at least, if the IRR numbers were all to be dropped one line, then it would make sense to me. Mind you I doubt that the market has risen anything like 36%, not my portfolio anyway.
Dod
Last edited by Dod101 on March 14th, 2021, 12:41 pm, edited 1 time in total.
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Re: HYP dividend investing vs World Tracker drawdown
kiloran wrote:UnclePhilip wrote:Sorry if this is a pain, but I'd be grateful to know how you 'unitise' and document these portfolio performances. Perhaps there's an explanatory post to which I can be directed? I'm just now looking at another 'putting my affairs in order' procedure, and this would be helpful....
Uncle
This is rather incomplete and based on obsolete posts in The Motley Fool, but may help: http://lemonfoolfinancialsoftware.weebl ... folio.html
I'll try to update it and clean it up sometime
--kiloran
Here's another thread from Motley Fool which may help
https://web.archive.org/web/20161104231 ... sort=whole
--kiloran
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Re: HYP dividend investing vs World Tracker drawdown
Dod101 wrote:tjh290633 wrote:Dod101 wrote:Am I the only reader who does not understand the IRR? What does an IRR of 36.45% at 31 December 2020 tell us?
Dod
Yes, that is the rate of return from 31st Dec 2020 to the present day. Since that is less than 3 months and the market has risen, you get an exaggerated figure from XIRR. Really best confined to periods longer than a year.
TJH
I see, thanks. It would help my simple mind at least, if the IRR numbers were all to be dropped one line, then it would make sense to me. Mind you I doubt that the market has risen anything like 36%, not my portfolio anyway.
Dod
Mind you I doubt that the market has risen anything like 36%, not my portfolio anyway.
No, it doesn't need to. The IRR gives you what the rate of return is for the whole year, assuming that the rate of increase carries on being as good as Dec 2020 until now. Note, it isn't that the 36% the rate for the year prior to Dec 2020, which I believe is what you may have thought.
IRR numbers are misleading over short periods of time.
Arb.
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Re: HYP dividend investing vs World Tracker drawdown
IanTHughes wrote:But surely, dividends received and retained within the portfolio do not affect the number of Accumulation Units, which I thought was the measure in your original post on this subject?
Have I missed something?
Ian
I'm confused too. The only way in which the number of accumulation units would vary is if cash were withdrawn or added. Maybe that's what happened? Otherwise, only the price varies.
We'll have to see what TJH says.
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