Tag Archives: sipp

2020 Review in brief

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So 2020, was a year I didn’t really blog about (sorry for lack of these) mostly as I was flat out with non-investment related activities over the year.

That said, overall a success -> annual performance was good and outperformed my market “indicator”, #VVLSRE at on my main SIPP holdings, which is majority of my Funds under management. At this point (Jan 2020) I am 95% invested, 5% cash portfolio wide, however as per 2019 I have cash reserves I can add to both portfolios before April, and expect to do so, it’s just I have other uses for the reserves in meantim.

SIPP was +13% – To caveat I did add some money (around 20% of portfolio by weight) to portfolio in March following the covid downturn. This was planned to happen as my businesses outperformed in 2019, so allowed a larger business contribution that year. This luckily allowed “many” outperformance.

One sale, many purchases -> Purchased then SOLD #SONG (purchased Feb, sold Aug)-> as predicted would be flat after sale, mostly correct (total return ~ 14% over 6 mo). Correctly moved money to #LGEN (the purchase of this trance returned 45% alone)-> which given I have an average of under 200p I’m happy with holding (it’s about where I expect it now, but expect long term growth).

In terms of personal stock picking, I made the correct calls and was rewarded with EOY returns of +25% on > 3 purchases (#LGEN, #BARC, #PZC). I was reasonably happy with this.

Outformance mostly on IT’s -> Very happy with #FCSS purchases over last 2 years returning near 68% on the year. #SMT is now up 132% on my holdings as a whole -> major impact on Oil holdings (#BP), #NG. kept stable. I am still buying #NG. monthly -> as I have a feeling it will be a major part of portfolio returns in 2022->2030. Major detractors on portfolio were #MER, #HUR. I’m keeping #HUR purely as a lesson for not buying small shares you don’t understand. Thankfully the small losses here offset by the rest of portfolio.

Plans for 2020 for the portfolio >>> Continue adding to IT’s that have outperformed (#SSON, FEET, FCSS). I’m going to hold on adding Fundsmith for a few months as suspect smaller funds will dominate.

I’m also buying #JII monthly, along with #NG. And I’m tempted to add some more $BRK.B when the exchange rates make this attractive.

I also need to add more Chinese purchases, and considering adding the Bailey gifford fund to the #FCSS holding I already have, it’s just as former trades on premium at moment and latter usually at a discount, it’s better to add #FCSS for moment.

Performance graph (courtesy Sharepad) over year on SIPP -> Red is cashline (total Cash invested), Green is total portfolio value inc cash (*amounts removed) -> blue is my portfolio, and yellow shows what would have happend if all my money in a FTSE all share total return tracker. As you can see I’ve gone from trailing that particular benchmark to exceeding it (and you can see the fact the cash invested has gone up from a minimum in April to a max around now (95%). I did’t want to invest all the money I had added at once, so dripped it in slowly to catch any future dops.

ISA was +4% -> underperformance versus indicator, disappointing, but better than a “red” year. No positions SOLD during year. Why? Well ISA is mostly FUND + IT’s and my basket of these over the year underperformed, with one holding being -17.5% over the year. I was adding to these holdings during, and they are now “back” in profit since purchase (originally) in 2018/9 -> but down versus start of year. Hindsite was should have sold some of these for similar shares. ISA also held #HUR in a slightly heigher weighting than SIPP. I’m again not leaving this right now, the trading fees to exit the position would hardly justify the return. I havn’t inluded the graph here, but it’s similar to the SIPP, just not as dramatic.

I’m starting a position in ISA in #NG. as one of 3 single stocks I hold here. On ISA I have done better on stock picking this year, however, #AV. is still trading under my valuation and is still a red markert on the portfolio, ditto #LLOY.

New positions for year in portfolio -> #NG., #SAIN, #ULVR (none existed start of 2019).

The big risk factor in the portfolio is diversity from what I can gather from my analysis, I have hardly any asian or chinese stock in play here -> which I need to rectify in 2021. So I expect to add #FCSS here, along with #JII -> as well as build the #NG. and #ULVR direct holdings here. Why these? I am buying stocks direct to portfolio where I see them being long-term plays to 2030 onwards. I see both Unilever and National Grid being both decent bets for this period.

As ever keep up to date on my trades by following myself on twitter, it’s usually far more up to date than blog on my trades. Oh an as an aside, I’m not a very big investor, but my total FUM over all portfolios (including one I don’t blog about) passed 6 figures this year. Thats a major achivement given the same figure end of last year was just over half that. Yes new money was added and then dripped in monthly, but that only accounted for a small portion of the returns over the year. In hindsite my mistake was not investing ALL the money in end April, but I choose to drip in during the year -> my performance on both ISA and SIPP would easily be +20% more if I had been brave or perhaps reckless doing that.

Mears Group Plc

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As mentioned yesterday this was an investment added as a monthly short-mid term “feeder” investment for my SIPP last month, and will likely remain whilst the price remains attractive and below my max buy price, which would be circa 350p at present (Today this trades at 250p.

So why Mears, and not one of the other companies in sector (social housing repair/maintenance)? The shareprice has fallen heavily since the results & they have now hit the magical Yield figure to make me interested. The recent graph doesn’t look good though:

Graph courtesy of Sharepad.co.uk/Sharescope with their permission

The yield is a pleasant 4.8% with 2.3X cover, and the PE hasn’t been this low since ~1999. Also the annual report makes for reasonable reading and does explain the dip a little. Large shareholders (Primestone) have added funding only in November at £3.31 price, making my purchase at 260p seem very cheap – which has reassured I was not the only person seeing value here. Mears were on my target list prior to their results at this higher price level due to the previous years results being “acceptable”, . This dip probably did make me add them to the portfolio a few months ahead of planning. (I also had XP Power on the list to add this month, but they were near 20% up from when I had marked to purchase, so did not seem appropriate to add at this time from the 2 potential targets).

What I can’t dispute however, is the likely fact that caused this is the operating cash flow is at an all time low (lowest since 2014) – so I consider this given this a little bit of a punt over 12 months, however, this is a company that looks to have better figures than in 2012, but is currently trading at the same book valuation (despite the fact there is clearly a better forward order book (from the annual report). With the long procurement times in this sector, they fit my target list as a long-term likely gaining share with decent dividend prospects.

My prediction is for a recovery over the coming years, but I could be wrong, hence why I am funding this with 10% of net new “income” to the SIPP over the likely the next year, which will represent under a 4% net holding by end of year.

SIPP Portfolio March 2019

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Future blogs will improve the style of this data “dump”, but attached below is the current full portfolio for March, along with cost/values in GBP. I have not included percentages, but my aim is for “fund” to eventually make up 50% of the below, with 50% being self selected shares. We are currently far higher percentage wise on “funds” however at current market values. 25% of the fund should remain as a passive investment with Vanguard Lifestrategy 60 as the bedrock, and “target” to beat for the rest of the SIPP.

Every month £1000 is added to the portfolio, with it being split in last month into the shares marked in italics below with £100 going to each option – which shares get added to do change monthly to rebalance – typically the “less” profitable shares get the topups. I am using interactive investors “regular” trade option to pound cost average down the trades, so trading fees are £1, and stamp duty where effective is 50p. This compares identically to a real time trade of £10 of £1000.

Share/FundOriginal CostCurrent P&L
Vanguard LifeStrategy 60% ACC5249.95311.58
BP3545.53416.60
Capital Gearing Trust2228.251.95
Direct Line952.47-5.42
Fidelity China Special Situations39621.36
Funding Circle SME Income299.14-47.09
Fundsmith Equity T Acc574.9939.80
Milton European Opportunities B ACC900.0116.10
Lindsell Train Japanese Equity B Sterling Hedged2002.55
Mears Group98.07-3.39
Merian UK Smaller Companies Fund R ACC60020.11
Scottish Mortgage Investment Trust Plc985.88-40.91
Smithson Investment Trust Plc365.8613.24
SSE Plc1299.7720.72
Threadneedle European High Yield Bond 3G550-11.19
Woodford Patient Capital Trust Plc
1147.86-42.52
Baillie Gifford Japanese Smaller Co B ACC899.75-14.15
BT843.847.07

Total Profit over last 12 months: ~707.91 GBP (above was from real-time data so may be slightly out!). Not bad for what was a bad year overall for the markets and given ~ 10k of the funding was drip fed over the year it is no wonder that the returns are lower than the top 3 investments, which were bulk purchased at the start.

The return to beat is the Vanguard LifeStrategy piece is the 60% – which returned ~5.9% the previous year as a whole. Given the total portfolio was funded initially mostly on this – as a whole the portfolio has under performed this. However, this excludes for most part any Dividend in past 12 months, making the BP Figures in particular very out. BP comfortably outperformed LifeStrategy, and generated double the return from a smaller investment overall when this is taken into account. As this was my largest “pick” of all the shares outside of the Fund list, this firms up my strategy of picking under priced shares, and holding, and reinvesting Dividends.

The “new” share added this month to the Portfolio is Mears group, following what the market saw as disappointing results. I however found this to be a company that has a high potential for recovery in future, with a potential upside of 30-40% + dividend over next 2 years. I will do a seperate post on the indicators that lead to this conclusion. But I will be adding to this holding over next few months unless the market does recover by 30-40%. This was in my Targets list previously from a search, so I know the fundamentals looked reasonable for this option.

Next month I plan do not plan to add any new share, and likely will not change the distribution in the short term, unless market conditions change. I appreciate I will need to keep re-adding funds back to Vanguard in a few months, as this is dropping below my 25% target for this holding. Changes from last month include re-adding Woodford Patient Capital to monthly top ups following the Woodford Equity reshuffle at a premium (they paid 95p). Given this currently is a 15% discount to NAV, thats month I’m (hopefully) locking in for later. Also have put BT back to the “purchase” list, as both have had recent falls in value – similar reasons.

Overall there are likely too many funds/shares in the portfolio right now, however, it is being 20% weighted with new funds to Japan ahead of Brexit, as I suspect Japan will benefit greatly if the UK economy takes a nosedive. Lindsell Train Japan is also mainly because of their 10% Nintendo holding – I sense this will be a winner, and I can’t easily “drip” feed into the Japanese markets without using a fund. As a gamer don’t bet against Mario, Nintendo and Zelda, as I see Mario and Zelda as a moat that other gaming firms dream of holding.

As a whole the portfolio is also considerably underweight ref: Asian equities, and I need to find a fund for Asia/Australian assets as soon as reasonably possible.

After I have filled that gap – I suspect the next decision are on other “shares” to rebalance to 50% directly held shares. At moment that percentage is ~40% so I have a way to go on that. I also will be too highly weighted to WPCT soon, so will need to switch to another option – however I still feel that I should invest when the fund is trading below my “value” figure.

I’m still unsure about SSE as a longer term holding – but thats a blog for another day.