The 2016/17 (Tax) Year Performance

The tax year ended this month, and I have now had a chance to update my performance. It has taken longer than normal as I threw every last penny of spare cash I had into my ISA before the year end, and I knew I would have to take some back out before the end of the month but I like to set myself the challenge.

Although I didn’t put anywhere near as much as I would have liked to in my ISA, overall it was still a very good year. So first of all, what did the various indices do, and how did they perform to give some idea of progress. This is the first year that I have also included VHYL and VWRL so I don’t have that much information in (I could easily go back but I am too lazy :)).

Remember, I calculate my returns based on the assumption that all contributions went in on day 1, so this really does hurt the performance of portfolio’s where the contribution is still significant compared to the size of the portfolio.

Note: I have updated the performance figures after discovering an error in my calculations which meant I was under reporting performance.

The Benchmarks

Index Performance
FTSE-100 20.4%
FTSE-250 14%
FTSE-All 19.3%
S&P500 17.5%
Dow Jones 15.3%
VWRL 30.4%
VHYL 28.2%

Well, that was certainly not what I was expecting. The VHYL and VWRL have really shot up, I am not sure if I got incorrect data historically for the end of last year, or if they really did shoot up that much. It will certainly be interesting to see how things pan out over the next few years.

So how did my various portfolios do over the last tax year?

Company Pension

I wasn’t expecting anything much from this over the year, as I only started paying into this at the start of the tax year, so my contributions each month are huge compared to the overall size of the portfolio. The funds are limited that I can select, but the website has a useful little view that shows what is contributions and what is growth.

Performance: 0.8%

Really? Well sadly yes based on the way I track my performance. Oh well – I expect this will continue to show bad returns (or good if there is a bear market!). Right now, this doesn’t bother me – the main thing is that I am throwing money into the market, regardless of what is going on. Every month before my pay even gets to my bank account, the pension has new funds added.

Personal Pension & ISA 1

So, how did my IFA do? I am sure this will be of interest to many people – was it worth it for him to take a cut of every single contribution I make? Well before I disclose the numbers, I did actually meet up with him back in March, and we reviewed the whole portfolios. That, and previous overall years performance, I think I will make another post on that to provide some of the insights.

Personal Pension: 18.6% 22.8%

ISA 1: 10.2%11.4%

So given the make up of the portfolio (I will update my portfolio page at some point this week!) I am happy with this. No, it is not as high as Vanguard but they are not bad performances.

ISA 2 (also IFA managed)

So the second ISA is the most complicated with 3 sub portfolio’s with different goals inside it. For simplicity here I am tracking only the overall performance, remembering that it also pays out income monthly. The contributions still form a significant amount of the total value of the portfolios as it goes in each month, so I continue to expect this to under perform based on my method for tracking for some years.

Performance: 4.3%4.5%

So total growth of the portfolio was not great, it did throw out a trailing 1% dividend (based on total paid over the year, and the year ending value, so again probably under representing). Given that the main aim of the largest sub portfolio is to pay our bills in retirement, this is making slow but steady progress towards that. Right now this needs to go up at least 10 fold – a huge ask over the next 8 years, but with tax refunds, any pay rises and so on going into it, I am hopeful. Its a big ask, and I honestly don’t know if it will make it or not, but you have to try!

My actively managed ISA

So last, and by no means least, how did my actively managed ISA do? I have been trying to move this to have less individual shares, and a combination of Investment Trusts and Trackers. This is still very much work in progress and will reduce the potential performance (or stop it from being so bad maybe?), but as the value of the portfolio has increased over the years I am getting less comfortable with quite such a large portfolio – I know I should have faith in my own ability but when you can read so much out there that shows passive is most likely to win, who am I to argue.

Performance: 30.9%44.7%

The dividend income was reinvested in the portfolio which helps to bolster the returns. The trailing yield was a shade under 4% which would match with the 4% SWR so if that keeps up it will put me in a good position.

I only started tracking the monthly performance of the portfolio back in June ’15 (around the time I found Mr Money Mustache) although I have tracked the annual returns for longer. I look back at where I was in 2012 and the portfolio then compared to now and I find it really hard to believe that less than 5 years later it has grown so far. I’ve evened out the growth over the years when I only tracked on the year basis, but I thought to share the progress to encourage people. It really is slow going to start with and took a long time to gain traction, and then my gamble on the Russian gold miner really turbo charged the returns along with some of my other AIM investments. I will reiterate, this is not an approach I recommend!

ISAPerformance

Going forwards there won’t be any more contributions to this portfolio for a number of years but the value should continue to go up as dividends keep getting reinvested.

Premium Bonds

So for a bit of fun I thought I would also look at the returns on my premium bonds holding. In total it returned a shade under 1.3% for the year. Whilst not huge, and I haven’t had a “win” for a while, I can live with that tax free rate of return.

Conclusion

Overall I am content with the performance over the last year, it feels like I have made huge strides towards FI. I still feel that June 2025, although a long way off, is going to be a challenge. This is not going to stop me from trying!

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Author: fireinlondon

Fighting the high cost of living in London

4 thoughts on “The 2016/17 (Tax) Year Performance”

  1. Wow a 30% on the actively managed ISA is incredibly impressive!!! I wouldn’t mind letting you manage some of my money if you can do that 🙂 Although Russian mining probably would have made me a little nervous!!!

    Like

    1. Hi MSM,

      Haha – thanks! Yes, my best year yet by far – but looking back over the last 5 years I have only failed to beat the FTSE-100 once, but I will wait with interest to see how VHYL or VWRL do!
      Haha afraid I wouldnt (yet!) be willing to manage others money – I am happy to take some very high risks with my money, but as you say, not everyone would be comfortable with a Russian mining company! I doubt I will ever get that level again as I am building up my level of Investment Trusts and Trackers!
      Cheers,
      FiL

      Liked by 1 person

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