The 2017/18 (Tax) Year Performance

So, the end of the tax year has passed and I have pushed as much as possible into the various tax efficient wrappers (ISAs & pensions) to put me in as strong a position as possible.

So first of all some of the stats for the year:

The Benchmarks

Index Performance
FTSE-100 -1.8%
FTSE-250 2.7%
FTSE-All -0.9%
S&P500 13.1%
Dow Jones 18.7%
VWRL 1.2%
VHYL -4.1%
GBP/USD 12.2%

So really a fairly mixed bag out there. The US did rather well last year but not enough to make any real impact on VWRL. The pound strengthened quite considerably over the year (just mood swings around Brexit, or something more – who knows).

So if you had followed the Go T’ Pub ISA approach and just shoved money into VWRL you may have been very disappointed! Now let’s get into a bit more detail.

Company Pension

So the company pension is still, in the grand scheme of things, in its early life. The amount going in each month is still a (relatively) large amount compared to the size of the pot. Ultimately the overall value goes up so I don’t really take much stock on the growth numbers for this. The main thing is that my company put a lot of cash into it, so free money I won’t turn down.

Performance: -0.8%

So down a fraction. Not that bad given the UK markets, but this is a fairly global portfolio (not in the standard fund!). To be honest, I really am not too worried about this the money is going up each month and it all helps. It is too soon (for me anyway) to get any meaningful performance so I will just continue to watch and wait. Let’s see how it looks in a few years time.

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?

Personal Pension: 12.4%

ISA 1: -1.1%

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

The first obvious one to me is that my IFA is far better with larger value pots than smaller. I will have to talk to him about the poor performance again in my ISA.

Overall the pension is very good especially as this includes a large injection of more funds right before the tax year end. The cynics out there may say he has underperformed the US market, however only about 20% of my pension allocation with him is in the US market.

If he keeps this performance up then by the time I get to 55 I will breach the LTA, even with the increases, and assuming I stop putting any more in when I hit 50. A nice place to be, but it won’t stop me contributing now, I will worry about the LTA as and when it is likely to affect me.

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: -3.1%

Ok so a poor performance there really. However, it also threw out almost 2% trailing dividend. The main thing for me here is that it is achieving what I wanted out of it – this is not a growth portfolio but a cash flow portfolio.

It is now starting to throw out a noticeable amount of money each month which helps given the ongoing battles I have with HMRC and their inability to work out how much tax I should pay.

Go T’ Pub ISA

So, how did the GTP ISA do, compared to VWRL’s 1.2%?

Performance: -1.0%

Well this was the first year of running so wildly affected by the in month swings, and also of course the impact of CTY, so a comparison against VWRL direct is a little unfair yet.

The funny thing is, do I really care? The short answer is no! CTY is sitting there as my cash reserve – as long as it grows faster than my actual cash, and after a couple of years never goes below the original value of cash I will be happy.

VWRL will just keep ticking up and throwing out money for me to go to the pub (or out for a meal etc.) and I won’t really change what goes in (I would like to increase it at some point as the ideal world would let me fill it completely) so I will carry on firing and forgetting. Very nice 🙂

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.

After the last rebalance I am almost there so I can play again, more trackers to be purchased.

Performance: 4.9%

The dividend income was reinvested in the portfolio which helps to bolster the returns. The trailing yield was a shade under 4% as it was last year, which indicates to me that I should probably think about a maximum of 3.5% withdrawal rate.

So whilst this didnt repeat last years stellar returns, it continues to move upwards, and at a faster rate than my spreadsheet plans for (4%) which is nice. Whilst I would like this to go up faster (not necessarily the 44%, but maybe 10%), it is still going up.

The dividend income this year was not as much as I would have liked, but still more than last year, even with the rebalancing. The gap between contributions and value continues to grow (in the right way!) as dividends get reinvested so I continue to be happy with this.

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 0% – no winnings at all for the year yet again.

Not good, but then these do form part of my cash reserves so preservation of capital is important.

Conclusion

If I look at where I finished the year, I really can’t believe quite how well the values have gone up over one tax year. When I set my (undisclosed) target of what I wanted the fund to get to, I never once thought I would get there.

And I didn’t get there, however I wasn’t that far off which amazes me. If I continue to build wealth at this rate I will hit my number by 2025, regardless of what my spreadsheet tells me!

 

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Rebalancing the portfolio

So as the new (tax) year started it was time to do further rebalancing of my self managed ISA.

Having grown to a size where I was no longer comfortable having that amount of individually owned shares, I rebalanced last summer to increase the amount I held in trackers and Investment Trusts.

I had enough trading credits (with the way iii has changed their fees) to do a couple of purchases and try and shift things round.

Looking at my handy little spreadsheet I could see that I was under invested on both Investment Trusts and trackers – with Investment Trusts being the most underweight.

With that said, I decided to chuck all the cash that had built up into my chosen Investment Trusts to try and bring things up.

Purchase 1 – Scottish Mortgage

So this was already a large holding in my portfolio, and I added further to it at £4.51 per share bringing my average price paid up to £3.51. Why add more to this if it was already one of my larger holdings? Simply as it is a (in my opinion) very well run IT, and has been giving some very good returns since I first bought it. Granted the yield is low at present (sub 1%) which is far from ideal, but if it continues to grow I will be happy.

Secondly, they have a number of unlisted investments which I am also keen to get exposure to which usually helps my overall returns.

Overall, even with the most recent purchase, I am up over 30% on the holding, without the recent purchase it was over 50%. I have this IT set as dividend reinvesting as well so over the next 5 – 10 years this should continue to grow nicely.

Purchase 2 – JFJ

So my trackers exclude Japan, and my JFJ holdings were very small so to try and gain a bit more exposure I chose to top this holding up. Over the last 5 years it has more than doubled and so I brought it up to a more balanced level with some of the other ITs (Russia and NCYF are lower). This is another fire and forget IT and it will only come under review once my portfolio is under review again.

Why ITs and not the Trackers?

Two very simple reasons. Firstly, the ITs were more under represented than the trackers, and so based on the simple rules the IT won the investment.

Secondly, the tracker that is due to be bought next is the S&P500. Whilst I try not to time the market, it feels high to me so anything I could do to delay the better. I can no longer avoid it however, so the next time I will have to buy the S&P500 tracker, but oh well.

Onwards and upwards as they say!

Mar ’18 Go T’ Pub ISA Performance

I continue to love the simplicity of this ISA – fire and forget, no worries about individual shares, it just does what the market does! This really is the ultimate in easy investing for me – virtually no fees (Ok, £1.50 for the trade), no ongoing charges. Bliss!

For the full details over all of the portfolios as a summary please refer to the full month end report – this is specifically looking at what has happened on the Go T’ Pub portfolio only.

So, what activity did we have this month?

  • New Funds added. As always, the regular contribution of £1,100 has gone in however I added an additional £140 to this, taking it up to £1,240 as I wanted to put as much as possible into the tax shelter – further reducing my cash reserves
  • No dividends were paid out sadly, so no income generated
  • No withdrawal was made
  • Left over cash from the previous purchases was left in

So once again a very quiet month just ticking along and the number of units keep ticking up.

Overall performance: The starting value was £16,451.84, with £1,240 in new funds added, and £0 withdrawals, meaning total starting value was £17,691.84. We finished the month on £17,206.75 so the total performance across the whole portfolio was -2.74%.

Ok so it went down – that just means more chance of more VWRL 🙂

So, lets get into the detail…..

VWRL ETF

So the standard units were purchased – however with the extra cash meant that I could purchase a further 20 units at £60.09 per unit, making the average cost per unit of £61.50. So it just keeps ticking along and increasing the number of units which all helps!

I did do a spreadsheet showing how many VWRL I would have on the assumption of 18 each month, so an extra 2 will give me about an extra 50p each quarter. Not to be sniffed at!

So – how does this now look as the graph data slowly builds up?

201803gtpub

So after all the great hope and showing value going above contributions it is wiped out in one month and drops below my contributions. Oh well, it is early days and why you so often read literature saying you should be invested for at least 5 years!

It has finally ticked over the 200 units now so I am hoping that the dividend will kick in next month and hopefully be close to £50 but I will wait and see. I will resist using it as beer tokens and aim to reinvest it!

Cash vs. Investment Trust

So for me this was the more interesting part of the overall approach – I transferred 50% of my last remaining cash ISA over to an IT and will be tracking the two together to see how things perform. Remember – you really, REALLY shouldn’t do this. Keep cash on hand, be able to sleep knowing your bills would be covered etc.

So, how is it looking?

Cash Now stands at £5,128.44
S&S ISA IT Now stands at £5,106.00

It looks like my Cash ISA rate has been increased as there was a huge payment again this month – so much so that the graph line even seems to have moved a bit! The CTY seems to be suffering, even with an additional 12 units from the last dividend. Not ideal by any stretch, and further evidence that you should NOT do this approach.

Whilst I view this as disappointing, things have been on a tear, and as I continue to reinvest the dividends it won’t take long to go back above. Of course, this is reliant on me not needing the cash – if you had to sell out this would hurt.

How does the rollercoaster look now? Well, very much like this:

201803cashvsstock

Slowly pulling back up to break even point despite the recent drop, but hopefully another couple more dividend payments and reinvest and it will start pulling away.

Conclusion

The simplicity of this is still superb for me and highly recommended from my view for anyone just starting out. Fire and forget and come back in a year or two. I can see the appeal of funds here over ETFs, as you don’t need to keep logging in to change the purchase, as you buy partial units.

Mar ’18 Performance

So the month has ended and a bit more volatility than we have seen for a while (or is it just that it’s gone down for once?). So how have the investments fared this month? As I covered in my “How I measure performance” – basically I take the value of the portfolio at the end of last month, add on any contributions for the month, and that was my starting value. End value is the value at the end of the reporting period. Simples 🙂

So, what did March do for me? I was feeling very positive until the drops started kicking in at the back end of the month, but that said it means my GTP ISA will buy more!

‘folio Perf. Notes
Company Pension -1.55% No income generated as all funds are in growth or reinvested
Personal Pension -3.94% No income generated as all funds are in growth or reinvested
ISA 1 -2.55% No income generated as all funds are in growth or reinvested
ISA 2 -2.97% The performance does not include the income that was paid out into my account
ISA 3 0.01% Although dividends are paid out, they remain in the ISA wrapper, and will get reinvested for growth. The performance figure includes both the Capital growth, and also income received which will get reinvested.
ISA 4 -2.74% Go T’ Pub ISA
FTSE-100 -2.42% This excludes any dividends
FTSE-250 -1.15% This excludes any dividends
FTSE-All -2.20% This excludes any dividends
S&P500 -3.50% This excludes any dividends
Dow Jones -4.54% This excludes any dividends
VWRL -4.91%
VHYL -4.94%
GBP/USD 2.07% This was taken on the spot rate on the close of the last day of the month. Going forwards I will pick up the exchange rate from www.xe.com for consistency and real life 🙂

So a lot of negative numbers there for the second month in a row. This puts me back to pretty much the same value I had back in November. Whilst a little depressing, I am still in wealth building mode so it just means I can buy more while they are cheap – something I have been waiting for since the bull market started so very long ago!

The one shining surprise in all this was my self managed ISA. Whilst 0.01% increase isn’t anything to shout about, the fact that it remained positive despite the large drops everywhere else. This was despite a shortfall in the dividends this month from the same time last year – attributable to the fact that I sold some of my stock that paid out, and the change in the GBP/USD exchange rate meant dividends were smaller.

Last summers rebalance of ISA 3 is now working its way through the numbers so I think I have mostly taken the hit on lower dividends, but the lower volatility is also helping.

Oh well, as I am currently not reliant on them I can continue to reinvest.

Although ISA2 looks very bad, it is continuing to pay out a steadily growing income stream

So, what does this look like in pretty pictures?

201803PerfGraph

So almost a year on and £10,000 invested wouldn’t have shown that much growth when you keep hearing about the historic returns. Just do remember that these figures banded about are average over years.

My forecasts still show that I will not hit the number I need by June 2025 however that is based on 4% growth and no increase in savings, something which I have changed. Increasing the payments into my other half’s ISA and hopefully also my GTP ISA that will soon make up the shortfall.

And what of my other non financial performance? Well I am pleased to say that the stone of weight that I lost has so far stayed off and seems to have balanced, however I haven’t yet managed to shake any further but I am hoping that I will get below the magic 14 stone soon…

How was your March? Were you caught in the falling market or did you buy more?