Category: Investment returns

One of the nice things about blogging about financial investing is that it make me think more carefully about my investing activity.  Being an analytical sort of person, I decided to take a good hard look at my returns in detail, and see what lessons I could draw from them.

For this post I’ve taken the portion of my portfolio which is readily trackable.  This isn’t my entire investment portfolio but it is the majority of it, and it performs in line with the overall portfolio.  This portion has been tracked in detail for many years, so it gives me an analytical data set that makes it very useful.

I’ve taken the investments which I had three years ago – on 1 July 2012 to be precise.  I have 114 investments in this dataset, ranging from tiny individual shareholdings of under £1000 to a hefty ETF exposure into IUKD (iShares’ yield-orientated FTSE-350 ETF).  By the end of the three year period, I had sold about half of these holdings. It is worth noting that my strategy and thinking has evolved significantly in the last three years; these days I would see less churn in the portfolio (and fewer small holdings).

I’ve then looked at what the average annual return that each investment obtained, over three years (from 1 July 2012 to 1 July 2015).  Returns include the gain in value as well as any dividend income.  This is a money-weighted calculation; if I tripled my exposure in 2014, then the 2014 returns will carry 3x the weight of the 2013 returns; if I sold the position on 1 Jan 2013 then the returns will be the six month returns (from 1 July ’12 to 1 Jan ’13), annualised. The actual calculation is done for me by my tracking software.

Continue reading “The anatomy of a portfolio’s returns” →

My directly invested portfolio delivered one of its worst ever monthly returns in June.  With preliminary numbers now in, I’m down about 3.4%.  I’ve updated my returns page here.

What happened?  In a word, Greece; markets were down everywhere,  FTSE-100 was down over 6%, a particularly bad performance; European equities ex UK were down 4.4% (as so often, the UK is like an inferior version of the Euro, no matter what the ‘kippers will tell you); Australian equities were down about 4.6% (in GBP). Fixed income (at least the corporate bond types that I like) were down too: -3.2% in the UK, 2% in the USA, and 1-1.2% in Oz/ROW.   When equities and fixed income are down everywhere, I will suffer.

Thanks to the suggestion of @RIT, I have started tracking the market returns in each geography/asset type that I track against.  The back of my envelope suggests the markets I’m exposed to fell, weighted by my exposure, 4.4% last month.  Against that backdrop, I’ll take a drop of 3.4%.

The real fun starts this week, now that Greece has overwhelmingly voted to have nothing to do with the reforms the Eurozone insists are required to stay in the Euro.