My portfolio’s returns

This page shows the returns of my directly invested portfolio, since the start of 2013.  For information on how this portfolio is managed, see my Investment Policy Statement. Points to note:

  • I track my returns at the end of each month. I track my portfolio in GBP, using the prevailing currency rates.
  • Some accounts have delayed reporting so these figures are subject to change after a few weeks. Anything older than four months ago is locked down.
  • I unitise the portfolio, which strips out the effect of additions or withdrawals.
  • These returns are net of fees and withholding taxes, but before any year-end additional taxes are paid (which I pay out of other funds).
  • The graph below shows what would happen if £1m had been invested at the start of 2013 and had received the same returns each month as a ‘unit’ of my own portfolio.

Investor Return (money-weighted return, internal rate of return)

From 1 January 2013 to 30 September 2019

Investor return: 11.6% (Annual compound return)

Portfolio return (time-weighted return, comparable return)

Portfolio return as at30 September 2019
1 month+1.3%
3 months+3.7%
YTD+19.6%
1 year+6.6%
3 years+10.4%
5 years+11.7%
Sharpe ratio1.3
Maximum drawdown-11.4%
Monthly returns since Jan 2013
Growth of GBP1m under my portfolio’s returns

With thanks to bogleheads.org for the spreadsheet and methodology.

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10 Comments on “My portfolio’s returns”

  1. retirementinvestingtoday says:

    Hi FvL

    If I understand correctly this is not the return on all your wealth, which also includes BTL, commercial property, private equity etc, but is based on the portion of your portfolio which includes 80% Equity, 15% Bonds and 5% cash?

    I’m asking because as a comparator to your 13.7% my portfolio (which includes 100% of my wealth and like you is net of all investment expenses and withholding taxes) has only managed a paltry annualised 5.7% between the 05 Jan 13 and the 06 Jun 15 (I capture my portfolio weekly thus the odd dates). Sure the market has taken a hit in the past few days but it’s still a big difference. Over a longer term I’ve managed an annualised 6.5% between the 05 Jan 08 and the 06 Jun 15.

    Even considering my lower risk portfolio (10% cash, 26% bonds, 10% property, 5% gold) I’m still a long long way behind you. I’d be interested to know why – is it just my lower risk asset allocation or are you outperforming the market by a long way? I know I’m out performing my benchmark since the start of 2008. Do you know how much you are out performing a similar passive index tracking benchmark that is similar to your current allocations?

    Cheers
    RIT

    Liked by 1 person

    • @RIT
      Yes you understand correctly. This is the portion of my portfolio which is (supposed to be) 80%:15%:5%.
      I haven’t quite done the benchmark analysis but do plan to do so. I find the total return numbers hard to come by (for e.g. FTSE100/FTSE350) so may end up fudging it a bit.
      I am surprised to see 13% too; I hadn’t been tracking this number until I prepared this blog post.
      If I am outperforming, why? I haven’t done this analysis either. But I think the reason is probably a tilt towards the USA (which has averaged about 15% during this time period) and towards Dividend Growth, which has done very well esp in the USA. Passive constitutes less than half this portfolio, so my ’tilts’ are material.

      Like

  2. Steve says:

    …and this “Total return” index is what I use in your investment tracking spreadsheet (in preference to the raw FTSE-100 index). So the “Growth of £10,000” graph fairly compares Portfolio Growth gross with FTSE growth, both gross of dividends.

    Liked by 1 person

  3. Ram says:

    Hi FvL

    I very recently started with Vanguard UK and invested in the US Equity Index Fund – Accumulation option. Per the key investor details documents:
    1. The currency of the share class is GBP.
    2 The Fund invests in securities which are denominated in currencies other than the share class currency. Movements in currency exchange rates can affect the return of investments.

    I downloaded the Bogle Heads returns calculator sheet you had referred to in your above post.

    I noticed that the investor return value of the Bogle Heads calculator differed from that displayed on the Vanguard UK site itself by ~2%.

    Per the Vanguard site, “Your rate of return – Your personal performance uses a formula called internal rate of return (IRR), which is a pound-weighted return. IRR takes into account new money coming into your investment, as well as how long that money has been held. Don’t confuse your personal rate of return with those posted for funds and indices. The returns shown for funds & indices use a different, time-weighted calculation, which does not take cash flow in consideration.”

    My question is: do I need to perform any currency conversion on account of this holding tracking an US based index and enter those values in the sheet?

    Am I doing anything wrong here or these different ways of calculating returns?

    Apologies for the long post and thanks a lot for your time.

    Like

    • Hi Ram – thanks for following my blog!

      In terms of your question, it doesn’t sound like you are doing anything wrong, but please confirm
      a) was this a one-off investment (if so, when) or have you made topups/withdrawals since?
      b) was the investment made in GBP? I assume so

      Like

      • Ram says:

        Hello FvL

        I started off with an initial investment and now regularly add a certain amount every month. I pay in GBP.

        Thanks a lot.

        Liked by 1 person

      • OK – the fact you are adding a certain amount every month means that your returns will not exactly track the numbers you see on the website/factsheet.

        For a sense of why that is, imagine that the market was flat from 1 jan to 1 april, spiked up 10% on 1 april and stayed at that level until 1 july. Also imagine that you put £10k in on 1 january, which becomes worth £11k on 1 april, at which point you add a further £5k in on 1 April. What are your returns on 1 July? You have £16k, and your overall returns are £1k/£16k, i.e. about 6.4%. But Vanguard’s website will say +10%.

        Conversely, if instead of putting £5k in on 1 April, you took £5k out on 1 April, you are on 1 July sitting on £6k holdings, for only £5k net investment, i.e. you have made 20% gain! Except you haven’t.

        So as you add/remove money, into a moving target, your returns will not exactly match the ‘unitised’ returns quoted on the FCA-regulated docs.

        Currency movements aren’t particularly relevant here – other than that they will influence the value of your holdings in other ways – so perhaps for instance that 1 April stepchange in my example came from currency fluctuations, or perhaps it came from underlying stock price movements, or perhaps it came from a mix of both. It doesn’t matter.

        Like

  4. Ram says:

    Hello FvL

    Thanks a lot for the detailed explanation. It explains things and I have learnt something of use.

    Like


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