02 January 2015
By Maynard Paton
Today I’m going to follow-up my Year In Review 2014 by evaluating my portfolio’s 2014 performance in a bit more detail.
This evaluation is another useful exercise I like to perform at the start of every year. It’s just that I always want to know where all my gains (and losses!) occurred during the previous twelve months, and to see whether my portfolio decisions were consistently good, bad or indifferent!
Let me start by laying down my performance ground rules
Here they are:
- My year-end portfolio weightings and returns are calculated using bid prices;
- All dealing costs, broker-management charges and paid dividends are included;
- Cash injected into the portfolio during the year is deemed to have a 1 January start date for performance calculations;
- My benchmark is the FTSE 100 Total Return Index (that is, the FTSE 100 index with dividends reinvested, as published by the Financial Times).
Now here’s a summary of my portfolio’s performance for 2012, 2013 and 2014:
|Year||My Portfolio||FTSE 100 TRI|
I must admit, I was very surprised when I worked out these figures.
I knew I had done quite well since the start of 2012— helped in part by a small-cap bull run during 2013 — but effectively doubling my money during three years is something way beyond I ever expect from my portfolio!
Trust me, a bit of luck has been involved and I do not predict anything like that level of performance to continue!
(And before you ask, I have measured only 2012, 2013 and 2014 because between 2007 and 2011 my portfolio was almost all in cash to fund a house purchase. One day I will calculate my pre-2007 returns, but that is not a priority for me right now.)
Here’s the big table containing all the stats
Next up is a long table listing every share I owned during 2014. Alongside each holding, I’ve disclosed the portfolio weighting at the end of 2013 and the portfolio weighting at the end of 2014.
I’ve also shown the total return (that is, the capital gain/loss plus dividends received) each holding produced for me during the year, as well as the holding’s contribution towards my overall 16% gain.
31 Dec 2013 (%)
31 Dec 2014 (%)
|City of London Inv||10.6||12.6||47.4||5.0|
|Electronic Data Proc||3.8||3.1||2.9||0.1|
I hope the above table makes sense.
Just to remind you, during 2014…
- I sold three holdings entirely (3Legs Resources, Abbey Protection and Soco International);
- I trimmed five holdings (Burford Capital, French Connection, Record, Tristel and M Winkworth);
- I topped up four holdings (Getech, SeaEnergy, Tasty and Tristel), and;
- I left six holdings untouched (Andrews Sykes, City of London Investment, Electronic Data Processing, Mountview Estates, Pennant International and FW Thorpe).
Anyway, here are a few thoughts from compiling that long table:
- 12 of the 17 shares I held during the year recorded positive returns (at least for me). Although only four produced substantial gains, I am satisfied with the overall consistency given the wider market’s flat performance.
- My largest holdings at the start of 2013 were among my best performers. Of particular note are winners City of London Investment, French Connection and Mountview Estates — my first-, third- and fifth-largest positions twelve months ago.
- The larger holdings doing well means I am currently running a more concentrated portfolio. During 2014, the proportion invested in my top five holdings increased from 44% to 52%.
- By far my largest top-up of the year — Tristel — did well.
- Only two shares fell heavily — Getech and SeaEnergy. But I did compound my losses by topping up both positions during the year. Holding and adding to this pair cut my overall portfolio return by a significant 7.5 percentage points.
- Six holdings recorded total returns within 3% either way of zero. Not exactly thrilling I grant you, but I will gladly take these obscure ‘flat-liners’ given all the high-profile losers we saw last year.
I am 98.6% invested in shares going into 2015
So here we go into 2015. I’ve now ring-fenced some cash within my portfolio — just in case this full-time investment lark goes completely wrong! — so my investments heading into the year are confirmed below.
01 Jan 2015 (%)
|City of London Inv||13.8|
|Electronic Data Proc||3.4|
As usual, I have no idea what the market will do in the next twelve months. All I can say is that the FTSE 100 index and FTSE 100 Total Return index start 2015 at 6,566 and 4,956 respectively.
However, something I have realised from writing this post is to consider re-balancing my portfolio. I also need to find some new share ideas. More on those 2015 resolutions — and others — in my next Blog post.
Until next time, I wish you happy and profitable investing!
Disclosure: Maynard owns shares in Andrews Sykes, Burford Capital, City of London Investment, Electronic Data Processing, French Connection, Getech, Mountview Estates, Pennant International, Record, SeaEnergy, Tasty, FW Thorpe, Tristel and M Winkworth.