I've now completed the purchase of a new rental property. The cost was a lot less than my existing rental property due to its location away from big cities, but knowing the area, the property should be ideal for young families close to a local school.
I expect the net yield after costs and tax to be around 4%, which is higher than my existing property yield, although it probably doesn't have as much potential for capital appreciation.
There are a few odd jobs to complete but i hope to have it on the market with 2 weeks. I had not fully factored in the costs associated with the purchase into my annual plan, so June expenses were higher than usual.
This has helped to reduce my cash reserves to under 30% of net worth, the lowest proportion it has been for around 3 years.
Showing posts with label Investments. Show all posts
Showing posts with label Investments. Show all posts
Monday, 29 June 2015
3101.HK purchased
After a long while away from investing, the problems in Greece seem to be presenting some potential buying opportunities.
This triggered some research to see if there are any new ETFs on the market that fit my portfolio aims of a decent yield and broad diversification. I was pleased to find Vanguard have expanded their range of low cost ETFs listed in HK. Whilst i wasn't trying to catch a falling knife just yet, i couldn't resist a small purchase of 3101.HK, a HK listed Europe ETF. The costs are lower than the UK listed ETF i had been using for Europe exposure, and it should yield well over 3%.
The purchase pre-dates the recent increasing severity of the Greece situation so this may start somewhat underwater, but the size was very small and i'll keep an eye on the market and look for opportunities to add to either this or other positions.
Purchase price: HKD18.58
Thursday, 23 April 2015
IAPD.L Purchased
After spending most of the year sitting on the sidelines & watching most equities markets rally, i've decided to re-enter the market to top up an existing holding.
IAPD is an Asia Pacific high dividend ETF, with a heavy weighting towards Australia & New Zealand. Its price has fallen recently, i think largely due to fx movements, as the Australian Dollar has weakened to a multi year low against GBP.
It yields well over 5%, and my long term views for Australia remain positive given its core economic strength. It therefore offered relatively good value in comparison to the other main core holdings in my portfolio, and now becomes one of the largest individual holdings.
The purchase price of this tranche was around GBP20.05.
IAPD is an Asia Pacific high dividend ETF, with a heavy weighting towards Australia & New Zealand. Its price has fallen recently, i think largely due to fx movements, as the Australian Dollar has weakened to a multi year low against GBP.
It yields well over 5%, and my long term views for Australia remain positive given its core economic strength. It therefore offered relatively good value in comparison to the other main core holdings in my portfolio, and now becomes one of the largest individual holdings.
The purchase price of this tranche was around GBP20.05.
Wednesday, 1 April 2015
Property investment update - offer accepted
I've mentioned a few times in the last year my plans to use some of my cash reserves to add a new property investment to my assets.
This is partly due to a positive experience with my existing property investment, partly my reluctance to materially increase my stock market investments, and partly due to my desire to earn a greater yield than that available on cash. My cash reserves have also been well above my target for some time.
Following some on and off research starting last summer i've finally got around to putting in an offer on a property, which has just been accepted.
In terms of numbers, it isn't huge, but does yield well above my existing property with a potential gross yield over 6% and a net yield after taxes & costs over 4%. It looks to be in excellent condition so it should be possible to get it onto the rental market quickly after completion.
Away from the numbers, i found it refreshingly easy & emotionless bidding for a property purely as an investment rather than somewhere i would be living. Hopefully the legal side will run as smoothly over the coming weeks.
This is partly due to a positive experience with my existing property investment, partly my reluctance to materially increase my stock market investments, and partly due to my desire to earn a greater yield than that available on cash. My cash reserves have also been well above my target for some time.
Following some on and off research starting last summer i've finally got around to putting in an offer on a property, which has just been accepted.
In terms of numbers, it isn't huge, but does yield well above my existing property with a potential gross yield over 6% and a net yield after taxes & costs over 4%. It looks to be in excellent condition so it should be possible to get it onto the rental market quickly after completion.
Away from the numbers, i found it refreshingly easy & emotionless bidding for a property purely as an investment rather than somewhere i would be living. Hopefully the legal side will run as smoothly over the coming weeks.
Tuesday, 30 December 2014
December 2014 Investment update
During December i made a few purchases and one notable sale.
Purchases:
Continuing my recent trend of adding to existing ETF positions, i purchased additional units of IAPD.L (Asia Pacific high dividend) and VUKE.L (UK FTSE100 tracker).
The increase in IAPD was mainly to keep balance to the overall geographical mix of my portfolio, following a number of recent purchases of UK, Europe & Emerging Markets. The VUKE purchase was a little more opportunistic, following a fairly sharp fall in the UK index during early December. Both have been delivering solid reliable dividends over 4%.
The unit prices for these purchases were around GBP19.38 for IAPD, and GBP27.84 for VUKE.
Sales:
During the month i sold my entire holding of the 3049.HK (the CSI300 China index tracker). Following a very sharp rise in China equities over the last couple of months, i decided to carry out a long overdue rebalancing to reduce my overall exposure to China / RMB.
I currently have a reasonable holding of the HK Index tracker, along with a large amount of China government bonds. In addition, my HK pension fund is heavily weighted towards HK equities, which in turn are made up of both a large amount of China H shares, and companies heavily dependant on the China economy.
In selling my direct exposure to China equities, it reduces my the proportion of my investment portfolio allocated to HK / China to around 25%, making the overall portfolio roughly 50% USA, UK & Developed Europe, 25% HK & China, and 25% other Asia Pacific & emerging markets.
I sold for around HKD7.08 per share, realising around a 33% capital gain, most of which arose over the last couple of months.
Purchases:
Continuing my recent trend of adding to existing ETF positions, i purchased additional units of IAPD.L (Asia Pacific high dividend) and VUKE.L (UK FTSE100 tracker).
The increase in IAPD was mainly to keep balance to the overall geographical mix of my portfolio, following a number of recent purchases of UK, Europe & Emerging Markets. The VUKE purchase was a little more opportunistic, following a fairly sharp fall in the UK index during early December. Both have been delivering solid reliable dividends over 4%.
The unit prices for these purchases were around GBP19.38 for IAPD, and GBP27.84 for VUKE.
Sales:
During the month i sold my entire holding of the 3049.HK (the CSI300 China index tracker). Following a very sharp rise in China equities over the last couple of months, i decided to carry out a long overdue rebalancing to reduce my overall exposure to China / RMB.
I currently have a reasonable holding of the HK Index tracker, along with a large amount of China government bonds. In addition, my HK pension fund is heavily weighted towards HK equities, which in turn are made up of both a large amount of China H shares, and companies heavily dependant on the China economy.
In selling my direct exposure to China equities, it reduces my the proportion of my investment portfolio allocated to HK / China to around 25%, making the overall portfolio roughly 50% USA, UK & Developed Europe, 25% HK & China, and 25% other Asia Pacific & emerging markets.
I sold for around HKD7.08 per share, realising around a 33% capital gain, most of which arose over the last couple of months.
Monday, 1 December 2014
SEDY.L Purchased
Following my recent trend of re-investing in existing portfolio components, i added to my holding of the iShares emerging markets high dividend ETF earlier in November.
This ETF has been struggling with falls in some emerging markets along with adverse fx movements impacting some of the components. That being said, it has continued to be a solid dividend payer, consistently yielding well over 4%.
I'm trying to avoid adding new ETFs to my portfolio at present as it is already quite large and well diversified, so instead i'm looking to re-invest to (a) maintain a reasonably well balanced portfolio in terms of geographical / industry mix; but also (b) to opportunistically take advantage of market pull backs as buying opportunities, as was the case last month with investments in UK & Europe ETFs.
The unit price for this purchase was around GBP15.45, making it the cheapest tranche of this holding to date.
This ETF has been struggling with falls in some emerging markets along with adverse fx movements impacting some of the components. That being said, it has continued to be a solid dividend payer, consistently yielding well over 4%.
I'm trying to avoid adding new ETFs to my portfolio at present as it is already quite large and well diversified, so instead i'm looking to re-invest to (a) maintain a reasonably well balanced portfolio in terms of geographical / industry mix; but also (b) to opportunistically take advantage of market pull backs as buying opportunities, as was the case last month with investments in UK & Europe ETFs.
The unit price for this purchase was around GBP15.45, making it the cheapest tranche of this holding to date.
Thursday, 30 October 2014
VUKE.L & IDVY.L Purchased
Earlier in the month i looked to take advantage of some fairly steep falls in european equities markets with a couple of new purchases.
Firstly i added to my existing holding of the Eurozone high dividend ETF (IDVY) at around GBP13.88 a unit. There has been a lot of negative sentiment about eurozone growth (or lack of) but the sharp fall in equities markets looked on the face of it to be a bit of an over-reaction, or technical correction - there wasn't anything out there we didn't know already. To me this represented a good buying opportunity of a well diversified dividend payer.
In addition i increased my UK equities exposure, but instead of adding to my existing UK high dividend ETF (IUKD) i instead opted for the much lower cost Vanguard FTSE100 tracker. With costs of only 9bps compared to 40bps on the iShares high dividend ETF, i figured the cheaper cost would offset a lot of the dividend premium, whilst offering additional diversification against a wider basket of shares. As an index, the FTSE100 is a relatively high dividend payer anyway, so well see how it goes. The unit cost was around GBP28.7.
Incidentally i was tempted to buy the Vanguard europe index tracker (VERX) for similar reasons, but having only just been launched it didn't yet appear to be actively traded on my online broker platform, hence sticking with IDVY. This may instead be one to watch for the future.
Firstly i added to my existing holding of the Eurozone high dividend ETF (IDVY) at around GBP13.88 a unit. There has been a lot of negative sentiment about eurozone growth (or lack of) but the sharp fall in equities markets looked on the face of it to be a bit of an over-reaction, or technical correction - there wasn't anything out there we didn't know already. To me this represented a good buying opportunity of a well diversified dividend payer.
In addition i increased my UK equities exposure, but instead of adding to my existing UK high dividend ETF (IUKD) i instead opted for the much lower cost Vanguard FTSE100 tracker. With costs of only 9bps compared to 40bps on the iShares high dividend ETF, i figured the cheaper cost would offset a lot of the dividend premium, whilst offering additional diversification against a wider basket of shares. As an index, the FTSE100 is a relatively high dividend payer anyway, so well see how it goes. The unit cost was around GBP28.7.
Incidentally i was tempted to buy the Vanguard europe index tracker (VERX) for similar reasons, but having only just been launched it didn't yet appear to be actively traded on my online broker platform, hence sticking with IDVY. This may instead be one to watch for the future.
Tuesday, 30 September 2014
AAPL Sold
I sold my small number of apple shares in August at around $99, realising a capital gain of over 60%.
This investment was one of my rare deviations away from the core portfolio of well diversified high income ETFs, bought more for curiosity and a sense of value following its steep fall in price in late 2012 / early 2013.
Having returned close to its historic highs i decided to sell & lock in a healthy profit, making it one of my more successful investments.
If only i'd bought more.....
This investment was one of my rare deviations away from the core portfolio of well diversified high income ETFs, bought more for curiosity and a sense of value following its steep fall in price in late 2012 / early 2013.
Having returned close to its historic highs i decided to sell & lock in a healthy profit, making it one of my more successful investments.
If only i'd bought more.....
Wednesday, 27 August 2014
HK iBond Purchased
Earlier this month i purchased 2 units of the new annual HK iBond, which was the maximum subscription amount given its popularity.
Whilst the amounts are small, this represents probably the best 'cash' return available for HKD, in line with the local rate of inflation.
It is frustrating that it is not possible to buy more, but given the relative health of the HK public sector finances, I can understand why there is no great desire to raise significant amounts of this relatively expensive debt.
Whilst the amounts are small, this represents probably the best 'cash' return available for HKD, in line with the local rate of inflation.
It is frustrating that it is not possible to buy more, but given the relative health of the HK public sector finances, I can understand why there is no great desire to raise significant amounts of this relatively expensive debt.
Thursday, 3 July 2014
SEML.L Purchased
I've just added SEML.L (an emerging market government bond ETF) to my investment portfolio, following a quick trawl through a list if iShares ETF yields.
This ETF contains a broad based holding of local currency denominated government bonds, with the largest holdings in Malaysia, Poland, Mexico, South Africa & Turkey, currently 14 countries in total. It currently has a distribution yield of around 5.6%, having seen the unit price fall over the first half of the year - i suspect this is more a result of depreciating local currencies than any specific credit risk concerns.
I currently hold a reasonable amount of emerging market equities ETFs, which have also fallen in value on weaker currencies. Rather than continuing to add to these, it seemed like a good opportunity to increase the fixed income portion of my investment portfolio instead & lock in a solid income stream.
Many of the countries within the ETF are not subject to the current US/UK/Eurozone style low interest rate enviroments, so i hope there would be less chance of material capital depreciation from rising rates. FX movements, however, would remain a risk going forward if the trends of the last year continue.
I paid around GBP48.7 per unit, the investment size was broadly comparable to most of my new ETF purchases.
This ETF contains a broad based holding of local currency denominated government bonds, with the largest holdings in Malaysia, Poland, Mexico, South Africa & Turkey, currently 14 countries in total. It currently has a distribution yield of around 5.6%, having seen the unit price fall over the first half of the year - i suspect this is more a result of depreciating local currencies than any specific credit risk concerns.
I currently hold a reasonable amount of emerging market equities ETFs, which have also fallen in value on weaker currencies. Rather than continuing to add to these, it seemed like a good opportunity to increase the fixed income portion of my investment portfolio instead & lock in a solid income stream.
Many of the countries within the ETF are not subject to the current US/UK/Eurozone style low interest rate enviroments, so i hope there would be less chance of material capital depreciation from rising rates. FX movements, however, would remain a risk going forward if the trends of the last year continue.
I paid around GBP48.7 per unit, the investment size was broadly comparable to most of my new ETF purchases.
Wednesday, 26 March 2014
3139.HK Purchased
Earlier this week i added to my holding of the ishares RMB Bond ETF.
Although the underlying value has been fairly flat & dividend solid at around 4%, the price of the HKD denominated units have fallen around 3% as RMB has depreciated against HKD over the past few weeks.
Whilst there has been a lot of discussion in the media about RMB depreciation, widening of the exchange rate trading band & general confidence around China, my personal view is still to expect currency appreciation & growth albeit with some volatility along the way.
In the meantime i am happy to take a 4% yield on what should in theory be relatively low credit risk. Any additional pick-up from RMB appreciation will be an added bonus.
The additional units were purchased at around HKD43.1, and this has now become the largest individual holding in my investment portfolio.
Although the underlying value has been fairly flat & dividend solid at around 4%, the price of the HKD denominated units have fallen around 3% as RMB has depreciated against HKD over the past few weeks.
Whilst there has been a lot of discussion in the media about RMB depreciation, widening of the exchange rate trading band & general confidence around China, my personal view is still to expect currency appreciation & growth albeit with some volatility along the way.
In the meantime i am happy to take a 4% yield on what should in theory be relatively low credit risk. Any additional pick-up from RMB appreciation will be an added bonus.
The additional units were purchased at around HKD43.1, and this has now become the largest individual holding in my investment portfolio.
Monday, 3 March 2014
3049.HK Purchased
Following a long period of sitting on the sidelines, today i increased my holding of the China CSI300 tracker ETF.
China shares have taken a real beating over the last few weeks, with both declining values coupled with a depreciating currency.
I've been buying this ETF for around 8 months as part of a small but regular monthly investment with an average purchase price of around HKD5.7. Following the recent sharp drop, today I added to this position with the equivalent of around 3 months regular purchases, at an incremental price of HKD4.98.
Whilst there are obvious risks associated with China shares, and in particular the large index weighting to financials, i consider the current valuation sufficiently low to justify additional purchases. I intend to continue the small standard monthly purchase unless there are any developments that warrant a rethink of my China exposure.
China shares have taken a real beating over the last few weeks, with both declining values coupled with a depreciating currency.
I've been buying this ETF for around 8 months as part of a small but regular monthly investment with an average purchase price of around HKD5.7. Following the recent sharp drop, today I added to this position with the equivalent of around 3 months regular purchases, at an incremental price of HKD4.98.
Whilst there are obvious risks associated with China shares, and in particular the large index weighting to financials, i consider the current valuation sufficiently low to justify additional purchases. I intend to continue the small standard monthly purchase unless there are any developments that warrant a rethink of my China exposure.
Thursday, 28 November 2013
SEDY.L Purchased
I've recently added to my existing investment in the ishares Emerging Markets high dividend ETF listed in the UK.
Whilst this has been a reliable dividend payer over the last year (yielding over 4%), it has been depreciating in value mainly as a result of adverse foreign exchange movements along with weakness in some of the underlying equities markets. The decline had accelerated in the past few weeks, which tempted me to add some additional units at a price lower than my initial investment.
The geographical mix is quite broad, including Taiwan, China, Brazil, South Africa, Turkey & Malaysia with just over 100 individual stocks held.
I do expect to continue seeing some volatility in price, but i'm happy to take a long term view with this investment and continue to take the dividends in the meantime.
The new units were purchased for around GBP16.86, and this is now the second largest holding in my investment portfolio.
Whilst this has been a reliable dividend payer over the last year (yielding over 4%), it has been depreciating in value mainly as a result of adverse foreign exchange movements along with weakness in some of the underlying equities markets. The decline had accelerated in the past few weeks, which tempted me to add some additional units at a price lower than my initial investment.
The geographical mix is quite broad, including Taiwan, China, Brazil, South Africa, Turkey & Malaysia with just over 100 individual stocks held.
I do expect to continue seeing some volatility in price, but i'm happy to take a long term view with this investment and continue to take the dividends in the meantime.
The new units were purchased for around GBP16.86, and this is now the second largest holding in my investment portfolio.
Monday, 25 November 2013
Gold Purchased
Today i made a small purchase of Gold (paper rather than physical).
This is the first gold purchase for over a year, during which my existing holdings have declined over 20% in value. I hadn't considered adding to this investment until the recent downward leg towards $1200 an ounce.
Whether it is true or not $1200 is often quoted as the break even point for current production, leading many commentators / analysts to view it as a potential floor at which supply will cease to increase. Whilst i'm not sure about this theory (demand could still evaporate!), i decided to average down the purchase cost of my investment with a small additional purchase.
My holdings of metals are still a small proportion of my investments (and a tiny proportion of total assets) and i intend to keep it this way. The purchase roughly equates to the loss in value of the original holdings.
This is the first gold purchase for over a year, during which my existing holdings have declined over 20% in value. I hadn't considered adding to this investment until the recent downward leg towards $1200 an ounce.
Whether it is true or not $1200 is often quoted as the break even point for current production, leading many commentators / analysts to view it as a potential floor at which supply will cease to increase. Whilst i'm not sure about this theory (demand could still evaporate!), i decided to average down the purchase cost of my investment with a small additional purchase.
My holdings of metals are still a small proportion of my investments (and a tiny proportion of total assets) and i intend to keep it this way. The purchase roughly equates to the loss in value of the original holdings.
Tuesday, 15 October 2013
3139.HK Purchased
I've recently stumbled across this newly launched HK listed ETF from ishares. It invests in RMB denominated bonds, which are mostly issued by either the China Government or other affiliated issuers, along with a few corporate debt issuances.
There are currently around 80 components with an average life of around 3 years and a current yield to maturity of around 4.3%.
I like this ETF for a few reasons. Firstly, it offers a good yield, which is above most RMB savings account rates. It should also be relatively safe, with diversification across a number of issuances and predominantly being sovereign risk.
Two areas of uncertainty are (a) whether RMB will continue to appreciate against the USD (& HKD), and (b) how the unit values may be impacted by changes in interest rates.
Regarding the former, my personal view is that whilst there may be temporary moves up and down, over the long term i expect RMB to continue to appreciate as the chinese economy continues to grow at a healthy rate.
Regarding interest rate movements, part of the attraction of this ETF is that i don't think it will necessarily follow the widely expected decline in values anticipated in USD bonds. Given USD interest rates are effectively zero, they can only really go up, which should in theory reduce bond valuations. However, RMB interest rates are at more normalised levels, and may well go down if growth rates slow, increasing bond valuations.
Overall i'm comfortable with the risks and see this as a good addition to my income focused investment portfolio.
The unit purchase price was around HKD43.5
There are currently around 80 components with an average life of around 3 years and a current yield to maturity of around 4.3%.
I like this ETF for a few reasons. Firstly, it offers a good yield, which is above most RMB savings account rates. It should also be relatively safe, with diversification across a number of issuances and predominantly being sovereign risk.
Two areas of uncertainty are (a) whether RMB will continue to appreciate against the USD (& HKD), and (b) how the unit values may be impacted by changes in interest rates.
Regarding the former, my personal view is that whilst there may be temporary moves up and down, over the long term i expect RMB to continue to appreciate as the chinese economy continues to grow at a healthy rate.
Regarding interest rate movements, part of the attraction of this ETF is that i don't think it will necessarily follow the widely expected decline in values anticipated in USD bonds. Given USD interest rates are effectively zero, they can only really go up, which should in theory reduce bond valuations. However, RMB interest rates are at more normalised levels, and may well go down if growth rates slow, increasing bond valuations.
Overall i'm comfortable with the risks and see this as a good addition to my income focused investment portfolio.
The unit purchase price was around HKD43.5
Tuesday, 1 October 2013
VHYL.L Purchased (again)
I've taken advantage of a slight market pull back to purchase some additional shares in my new favourite ETF.
This is a relatively new Vanguard ETF listed in the UK investing in global high dividend shares, with a heavy weighting to the USA & Europe. Whilst it technically covers developed & emerging markets, in practice it is very much focused on developed markets.
Many equities have fallen recently with the latest round of US political brinkmanship and more political uncertainty in Italy. This ETF has fallen around 3% in the last month, to a more palatable level for me to buy again.
With a dividend yield of around 4%, around a 1000 components, low management costs and a reasonable PE valuation, this fits my investment strategy particularly well and is now the largest individual holding in my investment portfolio.
I paid around GBP30.95 for the additional shares
This is a relatively new Vanguard ETF listed in the UK investing in global high dividend shares, with a heavy weighting to the USA & Europe. Whilst it technically covers developed & emerging markets, in practice it is very much focused on developed markets.
Many equities have fallen recently with the latest round of US political brinkmanship and more political uncertainty in Italy. This ETF has fallen around 3% in the last month, to a more palatable level for me to buy again.
With a dividend yield of around 4%, around a 1000 components, low management costs and a reasonable PE valuation, this fits my investment strategy particularly well and is now the largest individual holding in my investment portfolio.
I paid around GBP30.95 for the additional shares
Monday, 24 June 2013
HK iBond Purchased
I've been allocated 2 lots (HKD20,000) in the latest HK iBond launch. This is down from the 3 lots i was allocated last year, but is better than nothing given the inevitable 3%+ day one gain as it is valued & traded on the secondary market.
Last year i sold the 3 lots fairly quickly to realise the day 1 gain & reinvest the funds. I'm tempted to do the same again this year, with the equities pull back looking to offer some good buying opportunities.
As the amounts are small i'm not too concerned either way.
Last year i sold the 3 lots fairly quickly to realise the day 1 gain & reinvest the funds. I'm tempted to do the same again this year, with the equities pull back looking to offer some good buying opportunities.
As the amounts are small i'm not too concerned either way.
Thursday, 20 June 2013
VHYL.L Purchased
Having seen all my investment portfolio gains wiped out in the last 2 weeks and then some, i've decided to treat the sharp market pull back as a buying opportunity.
Vanguard UK has recently launched a new low cost global high dividend ETF, a perfect fit for my investment portfolio and almost certainly something i will add to over time.
It ticks many boxes on my shopping list, including:
Low cost - at 0.29% this is well below comparative ETFs provided by the likes of iShares
Exposure to the US - with around a 33% weighting to the US, this plugs the most obvious geographic gap in my portfolio
High diversification - according to the factsheet, this ETF has just over 1000 stocks, the most i've seen in this sort of product
High yield - at around 4%, this is a good yield for a globally diverse fund. The PE (around 13) is reasonable too.
My entry price was just over GBP30, close to the lows since this was launched in May.
Vanguard UK has recently launched a new low cost global high dividend ETF, a perfect fit for my investment portfolio and almost certainly something i will add to over time.
It ticks many boxes on my shopping list, including:
Low cost - at 0.29% this is well below comparative ETFs provided by the likes of iShares
Exposure to the US - with around a 33% weighting to the US, this plugs the most obvious geographic gap in my portfolio
High diversification - according to the factsheet, this ETF has just over 1000 stocks, the most i've seen in this sort of product
High yield - at around 4%, this is a good yield for a globally diverse fund. The PE (around 13) is reasonable too.
My entry price was just over GBP30, close to the lows since this was launched in May.
Sunday, 9 June 2013
IAPD.L Purchased
My investment portfolio has seen a fairly sharp decline in the past 2 weeks, as emerging market & asia pacific equities & currencies have suffered more than most following the FOMC's hints at reigning back their loose monetary policies.
I've seen this as a buying opportunity for an ETF i've been looking to buy for a long time, the iShares Asia Pacific Select Dividend ETF. It has a high weighting to Australia & New Zealand Financials,, Telecoms, Consumer Services & Industrials, and is currently yielding around 5%. Whilst the Australian currency has had a sharp pull back against the USD, i still believe the long term prospects for this region to be strong.
I bought at 2135p, which is around a 13% pull back from its recent high. Whilst i'm by no means certain the pull back is complete, it has unwound almost all its year to date gains and thus felt like a good buying opportunity to add some solid high yielding names to the portfolio.
Friday, 10 May 2013
Portfolio Sale CPBB.L
I've just sold my pref shares in the Co-op bank, following (a) its failed attempt to buy a portfolio of Lloyds branches, (b) the downgrade of its debt to junk status, and (c) the exit of its CEO.
I managed to get out at around 98p, around a 25% loss from its purchase price last month. This loss in theory should be softened by the receipt of a preferred dividend later in the month (assuming it is still paid!).
I didn't need to sell, but there is no obvious reason to hold on to this now, despite the yield that attracted me in the first place. The market may have over-reacted today, the price may recover and this may have gone on to be a solid investment. However I decided to cut my losses primarily due to the individual counterparty risk this investment gave me. If this had been a broad ETF suffering from a market wide event i would have probably held on, but i have found the chance of failure against one struggling counterparty to be unacceptably high.
Lessons learnt:
Stick to the original strategy of broad diversification
Understand and accept the risks associated with high yield
Do more due diligence and research prior to investment
Fortunately this has not had any material impact on my finances, with the original investment being well under 1% of total assets. I hope the experience and lessons learnt may well go on to save me a lot more in the future than i lost today.
I managed to get out at around 98p, around a 25% loss from its purchase price last month. This loss in theory should be softened by the receipt of a preferred dividend later in the month (assuming it is still paid!).
I didn't need to sell, but there is no obvious reason to hold on to this now, despite the yield that attracted me in the first place. The market may have over-reacted today, the price may recover and this may have gone on to be a solid investment. However I decided to cut my losses primarily due to the individual counterparty risk this investment gave me. If this had been a broad ETF suffering from a market wide event i would have probably held on, but i have found the chance of failure against one struggling counterparty to be unacceptably high.
Lessons learnt:
Stick to the original strategy of broad diversification
Understand and accept the risks associated with high yield
Do more due diligence and research prior to investment
Fortunately this has not had any material impact on my finances, with the original investment being well under 1% of total assets. I hope the experience and lessons learnt may well go on to save me a lot more in the future than i lost today.
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