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Model Portfolio: & July 2009
Overall portfolio valuation holds steady.................    
        

The last month or so has seen us take the model portfolio up to (almost) fully invested. Broadly speaking, this is a good idea - we donít get paid much interest on the money laying fallow in the brokerage account. Our fully invested stance will not last for long. We have £5,000 nominal of Experian bonds maturing later in the month so we should be shopping again some time before Cowes week. Perhaps a new issue might fit the bill? We will keep our eyes peeled for anything suitable.

Valuation-wise, there is little to report. We now have 15 positions, a good level of diversification. Corporates are firm-to-unchanged, but PIBS remain very wobbly. I would be tempted to top-up with some more holdings in this latter sector, given the double-digit yields now available (see the recent Bond of the Week for more details on PIBS and prefs). However, the portfolio already has a fair exposure to the sector, so I am not rushing into the trade.

Finally, we note that a few of our holdings are over-par. For the longer-dated bonds such as British Telecom, this is no problem - we will simply sit back and enjoy the high coupon. In the case of the shorter-dated Merrill Lynch (now Bank of America), there may be a case for taking a profit. It all depends on what price we can get in the market.

 

Date of Purchase

Issue

Nominal

Purchase Price

Current Price

Value  

Accrued

30 Jan 2007

Kingfisher 5.625% 15 Dec 2014

10,000

  95.24

 97

9,700

 319

7 Mar 2007

Segro 5.5% 20 June 2018

5,000

  97.35

 75

3,750

 15

18 April 2007

Merrill Lynch 5.125% 24 Sept 2010

10,000

  97.66

 102

10,200

 405

19 Aug 2007

Portman (Nationwide) 6.25% PIBS

 5,000

  97.50

 66

3,300

 67

9th Jan 2008

Marks & Spencer 5.625% March 2014

10,000

  95.82

 101

10,100

 166

10th April 2008

Bradford and Bingley 11.625 PIBS

10,000

 112.00

 10

1,000

 -

23 July 2008

Experian (GUS) 6.375% July 2009

5,000

 98.95

 100

5,000

 313

20 Aug 2008

Next 5.25% Sept 2013

5,000

 86.5

 99

4,950

 203

20 Oct 2008

GE Capital 4.75% 15 Jun 2011

5,000

 88.46

 102

5,100

 76

27 Nov 2008

British Telecom 8.5% 2016

5,000

 97.5

 105

5,250

 235

18 Feb 2009

Tesco 5.5% Dec 2019

5,000

 103.64

 103

5,150

 157

26 Feb 2009

Roche 5.5% March 2015

10,000

 99.37

 105

10,500

 192

26 March 2009

John Lewis 6.375 Jan 2012

5,000

 101.76

 105

 5,250  141
22 May 2009 UK Gilt War Loan 3.5% undated 7,000  73.6  75  5,250  24
15 June 2009 Anheuser Busch 6.5% June 2017 10,000  99.625 

 99.40

 9,400  30

    
    
Category Sum            Notes
Securities

£93,900

Valuation of current holdings
Accrued

£2,343

Interest accrual on above 
Cash

£4,797

Including interest & coupons received. 
     
Total

£101,040