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Model Portfolio: 26 August 2009
Bull market in corporate bonds continues to lift model portfolio valuations...............  
    
The bull market in corporate bonds has continued since our last valuation of the model portfolio, and the bottom line has risen accordingly.
 
The temptation is to take profits on our holdings, particularly in the case of bonds pushing up over par. However, we are moderated in this desire by the need to find replacement holdings - our money will not be working for us if it stays idle in the brokerage account.
 
Over the past few weeks we have made a couple of alterations to the portfolio, as follows:
 
  • We have taken a profit in our holding of 5,000 British Telecom 2016 bonds. Arguably, this bond still offers good value, given its variable (and rising) coupon, but the bid at over 114 was too tempting to miss.
  • We buy a 5,000 holding in the new 5.3% "Royal Bond" 6 year security. This is a new type of instrument for us, so we enter with a relatively small position    

 

We still have around 10,000 cash, and this we will look to invest over the next few weeks. Hopefully, there will some more new issue to tempt us! 

 

Date of Purchase

Issue

Nominal

Purchase Price

Current Price

Value  

Accrued

30 Jan 2007

Kingfisher 5.625% 15 Dec 2014

10,000

  95.24

101

 10,100

 402

7 Mar 2007

Segro 5.5% 20 June 2018

5,000

  97.35

 88

 4,400

 55

18 April 2007

Merrill Lynch 5.125% 24 Sept 2010

10,000

  97.66

 101

10,100

 481

19 Aug 2007

Portman (Nationwide) 6.25% PIBS

 5,000

  97.50

 72

 3,600

 113

9th Jan 2008

Marks & Spencer 5.625% March 2014

10,000

  95.82

 103

 10,300

 249

10th April 2008

Bradford and Bingley 11.625 PIBS

10,000

 112.00

 10

 1,000

 /

20 Aug 2008

Next 5.25% Sept 2013

5,000

 86.5

 101.5

 5,075

 242

20 Oct 2008

GE Capital 4.75% 15 Jun 2011

5,000

 88.46

 101.8

 5,090

 51

18 Feb 2009

Tesco 5.5% Dec 2019

5,000

 103.64

 105

 5,250

 198

26 Feb 2009

Roche 5.5% March 2015

10,000

 99.37

 108

 10,800

 274

26 March 2009

John Lewis 6.375 Jan 2012

5,000

 101.76

 105.5

 5,275  197
22 May 2009 UK Gilt War Loan 3.5% undated 7,000  73.6  79  5,530  58
15 June 2009 Anheuser Busch 6.5% June 2017 10,000  99.625  108 10,800  126
16 Aug 2009 RBS "Royal Bond 5.3% 2015 50*  100

 99.25

 4,962  /

        

Category Sum            Notes
Securities

91,850

Valuation of current holdings
Accrued

2,436

Interest accrual on above 
Cash

11,086

Including interest & coupons received. 
     
Total

105,372

 

 * The Royal Bond is priced per 100 unit. 50 units = 5,000 invested