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Model Portfolio: 23 June 2010
Model Portfolio : 23 June 2010
There is not a great deal to report over the six-week period since our last valuation. The position in War Loan has been liquidated and we have bought some new holdings in Natwest 9% preference shares and the new Lloyds TSB 5.375% 2015 bond.
Valuation-wise, the portfolio has ticked up a little, perhaps dragged higher by the firm gilt market. However, corporates are softer on balance in spread terms and there are some decent bargain to be had out there. Yields of 5% or so are available in decent senior credits and a fair bit more can be had in some of the subordinated or higher risk credits.
We have more work to do over the next few weeks. The portfolio’s holding in the Roche 5.5% March 2015 (see chart, right) and the Rabobank 4% 2015 have tightened in a fair way and now yield just over 3%. The plan is to switch into something with a 5% handle to keep our money working hard.
One unexpected boost to the P&L has been from the continuing recovery of the non-paying B&B PIBS. We hold for further appreciation.