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Model Portfolio: 28 April 2011

Model porfolio outperforms the benchmark............

    

A little late in the month, Aprilís valuation sees the Model Portfolio moved to a fully-invested stance, helped along by the recent flush of new bonds from Lloyds TSB, Provident Financial and Tesco Bank. The new issues have helped fill in the gap at the 5-year area for our ladder-structure and the portfolio now has decent range of maturities.

Portfolio values are now recorded within the charting system on the website and it is now possible to track the performance against the iBoxx total-return index, shown here as an overlay chart. It is interesting to note that whilst I did a fairly good job of avoiding the worse of the bear market, I was not quick enough to add "beta" on the recovery, and hence gave back most of the relative gains made in Q1 2009.

The lesson is; portfolio management is a bit like driving -  break hard into the curve and then plenty of power on as you come out. I forgot the last bit.

 

It is not obvious what the next move will be. We have no new cash to invest as yet, although coupon income will gradually bring this in. Should some of the existing holding become expensive, I will look for a chance to take a profit in order to free up some cash for opportunities, however there is no candidates at present. I intend to be a fairly passive investor over the summer months.  

 

Date of Purchase

Issue

Life (yrs) 

Nominal

Purchase Price

Current Price

Value  

Accrued

9 Jan 2008

Marks & Spencer 5.625% March 2014

3

10,000

 95.82  105  10,500
16 Aug 2009 RBS "Royal Bond 5.3% 2015 4 100  £100  104.3  10,430 /
24 March 2011 Provident Financial 7.5% 2016 5 6,000  100.15  103  6,180
22 March 2011 Lloyds 5.5% 2016 5 10,000  100.15  103  10,015

7 Mar 2007

Segro 5.5% 20 June 2018

7

5,000

  97.35

 101

 5,050

 

16 Aug 2010 Enterprise Inns 6.5% Dec 2018 7 6,000

  83.5

 89

 5,340

 

04 Jan 2011 National Grid 2.983% 2018 7 7,000  144.71  149  10,430

 

04 Feb 2010 GKN 6.75% 2019 8 10,000  97.56  106  10,600
28 July 2010 RBS Royal Bond  5.1% 2020 9 5,000  96.03  95.8  4,790
06 May/19 Nov 2010 Goldman Sachs 5.5% Oct 2021 10 10,000  87.9  95  9,500
04 Nov 2010 RBS Inflation-Linked (3.9% min) 2022  11 5,000 100  96.5  4,825
20 Sept 2010 Yorkshire Building Society 13.5% 2025 CoCo 14 5,000  116  118  5,900
08 Mar 2011 Italy 6% 2028 17 5,000  100.44  104  5,200
16 Sept/01 Dec 2010 Lloyds 6.5% Sept 2040 29 10,000  96.35  98  9,800
20 May 2010 Nat West 9% prefs (undated) U/D 5,000  1.03  106  5,300  /
08 March Nationwide 6.875% U/D 5,000    88  91  4,550
12 Dec 2010 Ecclesiastical 8.625% prefs U/D 5,000   1.02  111  5,550  /

 

Category Sum            Notes
Securities

£123,960

Valuation of current holdings
Accrued

£2,113

Interest accrual on above 
Cash

£149

Including interest & coupons received. 
     
Total

£126,222