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Model Portfolio: 17 December 2013

ORB issues continue to perform well...

    

ftse orbThe bond portfolio continues to perform well.  Despite the FTSE ORB index trading lower than the recent peak above 106 at 104, the overall value rises to just over £160,216 from £156,674 at the time of the last write up .

The value of bonds we hold rises to £148k from £135k thank to our (fully allocated) participation in the Premier Oil 5% 2020 new issue.  The bond has, as expected performed well and is trading above par at 101.3.  You can read Oliver’s Bond of the week here.  Included is a comparison to not quite so successful Enquest tap.

Our Co-Op bond has retuned some balance to the portfolio after a rather rare punt on capital growth.  After seeing the price painfully plummet and coupons suspended it been suggested that it should be priced at par with accrued interest of 11% so we are back onside.  Again thanks to Oliver for his opinion piece on what actions bond holders should consider taking here.

a2Top performers in terms of capital gains have been ICAP up nearly 3%, Bruntwood up 2% and A2D Funding (the quickest ORB bond to close) retains it’s issue premium and still trades at over 4% above par, with a running yield of 4.45%

For those interested in global yields it is worth keeping an eye on our Monthly Banker section and Bond ETF analysis.  These give a good overview of the general market trends.

No noticeable fallers, although, Places for People is down a percent, as is National Grid.  A quick look at the two other 5.875% and 6.5% may suggest that National Grid bonds are due a bit of capital upside.

As the stock markets has been attracting some decent grade and well performing IPOs, it will be interesting to see if there are more or less ORB issues in 2014.  My feeling is that with rates still at historic lows and no immanent sign of increasing we may have some healthy options in the New Year...

Note: The portfolio is operated with real money initial deposit of £100,000 and traded through our live bond account. This is to accurately reflect the performance and holds a mixture of credits and bond types, from the AA-rated Places for People bond, down to more speculative holdings such as the BB- rated Enterprise Inns bond. The Portfolio also has a small proportion of its holdings in fixed income preference shares and “bond-like” instruments. Fixed Income ETFs may be added from time to time.

Buy Date Issue Life (yrs) Nominal Buy Price Price  Value Accrued
24.3.11 Provident Financial 7.5% 2016 3 6,000 100 108.2            6,489 98
31.7.12 ICAP 5.5% July 2018 5 5,000 100 106.9            5,345 105
3.9.12 CLS HLDGS 5.5% BDS 2019 6 12,000 101 101.9          12,222 308
10.10.12 Workspace 6% Sept 2019 6 5,000 100 104.8            5,240 58
5.3.13 Paragon 6% 2020 6 10,000 100 102.9          10,290 174
16.5.12 Tesco Bank 5% 2020 7 5,000 100 104.7            5,234 19
20.9.12 ICG 6.25 Sept 2020 7 12,000 100 105.4          12,648 188
8.5.13 IPF 6.125 % 7 7,000 100 100.9            7,060 48
26.3.13 Unite Group 6.125%  7 10,000 104 106          10,600 11
13.10.11 National Grid 1.25% 2021 8 10,000 100 109.5          10,950 27
27.3.13 Provident Financial 6% 2021 8 5,000 100 105            5,249 68
31.1.10 Places for People 1% RPI 2022 9 6,000 100 108.6            6,518 25
8.3.11 Italy 6% 2028 15 5,000 100 104.8            5,238 112
16.5.13 Co-Op 13% Perp. U/D 5,000 90 100            5,000 550
20.07.13 Bruntwood Investments 6% 2020 7 10,000 100 105.4          10,538 241
4.10.13 A2 Dominion 4.75% 7 10,000 100 104.5          10,453 20
17.10.13 Paragon 3.729  U/D 10,000 93 89.65            8,965 61
12.12.13 Premier Oil 5% 2020 7 10,000 100 101.3          10,134 11
                  148,170 2124
Category Sum Notes    
Securities 148,170 Valuation of current holdings
Accrued 2,124 Interest accrual on above
Cash 9,921 Inc. interest & coupons received.
Total 160,216