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Model Portfolio: 11 February 2015

Strong start to 2015

    

As 2015 gets off to a good start, equity markets continue to trade near four year highs and the bond market has performed well.  The FTSE ORB index is also trading near highs around 110 after spending much of 2014 between 104 and 107.

Professional advisor sentiment remains bullish.  Our Advisors Sentiment Indicator measures how bullish or bearish professional advisor sentiment is and produces weekly data points highlighting the percentage spreads.  The report has been running since 1963 and has historically been a key leading indicator of when the market is going to correct.

After a new bounce in their number the bulls ended at 52.5%. That was up from 49.0% a week ago and close to the level seen two weeks. The count exceeded 56% at prior highs over the last three months and may be heading there again. Bulls above 50% show elevated risk while +60% levels point to near fully invested outlooks that usually precede a major market top. That has not occurred since June 2014. By October 2014 the bulls were down to 35.3% and buying conditions were good after a near 10% market pullback.

Keep an eye on the report for when the bulls increase if you are worried about the market topping out.

We’ve added Balfour Beatty PLC 10.75% Cum Cnv Red Preference Share to the Preferences Share universe.  If there are preference shares not there that you would like to see please get in touch.

The overall portfolio continues to perform well along with the market. A mixed bag with our Tesco holdings, as the 5% is up just over 4.5% whilst the 1.25% linker trades down just over 1%.

Premier Oil 5% 2020 has been the largest faller within the portfolio down 7%.  Although not overly surprising seeing as the Premier Oil share price has halved (as with crude, which PMO closely follows as represented by the below chart).

A2Dominion also had a good rally up to 108.5 from when it listed in our Born on ORB universe.  We look to disposed of the Golden Lane MENCAP retail charity bond as it had run up on a supposed short squeeze.  You can read up on both affordable housing issues in previous  bond of the week articles here: A2D and MENCAP.

Buy Date Issue Life (yrs) Nominal Buy Price Current Price
3.9.12 CLS HLDGS 5.5% BDS 2019 6 12000 101 106.49
10.10.12 Workspace 6% Sept 2019 6 5000 100 108.15
16.5.12 Tesco Bank 5% 2020 7 5000 100 105.72
8.5.13 IPF 6.125 % 7 7000 100 101.55
26.3.13 Unite Group 6.125%  7 10000 104 110.945
13.10.11 National Grid 1.25% 2021 8 10000 100 111.175
17.10.13 Paragon 3.729  U/D 10000 93 99.421
12.12.13 Premier Oil 5% 2020 7 10000 100 92.35
04.02.14 Tesco Per Fin 1.25% 2019 5 10000 104 99.875
16.06.14 Ladbrokes 5.125% 2022 8 10000 100 103.6
15.05.14 Enterprise Inns 6.375% 2031 15 9000 100 95.5
30.09.14 A2D 4.5 2026 12 10000 100 108.5
30.07.14 Retail Charity Bond 4.375% 2021 7 10000 100 106.475

Please note UK Corporate bonds can only be purchased over the phone please contact us on 0845 607 6002

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