Monday 9 February 2015

Portfolio Performance Vs The 'White List'

Which is better?

It's not always easy to gauge how well the DIY Income Investor portfolio is doing. Usually I compare my performance against benchmark indices. Occasionally I can find some performance stats from other investors that have similar portfolios - but unfortunately, not too many people have tried my 50/50 shares/bonds income portfolio approach.

The latest comparison I have found seems to be encouraging...

The latest information comes from an article in Citiwire Money giving details of the 'White List' of UK equity income funds compiled by wealth management firm Sanlam (no, I haven't heard of them before). This list shows the 10 'strongest' funds - in terms of returns and consistency - providing income from dividend shares over the five years 2010-2014. The study covers unit trusts and open-ended investment companies but not investment trusts.

To be fair, my portfolio is only around 50-60% dividend shares, and some of those include non-UK dividend share ETFs so a direct comparison is not really possible. However...

The 'Dividend King' (Royal London UK Equity Income A) had the following total returns (income reinvested) with the equivalent figure for the DIY Income Investor portfolio shown in brackets:
  • CY 2010: 17.5%  (DIYII 3.3%)
  • CY 2011: -1.9%   (DIYII -2.5%)
  • CY 2012: 20.7%  (DIYII 33%)
  • CY 2013: 34.1%  (DIYII 20.4%)
  • CY 2014: 6.3%    (DIYII 11.4%)

The comparison is pretty close, although I seem to have underperformed in 2010 and 2013, whilst doing better in 2012 and 2014. Overall, the 'Dividend King' has a better total return over the 5 years: kudos to them! Still, they are supposedly the 'best' of this whole fund sector.

As I said above, I am not exactly comparing apples with apples, but I think the comparison is close enough to tell me that I'm not doing too badly, even compared with the 'professionals'. Have a look at the 'Black List' and you'll see that a lot of them have done much worse than me!

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

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