Just my luck that as I reach the twelve month mark for my experimental Dogs of the FTSE portfolio, things go all pear-shaped in the markets!
Whilst I have largely avoided reading all about the hysteria, it was difficult to ignore the headlines describing the small downturn with words such as ‘TURMOIL’, ‘BLOODBATH’ and ‘CARNAGE’!
I didn’t worry about my Future Fund – I’ve no idea how much it’s dropped by as I’ll be running my usual numbers at the end of the month, but I did think about how it was going to affect my little Dogs portfolio.
Capita (CPI) in particular suffered in a spectacular fashion – I know it hasn’t been in the FTSE 100 for a while but they were one of the top yield stocks when I started the portfolio so I was committed to purchase and hold them for the year. Oh dear, indeed!
As a reminder, here’s the Dogs of the FTSE strategy:
- Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
- Invest equal amounts in all ten shares
- Hold for a year (give or take a week)
- At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
- Repeat from step 3
[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced]
Here’s how the 2017 portfolio finished:
Not pretty – Capita wiped out my total gains all by itself, yet back in July, it was showing a 25% gain, not including dividend paid. Gosh, I probably doomed the stock by saying that it was ‘showing its pedigree’ in that post – little did I know how the mighty would fall!
So, including dividends, only a paltry 1% gain for the entire portfolio! OUCH!
However, over this same period, the FTSE 100 Total Return was only 0.81% so despite the Dogs being a disappointing let down, they marginally did better, haha! Without dividends though, they seriously under-performed with a 4.35% loss.
What’s next is the 2018 portfolio!
Oh yes, I’m going to put myself through this again in the name of err, ‘financial science’ and hope there won’t be Turmoil, Carnage or Bloodbaths this time round, nor any spectacular Capita-style demises!
So, in accordance with the strategy:
Dogs Set Free (Sold):
- AstraZeneca plc (AZN)
- Capita Plc (CPI)
- HSBC plc (HSBA)
- Intu Properties plc (INTU)
- Royal Mail plc (RMG)
- Standard Life Aberdeen plc (SLA)
Total received from sales = £1298.38
Total Dividends paid out = £76.96
Profit/Loss from original investment = -£92.45 or -6.3% – ouch!
It was not easy at all pushing the ‘sell’ button for some of those but I am committed to the strategy.
Dogs Rounded Up (Bought):
- BT Group plc (BT.A)
- Imperial Brands Group (IMB)
- Evraz plc (EVR)
- National Grid (NG.)
- United Utilities Group Plc (UU.)
- Rio Tinto plc (RIO)
Wrong time to sell, right time to buy? Who knows!? I’m not timing the market.
So here’s how the Dogs of the FTSE Portfolio 2018 starting lineup looks as at 12th Feb 2018:
Best of breed or mangy mutts?
Hmmm…for some reason I don’t feel quite as confident as I did this time last year, but we shall see in 12 months time and as before, I’ll be doing quarterly updates.
I’m not sure I’ve learned anything from running this experiment after just one year, though I must say that I thought the portfolio was going to do better. I guess if I hadn’t been following the strategy, I’m not sure I would have sold some of those stocks.
Let’s see how it goes after a few more experiments.