In the year 2021 (May)

Source: Pixabay

Here is a late update on my portfolio for the previous month of May.

Investment changes

I made no changes in May. Dividends received were paid out or re-invested as usual. In early June I sold further small slices of my holdings in UK and Asia Pacific equity income investment trusts and added to my holdings in UK and Asia Pacific smaller companies’ investment trusts as part of my re-positioning from income to growth. In the three months since mid-March, I have built up a position of about 3% in smaller companies trusts that target growth.


The FTSE All Share Total Return index, my chosen benchmark, went up by 1.1% in the month, and it was up by 10.9% for the year to date. My investment return for the year to date was a rise of 10.26%, including 1.86% in the month. Ahead of the index for the month but behind the index for the year so far. My individual holdings recorded share price movements for the year so far ranging from a loss of -1.09% to a gain of 21.88% with an unweighted average result of a gain of 9.32%.


I have tracked my portfolio value at each month end since 31 December 2013, taking an index value of 100.00 as the starting point. This capital measure 138.41. At this month end, the capital value of my investment portfolio is at a new peak and is up by 8.95% since the end of the 2020 year. Investment returns, growth and income, were 10.20%, and draw down expenditure deducted -1.25% for the year to date.


I have tracked the annual level of my dividends received since 31 December 2013. The annual dividend income as a percentage of the opening portfolio value has increased from 3.37% on 31 December 2013 to reach a new peak of 6.68% at this month end. This measure will be reduced slightly at the end of June because of the investment changes mentioned above.

Portfolio income has increased by 3.20% in the year to date. That is a 98.36% rise since draw down started on 31 December 2013. Increases in income arise from the re-investment of dividend income in more shares, from dividend increases announced, and from portfolio changes. Going forward any increase is likely to be small because increases arising from re-investment and increased payments are likely to be matched by decreases from portfolio changes as I reduce higher income holdings and increase growth holdings.


My annual drawdown spending is now around 3.26% of my portfolio value, based on the last two years spending and the opening and closing values for that period. My cash holdings are sufficient to cover about nine months of spending. In addition to this, dividends being paid out each year are sufficient to cover about four months of spending. My other dividends received are being immediately re-invested in more shares in order to grow my income. This cash position means I will need to sell some investments every few months in order to cover spending and to keep a small cash reserve.


Draw down expenditure was only 59.44% of my portfolio income for the last twelve months. This compares to draw down spending being 70.77% of my portfolio income in the previous twelve months. Portfolio income has risen by 17.96% whilst expenditure has fallen by -0.94%. The increase in income includes inheriting extra capital in April last year, and the continued effect of dividend reinvestment, dividend increases, and portfolio changes. The impact of lockdown restrictions on expenditure is no longer evident now that both years include periods of lockdown.

In the last three months I have added to my growth holdings. Going forward I aim to use further increases in portfolio income as an opportunity to continue this switch by reducing my higher income and income holdings and increasing my growth holdings.

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