SIF Income Portfolio 2025: Battling The FTSE 100 Winners

Sun 8:15pm by Roland Head

6 comments 1615 reads

2025 marked the first year of the SIF portfolio’s tilt to income. My initial impression of the modest changes I made in order to increase the portfolio’s yield are that they’ve worked largely as expected.

While underperforming the market slightly, SIF delivered a respectable double-digit gain in 2025 and generated a useful income premium over its FTSE All-Share index benchmark.

Given the market backdrop last year, SIF’s lack of exposure to FTSE 100 big caps probably held back performance. That’s inevitable sometimes.

Fortunately, the portfolio’s returns were lifted by takeover offers for International Personal Finance (LON:IPF) and Bakkavor (LON:BAKK) and the belated purchase of gold miner Endeavour Mining (LON:EDV). The latter has since become the portfolio’s largest position.

I’m broadly happy with last year’s result and plan to leave my screening rules unchanged in 2026. This should allow the updated system to deliver a year of returns without any transition impact (positive or negative) from selections made under the previous rules.

Let’s take a closer look at how the portfolio performed last year and at SIF’s trading activity since my Q3 update.

How the SIF folio works: as a quick reminder, SIF is a model portfolio that I mirror within my own real money portfolio. Here is a summary of the rules I use to buy and sell shares:

I select new shares from my SIF stock-buying screen in a weekly review, adding new shares when possible, while taking into account diversification by sector and the number of existing holdings;
Shares are held for a minimum of nine months. However, if a stock issues a profit warning or falls by more than 25% below the portfolio’s cost price, it’s sold at the next weekly review;
After nine months, I test shares against my SIF stock-selling screen. If they pass all the rules, they remain in the portfolio subject to a rolling monthly review. If they fail, they’re sold.

SIF 2025 performance: +17%

The SIF portfolio delivered a total return of 17.1% in 2025, including 5.6% of dividend income. As with Ed’s NAPS, this was the third-best year in the portfolio’s history since its inception in 2016.

That SIF underperformed the FTSE All-Share while also delivering such a solid result highlights how strong the…

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Silver Moon

Mon 2:20pm

'Since April 2026 ' must be a typo! I sold IG group (LON:IGG) but have kept Card Factory (LON:CARD) , PayPoint (LON:PAY) , Synectics (LON:SNX) and TP Icap (LON:TCAP) on while you sold them all Roland. It'll be interesting finding out whether my contrarian view will keep the bacon in the pan or not. I sold the IG because I wanted to crystalise a profit, to put the returns into something that glitters.

rmillaree

Mon 3:04pm

Norcros (LON:NXR)

As Mark observed in July, continued acquisitions are helping to achieve economies of scale and lessen the impact of the company’s long-running pension deficit.

Of the two main measures used the headline figure (On an IAS 19R accounting basis) actually confirms there is a surplus now ref the pension and has been for the last2 years - ok the backup version - The actuarial deficit - does still show a modest deficit at 31/3/2024.

Overall though the pension seems reasonably sound as the deficit payments are planned to stop in 2027 - and there is possibility interim payments may go into eschrow so they can be clawed back if not needed.

Thats a decently healthy position imho

Note imho its more the "size" of the pension that might be a worry and drag rather than there being any material deficit - with scheme liabilities curent value of £260 mill thats pretty large sum where the assets to cover these liabilities need to generate positive returns to stop defecit tunring up again (measure 1) or increasing(alternative measure)

Good news is that liabilities number has been trending down nicely and its a very mature scheme - albeit it aint going to go away anytime soon - but its decently under control and trending downward most years ref size of what neds to be paid out - with hope that from 2027 there isnt anything that needs actively funding as thigs stand now.

full commentary form 2025 results

Pension schemes

On an IAS 19R accounting basis, the gross defined benefit pension scheme valuation of the UK scheme showed a surplus of £6.8m compared to a surplus of £16.5m last year. The present value of scheme liabilities decreased by £17.8m as benefit payments made in the year and an increase in the discount rate to 5.60% (2024: 4.85%) were partially offset by a loss in relation to updated mortality assumptions. The value of scheme assets decreased by £27.5m largely due to benefit payments made in the year.

In the current year, the Group reached agreement with the Trustee on the 31 March 2024 triennial actuarial valuation for the UK defined benefit scheme. The actuarial deficit at 31 March 2024 was £11.7m (2021: £35.8m). The current deficit repair contributions were reconfirmed at £3.8m per annum from 1 April 2022 to June 2027 (increasing with CPI, capped at 5%, each year). It was agreed that there would be no further deficit repair contributions after June 2027.

The agreement also included a mechanism where deficit repair contributions would be diverted into an escrow account when the scheme is deemed to be in surplus on a technical provisions basis. In addition, the Group will contribute up to a maximum of £1.0m per annum to cover pension administrative expenses should asset investment performance not be sufficient to cover the ongoing management fees. The 2027 triennial actuarial valuation is expected to take place during the year ending 31 March 2028.

The Group's cash contributions to its defined contribution pension schemes were £3.8m (2024: £3.9m).

Rusty2

Mon 4:32pm

I still hold all of those. Tempted to sell some IG group (LON:IGG) but it has momentum now, it is 1332p today. So up about 30% from Roland's sale.
I should have sold Card Factory (LON:CARD) probably.

Roland Head

12:14pm

Silver Moon, that's now corrected, thanks for flagging it up.

Roland

Funderstruck

2:29pm

Thanks Roland for your comprehensive reports.

As you have done , i introduced a tighter manual stop loss when the UK market kept trundling along at a low level. Results days would either see a good rise or a big fall so for each i would determine direction & often sell & occasionally buy back on good news. If i had good profits in the bag , that allowed me to hold on a little bit longer.
Previously in a more bullish market i would hold after a large fall , in expectation & eventually dump them except since '22 a few ,in which i still had faith I continued to hold as there was not anything i considered worth buying. The Lost Opportunity advantage was not attractive. However happily those i held finally came back into profit eg. VLX ; RR. ; BEZ ; SLP ; the last nearly a Triple Banger in reverse

Lessons., i hope learnt, to modify my Stop Loss depending on the state of the market being invested.

Wishing everyone a Healthy life and Portfolio, for and beyond 2026.

Epitychia

48 mins ago

Card Factory (LON:CARD) Always sell on a profit warning.

SIF Income portfolio 2025: battling the FTSE 100 winners

SIF 2025 performance: +17%

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Roland Head

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