SIF portfolio: 2017 in review & 3 new international stocks

Friday, Dec 22 2017 by
SIF portfolio 2017 in review amp 3 new international stocks

It’s been a good year for the SIF portfolio, which has delivered a one-year gain of almost 28%, beating the FTSE All-Share benchmark (+8%) by about 20%.

The portfolio now has an annualised gain (excluding dividends) of about 21% since its inception in April 2016. I’m quite happy with this.

Although many of you will have done better than this in 2017 (notably small cap editor Paul Scott), it’s worth remembering that the SIF portfolio is largely mechanical. It requires very little in the way of research or analysis, and could be easily managed in less than an hour each week.



Hits and misses from 2017

Highlights from the last year include several stocks which delivered total returns of around 50% in nine months or less:

There were also a few misses, but not as many as I expected. This is undoubtedly thanks in part to the bullish backdrop to the markets this year. I don’t expect to be able to maintain such a good record:

At the end of the year, the portfolio will contain 17 stocks. At the time of writing five of these are showing losses, ranging from 1% to 16%. Positions in profit range from +4% to +28%.

Patience pays off

I’m pleased I decided to lengthen the minimum holding period from six to nine months this year.

The main benefit of this is that at least one set of accounts will be published for every stock while it’s in the portfolio. This means that a fresh set of numbers works through the market. This updates the data used in my screen, giving each stock a ‘fresh’ chance to stay in the portfolio.

I believe the longer holding period should also increase the effect of momentum and value factors on the share price.


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4 Comments on this Article show/hide all

Merlotman 27th Dec '17 1 of 4

Roland congratulations on a cracking year for SIF
A couple of benchmarking related questions (it is after all that time of year to review performance)
In your article you have a neat Returns table and below it a performance graph. can these only be generated if you have a public portfolio?
I assume you benchmark SIF against the FTSE All share but don't include divis although you seem to refer to both above. Which is more important for you and which all in return benchmark measure do you use?

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ddinksdadd 28th Dec '17 2 of 4

Hi Roland,

Just like to add my thanks to you for running this section in Stockopedia. Your success vs failure rate seems very good and during 2017 I've basically been adding your picks on a more or less conviction basis, so far no real let downs. I did recently baulk at Motorpoint mainly from a chart perspective, however I've been proved wrong on this one which kind of re-enforces your point about a purely mechanical system and not letting personal biases get in the way!
One of the things I like most about SIF though is your commitment to use real money of your own and tell us before you buy! I think that approach is rare not to say unique, most people are happy to tell you about their purchases AFTER the event, usually at a higher price!

Anyway keep up the good work in 2018 please! I shall monitor the international screen for a bit to see how that goes. By the way do you have any ideas/advice on how best to purchase non-uk listed companies? I suppose via a SB might be a good way ?



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Roland Head 1st Jan '18 3 of 4

In reply to post #289833

Hi Jim,

Thanks for your kind words. The practicalities of trading non-UK listed stocks is a topic that I may cover in more depth in an article this year.

I think the combination of extra costs, currency costs and additional complications such as dividend withholding taxes mean that it's not always as simple as it might seem.

My view so far is that the best way to buy international stocks probably depends on your requirements, for example dealing size and planned holding period. The number of different markets you wish to trade in will also be a factor, as less common markets are not available through all brokers.

Spread betting seems a good choice that removes some of the complexity of dealing in overseas shares, but there's no such thing as a free lunch -- so the impact of the spread and foreign exchange risks could still be significant.



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Roland Head 1st Jan '18 4 of 4

In reply to post #289668

Hi Ssearby,

Thanks for your comment. The returns table and performance graph I've used are only available for Fantasy Portfolios such as SIF.

Dividends aren't included (and cannot be added) to these public funds, so they aren't included in the portfolio figures I've shown.

However, as you point out I do refer to dividend returns when calculating the total return from each individual stock in the portfolio. That's because dividends often add on a few percentage points to the total -- money that real investors would have received.

Personally, I'm a big fan of dividends. In my own portfolio, I use total return (price + dividends -
costs) use this as the main measure of my own performance. On a side note, I also like to calculate annualised return for investments and for my portfolio, as I believe this is the most accurate way to measure long-term performance.



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About Roland Head

Roland Head

I'm a private investor and writer on stock markets, with a particular fondness for free cash flow, dividends and value. I also have a lingering interest in commodity stocks. In earlier life, I worked as an engineer in telecoms and IT. The rules-based approach required for this kind of work undoubtedly influenced my investing style. I also learned a lot from seeing the tech bubble deflate in 2000-1, when I was working for a large and now defunct Canadian firm.  My investment focus is increasingly on developing rules-based strategies such as my Stock in Focus portfolio. This reflects a significant part of my personal portfolio and is the subject of my weekly column here at Stockopedia. more »


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