Sunday, 4 April 2010

My Current Low Charge Portfolio – April 2010


Buying (New money): Since my last post I have continued living frugally and saved 81% of my net earnings and pension salary sacrifices. Total new money entering my retirement investing Low Charge Portfolio was around 1.5%. These were allocated as follows: 69.5% to cash, 4.6% to UK equities, 6.4% to international equities, 1.2% to index linked gilts and 18.3% to UK commercial property. This money was invested both outside of any tax wrappers and also within a pension.

Asset Movements from my Retirement Investing Portfolio: No asset movements were made this month.

Selling: Nothing this month.

Dividends: No dividends paid this month.

Current UK Retail Prices Index: 3.7% which is the same as last month

Current Annual Charges: 0.58% up from 0.57% last month

Current Expected Annual Return after Inflation: 4.1% which is the same as last month

Current Return Year To Date (from 01 January 2010): 6.3% which is up from 1.7%

How close am I to retirement: A good month from both the market and my new contribution meaning I have gone from 44.5% to 46.7% in a single month. Retirement can move further or closer each month and is affected by movements in asset allocations, asset prices or additions/withdrawals to my current low charge portfolio.

The following are the highlights for the month:

- Desired Cash portion moves from 10.5% to 11.7%. This month I have moved yet further from the desired by going from 17.2% to 17.6%.

- Desired Bonds portion doesn’t moves from 17.4% to 18.1%. This month I almost right on the desired by going from 18.5% to 18.0%.

- Desired Property stays constant at 10.0%. This month I have moved closer to the desired by going from 7.8% to 8.1%.

- Desired Commodities stays constant at 5.0%. This month I have moved further to the desired by going from 3.7% to 3.5%.

- Desired International Equity portion moves from 13.5% to 13.0%. This month I am nearly perfect by staying constant at 12.8%.

- Desired Emerging Market Equities stays constant at 5.0%. This month I have moved further from the desired by going from 2.8% to 2.7%.

- Desired Australian Equity portion moves from 19.6% to 19.1%. This month I have moved further from the desired by going from 19.4% to 19.6%.

- Desired UK Equity portion moves from 19.0% to 18.1%. This month I am close to target by going from 17.8% to 17.7%.

My total equities allocation is now 53.0% across all markets and still below the desired allocation of 55.2%. One of the big causes is that the majority of my new money entering has been allocated to cash. I am going to have to seriously consider adding to my equities allocation. The worst deviation I have is my emerging markets allocation which is 2.3% away from desired. I am however a little nervous about adding here as I am exposed to both currency as well as market risk when buying this asset class and as I’m sure all readers are aware the British pound has not been performing well against the world stage. This therefore is making me think that I will add UK equities. This is the same thoughts I had last month and I am still on the fence. Of course, when I make decision I will be sure to post details.

As always DYOR.

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