Monthly income

JohnRo

bostonerimus wrote: »

Yes, I know I'm a broken record and that evangelism is annoying, but so is the voodoo and over complication often associated with investing. Having 29 funds will work for some people, but it's not necessary and there are far simpler ways of doing DIY drawdown.

Fair comment, there's nothing particularly complicated or 'voodoo' about administering a few more trusts though and the monthly rebalancing purchases at CSD are now cost saving at this point. It's a style choice I've made and given reasons for.

With a spreadsheet this is no more difficult to administer than it would be if I only held one trust in each category or less for that matter.

I'll concede the spreadsheet is more complex than it needs to be, has consumed some time and may not be some peoples idea of 'fun' but I'm interested in constructing it for informational purposes, it's not exactly hard work. A lot of what I'm detailing is simply playing about with data and spreadsheet operation, rather than being required for essential investment admin.

I keep changing a few aspects from time to time but that's about aesthetics and internal operation rather than investment necessity.

Hindsight might well reveal that a single VWRL investment would have delivered a better outcome longer term and been much the better, smarter option but I'm prepared to put that to the test here (in this portfolio) and live with the comments and consequences.

bostonerimus

JohnRo wrote: »

Fair comment, there's nothing particularly complicated or 'voodoo' about administering a few more trusts though and the monthly rebalancing purchases at CSD are now cost saving at this point. It's a style choice I've made and given reasons for.

With a spreadsheet this is no more difficult to administer than it would be if I only held one trust in each category or less for that matter.

I'll concede the spreadsheet is more complex than it needs to be, has consumed some time and may not be some peoples idea of 'fun' but I'm interested in constructing it for informational purposes, it's not exactly hard work. A lot of what I'm detailing is simply playing about with data and spreadsheet operation, rather than being required for essential investment admin.

I keep changing a few aspects from time to time but that's about aesthetics and internal operation rather than investment necessity.

Hindsight might well reveal that a single VWRL investment would have delivered a better outcome longer term and been much the better, smarter option but I'm prepared to put that to the test here (in this portfolio) and live with the comments and consequences.

There's a lot of fun to be had with investing and being an physicist I'm a sucker for the details and the beauty of data. I'm a big promoter of people doing their own investing and so I love that you are so connected to your portfolio. But most people are going to find your approach a bit intimidating so I just wanted to point out that it's possible to do DIY investing using a far simpler set of tools on a far smaller number of funds.

JohnRo

I've mentioned this before in this thread but the FX anomaly with EAT dividend payments seems to be consistent.

Obviously plus or minus one percent is easily dismissed but what is going on with the August payouts?



I dread to think it's some sort of creative accounting or hidden charge so what Earthly reason can there be for this consistent discrepancy every August?

grey_gym_sock

JohnRo wrote: »

what Earthly reason can there be for this consistent discrepancy every August?

dutch withholding tax!

see https://www.investegate.co.uk/european-assets-tst--eat-/rns/dividend-declaration/201708010700206458M/

a gross dividend of Euro 0.2964 (net rate - Euro 0.2628) ...

The August gross dividend is increased to offset the element of
Dutch withholding tax applicable and provide an annual payment to
shareholders representing a full 6 per cent of closing net asset
value per share of the Company at the end of the preceding year.

well, EAT does appear to be incorporated in the netherlands. i don't know why, or precisely how this works.

JohnRo

Thank you very much GGS, this has clearly escaped me. Much appreciated.

TCA

John, comparing your spreadsheet to the EAT dividends below on the F&C website, I saw differences in the August euro amounts so my first thought was tax.

http://www.fandc.com/uk/private-investors/investment-trusts/european-assets-trust/dividend-history/

Then after some googling found this:

http://ican.tddirectinvesting.co.uk/alliance-news/european-assets-trust-raises-august-dividend-to-absorb-dutch-tax-cost-01-08-2017/

Is it the case then that you're comparing a gross dividend amount for August when you should be using the net amount?

GGS beat me to it by 45 minutes which shows how much screen staring time it took me to work it out! This might also clarify:

https://www.tax-consultants-international.com/read/Dutch_withholding_taxes

JohnRo

Thanks T, this has completely flown under my radar, which I'll concede isn't difficult.

Some of my confusion over net/gross is in small part because CSD list the EAT dividend payments as GROSSdividend in their account statement.

I need to get a SIPP sorted out. I've decided to hold the Vanguard REIT's in one and it looks like EAT is also a candidate.

https://www.gov.uk/government/publications/netherlands-tax-treaties

I'm assuming a SIPP will qualify as host country resident for dividend withholding tax purposes?

greenglide

So this explains my confusion over EAT dividend as well.

I hold EAT is an ISA with youinvest and also with TD in a dealing account.

The August dividend for the TD account arrived as two payments when previous ones have only been a single payment. The youinvest arrived as a single payment.

Having looked again the youinvest dividend have a dividend and a tax component in a single payment, I assume TD treat them as separate payment.

JohnRo

I've added this parameter to the spreadsheet simply for informational purposes and to hopefully gain a sense of how resilient the portfolio is becoming over time to the effects of the underlying assets valuations and their market volatility. In doing so I've encountered a bit of an oddity.

As it stands the formula I'm using to calculate MDD (trough value - peak value) / peak value indicates this income portfolio had a maximum draw down of -8.67% on 20th Jan 2016 which lasted a whopping 21 days..

An indication of the volatility in 2016 perhaps as that was around the time the worries about China blew up if I recall but I'd expected a bigger number for much longer somehow, seeing that the portfolio's total return percentages have risen and fallen by much larger amounts.

The relatively modest -8.67% MDD is in large part because new money is going into the investment at various points throughout the year and so constantly lifting the portfolio valuation even when markets are doing their best to reduce it.

But that's the problem. Question is does this sound right? I don't see how the new contributions going in, killing off the troughs and lifting the value to new peaks can be excluded yet that itself also seems to be give a false sense of things like the volatility and actual draw down of the underlying assets.

Is MDD something that doesn't compute well on a portfolio that is receiving contributions or am I doing it wrong?

TrustyOven

Hmmm... How do you calculate MDD in your spreadsheet?

Won't you have to store daily valuations to be able to calculate the MDD between certain dates as you have shown above?

How do you organise such data in your spreadsheet - wont you have a ton of values and a very complex system?