Rate my SIPP - ITV high conviction

phlebas192

To put this into context, your SIPP has risen by about 8.9%, including some new money, since your first post in February. Over the same period the FTSE All Share Total Return index has risen by 13%. You are running significantly higher risk and yet achieving significantly lower returns. 

Juno_Moneta

phlebas192 said:

To put this into context, your SIPP has risen by about 8.9%, including some new money, since your first post in February. Over the same period the FTSE All Share Total Return index has risen by 13%. You are running significantly higher risk and yet achieving significantly lower returns. 

Sure, they are clearly different investments.

i suspect the yield on the FTSE All Share TR is something like 3.5% perhaps vs ITV’s 6%+ (not guaranteed).

And I doubt the FTSE All Share TR offers me the possibility of a high value corporate action like ITV does. 

Yes I am running higher risk, but therefore I have the opportunity for higher reward. This is my choice and TBH if I’d only ever invested in FTSE index trackers I doubt I’d be where I am today.

But … once I start diversifying sure this could well be something in my portfolio, thanks. 

phlebas192

Juno_Moneta said:

Yes I am running higher risk, but therefore I have the opportunity for higher reward. . 

This is verging into the sort of thinking that was very common during the dot.com bubble, "it's risky therefore the reward will be greater" (*). Obviously, that's not what you are saying, but you are putting the risk first when you should consider the potential rewards first and then decide what level of risk is acceptable.

* - and in extreme cases led to bizarre thinking such as "it's just doubled in price so now it is more risky and the reward will be even greater. Buy, buy, buy!"

FWIW, I don't like index trackers so I'm not suggesting you switch to one. But they can be a useful sense-check since they do provide a clear counterfactual as to what you could have achieved with a different approach.

Juno_Moneta

Thanks yes you are spot on with comparing any investment to some respected baseline - I admit I’ve not bothered with such comparisons for some time.

Qyburn

I know nothing about investing in shares but just trying to compare against a fund that I hold. Is there a share price figure that accounts for earned dividends?  Equivalent to the price of an "Acc" fund.

Roger175

Most share price websites allow you to look up the total return. Here is a screen shot from A J Bell showing this with the total return set to 1yr.
It compares this to the sector, in this case the FTSE250

Qyburn

Cheers so looking on Morningstar would the correct option be "Growth with dividend"? Is this a true comparison of returns over 5 years, ITV vs the HSBC index fund (HSBC FTSE All-World Index C Acc GB00BMJJJF91)?

Qyburn

Just picked that fund as I have that in my ISA.

Juno_Moneta

Roger175 said:
Here is a screen shot from A J Bell showing this with the total return set to 1yr. 

It compares this to the sector, in this case the FTSE250

Thanks Roger that’s useful, will add to my favourite links!

Secret2ndAccount

Yes. It's a good illustration that, over 5 years, a broad index fund outperforms a stock-picker (individual or highly paid fund manager) 90% of the time.
To be fair to Juno, he started this thread in February, since when the two investments are pretty much neck and neck. He avoided the big dip in April when trump announced worldwide tariffs, since ITV isn't very affected.
I think Juno is crazy, but your graph illustrates what he is trying to achieve. The red line is somewhat smooth and steady, whereas the blue line has high volatility - the opportunity to double your money is much greater. After 5 years, All-World has almost achieved the elusive doubling. Looks like ITV has doubled on about 5 occasions. Has also halved on several occasions - not the risk level I would be looking for with £1 million.