My Passive Investments - June 2019 (+4.48%)

A short term look on long term investing

Disclaimer

June has been my first full month using Ezoic for ads on the blog. And if you’re reading this as a fellow blogger, I’d highly recommend it. Integration was easy, especially through the help of an Ezoic account manager.

Apart from that, I’ve written more for both Capital Matters and Our Departure Board, our travel blog.

Investment-wise, it’s now been over one full year since I started writing these investment/portfolio updates. So if you enjoy reading this, take a look at my ‘18/19 Year in Review’.

So, what happened with my passive investments in June, 2019?

First, remember, my investment decisions are exactly that, my own. As as UK-based investor, I based each investment decision on my own research. These are, by no means, investment recommendations.

Before making any investment decision, you must do your own research and/or speak to a professional.

Firstly, A Reminder Why I Do These Reports In The First Place

You can read more about this in my first passive investor report, which I made all the way back in June 2018.

My Passive Investment Strategy

Long term, my aim is to invest a portion of my savings every month. An important note here is that the numbers you will see in this report reflect the gains and losses of my invested capital only. When I invest more, for example, I would not state this as a gain in the value of my portfolio.

Similarly, if I sell a portion of my investments, this would not be stated as a loss in the value of my portfolio. The numbers simply reflect the performance of the underlying investments. Simply put, a loss/gain does not take into account buying/selling assets. 

Vanguard Stocks and Shares ISA

All investments are held in a stocks and shares ISA with Vanguard. You can contribute anything up to the limit of £20,000 in the 2019/20 tax year. When it comes to investment income/selling any portion of my investments, thanks to the ISA wrapper, any income/capital gain is tax free. 

June Returns (+4.48%)

From the end of May to the end of June, returns were positive at +4.48%,

This almost beat my monthly record, which was set back in January 2019, when monthly returns hit +4.64%. But it does get the number 2 spot.

As per last month, I’m investing 25% of my monthly savings. The other 75% goes towards the first home fund. The home fund will all get shifted into the Lifetime ISA towards the end of the tax year, for the 25% government bonus.

There has been no change to my portfolio this month. All of my investments are held in a globally diversified, sector diversified, cap-diversified index fund with Vanguard. The Vanguard FTSE Global All-Cap Index Fund.

 
Capital Matters - My Passive Investments June 2019 - Monthly Returns of +4.48%
 

Returns Since Inception (+9.43%)

The inception date is the date I first started investing through Vanguard, the end of May 2018. Since then, my portfolio has grown by +9.43%.

Remember, the index fund I’m invested in is ‘accumulating’, meaning it takes all the dividends and reinvests them back into the fund. This really helps compound my investment returns.

 
Capital Matters - My Passive Investments June 2019 - Returns Since Inception of +9.43%.
 

Annual Return (+9.27%)

Since I’ve been doing these reports for over one year, I can now include annual returns. This simply looks at the return of my portfolio in yearly increments.

In this case, my investments, from June 2018 to June 2019, grew by 9.27%.

 
Capital Matters - My Passive Investments June 2019 - Annual Return of +9.27%
 

Sector Breakdown

Below you can see how the investments in the index fund in my one-fund portfolio are broken down by sector/industry.

Capital Matters - My Passive Investments June 2019 - Portfolio Breakdown by Sector

Financials (+0.2%), Consumer Goods (+0.1%), Health Care (+0.3%), Utilities (+0.2%) and Other Sectors (+0.1%) now make up more of the index fund and therefore more of my investments.

Technology (-0.6%), Industrials (-0.1%), Oil & Gas (-0.1%) and Basic Materials (-0.1%) now make up slightly less of my portfolio.

Consumer Services remains the same at 11.5% of my portfolio.

Some Useful Sector/Industry Definitions:

Technology: A broad industry referring to the delivery of energy transportation.

IT: The Information Technology sector focuses on the delivery of information (ie. smart phones)

Consumer Goods: Products bought by an average consumer (eg. food)

Consumer Services: A range of service products offered to customers who buy a product from a company (eg. technical support, account management)

Consumer Discretionary: Products that are not essential but desirable (ie. luxury items, leisure etc.)

Geography

Below, you can see how the index fund I’m invested in is broken down geographically. Remember, figures are rounded so may not total 100% exactly.

MCapital Matters - My Passive Investments June 2019 - Geographical Distribution of Portfolio

Investments in Japan (+0.2%), the Middle East/Africa (+0.1%) and Central/South America (+0.2%) now make up slightly more of my portfolio.

Conversely, investments in North America (-0.3%) and the Asia/Pacific region (-0.2%) make up slightly less of my portfolio.

Investments in Europe, including in the UK and Eastern Europe, remained at the same percentage.

Indvidual Investments

The index fund I’m invested in is cap-weighted. 'Cap’ simply refers to the stock market value of the company. ‘Cap-Weighted’ means that if a company makes up 1% of the stock market index (in terms of stock value) it will make up 1% of the portfolio.

It’s interesting to take a look at the top 10 investments in an index fund. But it’s also worth taking into account how concentrated your investments are in those top 10 companies. The more diversified the index, the more diversified your investments are.

 
Capital Matters - My Passive Investments June 2019 - Individual Companies in Portfolio
 

Nestlé (Company History) is the only company in the top 10 that increased its portfolio share this month.

Apple (-0.1%), Amazon (-0.1%) and Berkshire Hathaway (-0.1%) now make up slightly less of my portfolio.

Microsoft, Alphabet, Facebook, JPM Chase, Johnson and Johnson and Exxon Mobil all remain at the same percentage.

In terms of position in the top 10, JPM Chase (+1) and J&J (+1) moved up. Berkshire (-2) and Exxon Mobil (-1) moved down. Nestlé made it back on to the board.

The top 10 companies now account for 10.2% of my investments overall. This is a decrease from last month of 0.2%, meaning my investments are slightly less concentrated in the top 10.

Dividends

As I said above, the index fund I invest in accumulates (reinvests) all of the dividends it receives. This accelerates growth, compounding returns and also means I don’t have to worry about doing the reinvestment myself. It’s all taken care of for me. That’s true passive investing for you.

Goals For July

  1. Continue to invest, as usual every month, using the Pound Cost Average approach.

  2. Continue to invest 25% of my after-expenditure savings.

  3. Increase income (the more I make, the more I save, the more I invest)

That’s it for June. As always, I love to hear about your own investing experiences. And I like to be as transparent as possible. So, if you want to add to the conversation, ask a question or suggest something I can include next month, let me know in the comments down below.

And, as always, if you enjoyed this post, share away!