2018 is the first year since the inception of this website in which stock markets have had a wobble, so a good time to see how resilient my portfolio is when the going gets tough. Anybody can make money when markets are going up.
First a reminder of how some indices performed last year: FTSE 100 -12.5%; S&P 500 -6.5%; MSCI World -10.4%. For a diversified portfolio like mine the MSCI World index is the most appropriate benchmark. It is made up of 1,649 companies in twenty-three countries weighted by market capitalisation but it does not have stocks in emerging or frontier markets. Emerging markets did not fare well last year: -17%.
My ISA is flattered by a £20,000 injection of cash in April and the reinvestment of dividend income. If this is excluded it is roughly unchanged over the year but actually it is 5% higher. Good performances by AstraZeneca and Glaxo and lucky timing selling Shell were the main pluses. The three Vietnam investment trusts bought in the second quarter are showing small losses as is Personal Assets investment trust.
Unlike my ISA, that has twelve reasonably balanced components, my account at Investec is very lop-sided. 30% is in MP Evans and 20% in Monks investment trust. So how did I fare last year? Down 4.2%. The biggest loser is MP Evans down 12% because of a 50% fall in palm oil prices. MP Evans shares are trading at a discount of about 50% to their asset value and, as production on their estates continues to grow, at some point this will be reflected in the share price. Sooner if Malaysian predator, KLK, bids again or later if the palm oil price stays low and there is no take-over activity. I am a patient investor, happy to await events.