It's been almost three months since we did our tweaked version of the Dogs of the Footsie, so it is time to check in and see how the pack is doing.
For those of you who missed it first time round, the virtual portfolio is constructed using the principles of the investment strategy known as the Dogs of the Dow. I tweaked it slightly and applied the principles to the FTSE 100.
READ Selectively breeding the Dogs of the Footsie
To make life tougher (and a bit more realistic), the virtual portfolio was constructed with purchases being made at the offer price, while sales will be made at the bid price. I have assumed £15 dealing costs on each trade.
Here is how the portfolio started off, back at the end of January.
Let loose the dogs
- AstraZeneca PLC (LON:AZN): 23 shares bought at 4,210.5p.
- BT Group PLC (LON:BT.A): 323 shares bought at 305.5p
- Barratt Developments PLC (LON:BDEV): 206 shares bought at 478.6p
- Capita Group PLC (LON:CPI): 197 shares bought at 499.1p
- Legal & General Group PLC (LON:LGEN): 419 shares bought at 235.2p
- Marks & Spencer Group (LON:MKS): 293 shares bought at 335.9p
- Persimmon PLC (LON:PLC): 51 shares bought at 1,931p
- Royal Mail Group PLC (LON:RMG): 239 shares bought at 411.3p
- TUI AG (LON:TUI): 84 shares bought at 1,167p
- Taylor Wimpey PLC (LON:TW.): 589 shares bought at 167.1p
As it happens, Capita Group has dropped out of the FTSE 100 but it keeps its place in the Dogs portfolio, which is just as as well as it has been one of the better performers so far.
Talking of which, how has the portfolio been doing?
Situation as of Thursday morning
Company
No. of shares
Total cost
Average price paid
Current bid price
Current value
Profit/ loss £
Profit/ loss %
23
£983
4,275.7p
4,738.5p
£1,087
£104
11%
206
£1,001
485.88p
562.5p
£1,159
£158
16%
323
£1,002
310.15p
314.45p
£1,016
£14
1.4%
197
£998
506.72p
548.5p
£1,081
£82
8.3%
419
£1,000
238.78p
250.1p
£1,048
£47
4.7%
Marks & Spencer
293
£999
341.02p
344.6
£1,010
£10
1.1%
51
£1,000
1,960.41p
2,189p
£1,116
£117
12%
Royal Mail
239
£998
417.58p
421.4p
£1,007
£9
0.9%
TUI AG
84
£995
1,184.86p
1,083p
£910
-£86
-8.6%
589
£999
169.65p
194.2p
£1,144
£145
14%
- Cash: £117 (including £93 of dividends)
- Current market value of portfolio (including cash): £10,694
As you can see, helped by a handy £93 of dividend payments - and more to come (this is a high yield portfolio, remember) - the portfolio is £694 in profit.
On an initial investment of £10,000 even my 'O' level maths can work out that is a 6.94% gain in less than three months, which is impressive. Admittedly, £150 of that will disappear in dealing costs when we sell up but even so, over the same period the FTSE 100 has only risen 2.7% - though that excludes the effects of dividends.
Let's not count our chickens, however; we've got a number of clouds on the horizon - pension worries for the likes of Royal Mail and BT, terrorist attacks and wars for TUI, stamp duty for the house builders and Donald Trump for everyone.
As mentioned when the virtual portfolio was created, the idea is there will be no dealing until next February (worst Motorhead album title ever).
Traditionally, a "dogs" portfolio is done at the end of each year but there is nothing to stop you doing it whenever you wish. There is no guarantee that doing one now would generate the same sort of capital appreciation as the above portfolio, but purely for academic interest, these are the stocks that would make the cut were we creating the Dogs of the Footsie portfolio now:
Rio Tinto, Persimmon, Anglo American, Royal Mail, Marks & Spencer, BT, Glencore, Imperial Brands, National Grid and J. Sainsbury.