2020 portfolio review, Photo by Matt Seymour on Unsplash

My 2020 Portfolio Review

I doubt any of us will look back upon 2020 with much fondness and this year hasn’t got off to the greatest of starts either. But purely from an investment point of view, 2020 was a pretty good year.

Initially, my portfolio held up slightly better than global markets in the gloom and doom of February and March.

That provided me with a small crumb of comfort given that trust discounts widened over the first quarter and most of them have some gearing which tends to magnify any wider market falls.

On the way back up from April onwards, though, my portfolio lagged behind.  So, I ended up trailing my chosen benchmark over the whole of 2020 by almost four percentage points.

I’m glad I stuck to my plan

Marginal performance anxiety aside, the thing I’m most pleased about is that I stuck to my plan in 2020.

First of all, when everything looked really scary in February and March, I did not sell.

I think that having a blog so that I could publicly say that was my intention was helpful. That accountability gave me an added incentive to hold firm.

That said, I’ve always been wary of trying to time the market and I hold the view that markets should always recover, given enough time.

Of course, this does mean that I have to be prepared the ride any down waves and the major ones are always pretty unpleasant.

Thankfully, the decline in 2020 was so quick, I think I found it less stressful than the bear markets of 2000-03 and 2008-09.

Keep on buying

Secondly, I kept on buying as and when I had fresh money available.

For example, I was still building up my position in Smithson at the start of this year and bought more in January, February and March. Some of those purchases now look better timed than others!

And I bought shares for my 2020/21 ISA in both early and late April and kept reinvesting dividends after that.

One thing I did do earlier this year was to buy in smaller chunks than normal. I guess I wanted to keep a little powder dry in case the recovery didn’t last and minimise any regret I would have felt from buying too soon.

Perhap I was guilty of a little market timing.

My 2020 numbers

Here are the gory details:

Portfolio / BenchmarkTo Dec
To Sep
To Jun
To Mar
Since Jan
My portfolio+8.8%-0.6%-3.8%-15.1%+33.6%
Vanguard FTSE Global All Cap
Vanguard LifeStrategy 60
Vanguard UK All-Share Index

The Vanguard global tracker remains my main benchmark, with the more conservative Lifestrategy fund (essentially a 60-40 equity/bond portfolio) and UK index tracking fund providing additional reference points.

Ending up 9% for such a turbulent year seems like a decent result in isolation.

It was a strong year for most major markets. In sterling terms, China rose 27%, the US 17%, and Japan 11%.

CNX1, the UK ETF that tracks the tech-riddled Nasdaq market, was up an amazing 43%.

Europe managed a 3% gain even with its largest market, the UK, posting a 10% decline.

The AIC reckons the average investment trust produced about 14% last year on a market-cap weighted average basis. However, probably a third of that was due to Scottish Mortgage, which accounts for around 9% of the sector and more than doubled in 2020.

The UK struggles again

Within the UK market, the smaller the company, the better it probably did.

The AIM index was up almost 22% and the FTSE Small-Cap and Fledging indices posted 7% and 11% gains respectively.

Mid-caps, i.e. the FTSE 250, were down 4.5%, but the FTSE 100 fell 11.5%.

Once again, the skewed weighting of the UK market towards financials (25%) and energy companies (7%) with next to nothing in technology (1%) proved to be its weak point.

And even the big UK stocks with a high weighting towards the growth region that is Asia — looking at you HSBC and Standard Chartered — managed to lose a third of their value.

My portfolio still has a relatively large UK weighting (around 30% compared to 5% in a global tracker). Even though a fair amount of that is in small-caps and infrastructure assets, my domestic bias was definitely a drag on my relative performance this year.

I suspect I’m probably underweight China and the big US tech stocks as well, so that also cost me.

Longer-term returns

I’m just ahead of a global tracker over the three years that I have been properly tracking my returns via this blog.

Up until now, I have been saying that comparing returns over less than three years was fairly meaningless, given the temperamental nature of the market over short periods.

As of this round-up, though, I can’t use that as an excuse anymore so I guess I’ll have to find a new one!

Built to last?

I’m looking for this portfolio to last for at least another 30 years and hopefully a lot longer.

The ONS reckons folks like me have an average of 34 years left with a 1 in 10 chance of living for another 47 years.

My stretch goal remains to beat the global tracker by two to three percentage points a year over the long term. Over 34 years, those few percentage points could make quite a difference.

I’m around one percentage point a year ahead at the moment. Not bad but definitely room for improvement.

I’m happy to take a more active approach for now, while most of my marbles remain in place and I can hopefully at least match global markets. But at some stage, I may decide to move more into passive investments and take things a bit easier.

Having my cake and eating it

As well as beating global markets, I’d also like my portfolio to be a little less volatile on the downside.

I don’t measure this in any formal way. Instead, I tend to look at how I fare in major market declines.

My portfolio didn’t fall as far as the market either at the end of 2018 or in the first quarter of 2020. So, that’s an encouraging start.

Whether it makes sense to have such a dual goal is another matter.

Less volatility has helped me stay invested when times get tough. And that’s crucial if you want to earn decent long-term returns.

But it’s also kept me invested in a few, conservative global trusts that have been struggling for a while now.

I was happy holding onto these while markets were roaring ahead on the basis that they should help in any major reversal.

However, when the 2020 downturn came along, holding these trusts didn’t help at all. In fact, they have been among my worst performers this past year.

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You could make the case that the bear market of 2020 was highly unusual. Or that with global markets earning a double-digit return, it wasn’t really a bear market at all.

Nevertheless, my patience with these trusts wore thin this year and I decided to trim back my holdings my bit.

Frantic trading

Overall, my portfolio turnover for the year was 9%. I define this number as any sale proceeds divided by my portfolio value at the time.

9% is actually quite high for me. I reckon it averages about half that in a typical year.

I sold out completely of Murray International and Princess Private Equity over the summer. I invested the proceeds into three biotech/healthcare trusts plus small top-ups across various other existing holdings.

In December, I sold part of my holding in Caledonia Investments to fund an initial purchase of Keystone, just after it announced it was proposing to appoint Baillie Gifford as its new manager.

Among the various top-ups I did this year were:

  • Smithson;
  • Bluefield Solar;
  • BlackRock Smaller Companies;
  • Gresham House Energy Storage Fund;
  • Acorn Income;
  • HICL Infrastructure;
  • Henderson Smaller Companies; and
  • Lindsell Train Global.

I also did small top-ups of both Murray International and Princess Private Equity earlier in the year before doing a 360 and deciding these holdings needed culling entirely.

These top-ups were primarily aimed at building up position sizes rather than any particular value judgement about the trusts involved.

I didn’t make any changes to my holdings in HGCapital, JPMorgan Global Growth & Income, Baronsmead Venture Trust, Fundsmith Equity, RIT Capital Partners, or Vanguard All-World ETF in 2020.

Selling’s never easy

Once I decided to sell some holdings, actually getting rid of them was a little harder than I expected.

I tend to buy small amounts most of the time and these trades go through very easily. And buying more sizeable amounts to start a position is usually fairly simple as well.

But selling entire positions seems to be much trickier via online platforms. I think I had to use the ‘route to dealer’ method every time and set a minimum sale price I was happy to accept.

With both Murray and Caledonia, I didn’t have to go outside the quoted spread. But the sterling-quoted Princess shares I sold proved a little more clingy.

I wasn’t selling when the market was jumping about particularly either so liquidity should have been decent.

This acted as a useful reminder of why I try and keep my portfolio turnover pretty low. The frictional costs of selling can be substantial.

It’s also made me more mindful of sticking to more liquid trusts and those that have formal discount control policies in place.

Performance by holding

Here’s the usual breakdown by position:

International Biotechnology (bought in Jul)+35.6%+23.5%
BB Healthcare (bought in Jul)+29.1%+16.0%
HG Capital+21.6%-6.8%
Worldwide Healthcare (bought in Jul)+19.9%+16.0%
Princess Private Equity (sold out in Jul)+18.6%-12.8%
Fundsmith Equity+18.4%+7.7%
JPMorgan Global Growth & Income+15.9%-1.1%
Vanguard All-World ETF+12.2%-0.3%
Lindsell Train Global+11.9%+3.4%
Gresham House Energy Storage+10.8%+4.0%
HICL Infrastructure+7.0%+3.7%
Baronsmead Venture Trust+6.2%-3.4%
BlackRock Smaller Companies+4.1%-24.3%
RIT Capital Partners-0.4%-14.7%
Henderson Smaller Companies-0.6%-28.7%
Keystone (bought in Dec)-0.8%-28.1%
Bluefield Solar Income-2.5%-2.1%
Murray International (sold out in Aug)-5.3%-18.7%
Caledonia (sold some in Dec)-5.9%-14.9%
Acorn Income-14.1%-33.5%

I’ve included Murray and Princess here for completeness, even though they are no longer in my portfolio, but I don’t intend to track them going forward.

Spitefully, both of them did pretty well after I sold out, particularly Princess. In fact, they did a little better than what I bought with the proceeds.

I reckon my 3 sales probably cost me about 0.5% in performance terms this year, which I suppose is neither here nor there really.

Looking at my other holdings, it was another year when Fundsmith trumped Lindsell Train. And its small-cap trust, Smithson, is now well ahead of its larger, older brother. Since Smithson launched in October 2018, it’s up 68% while the main fund is up 44%.

I know a few folks are losing patience with Lindsell Train Global after two years of lagging its benchmark. But it’s only behind by 4% over that time and I still have faith in its long-term approach.

It was pleasing to see my UK small-cap trusts bounce back so strongly in the fourth quarter. It’s easy to forget they gained 45% in 2019. Their discounts have narrowed substantially once more which might hold them back a little in 2021.

Acorn Income’s high level of gearing worked against it again. But Baronsmead, which has struggled recently, did OK probably because it has a fairly high weighting to the AIM market.

HgCapital did very well. Although it’s lagged the main tech trusts this year, I’m hoping the end of December revaluation (normally released in March) sees a substantial uplift, based on what tech valuations did over the same period.

My renewables/infrastructure trusts largely did their job although Bluefield stands out as my only holding that fell in value in the second half of 2020.

RIT held up a little better than Caledonia although I suspect it may be some time before the former trades at a premium again.

Perhaps the holding that pleased me most was JPMorgan Global Growth & Income. Its performance has closely tracked global markets for the last couple of years but it managed to pull ahead a little in 2020.

Dividends held up well

I’m very much in the ‘total return is the most important metric’ camp but I do like a decent dividend.

It’s a useful take on the underlying health of a portfolio and it’s pleasing to see them grow over time. I tend to reinvest most of mine and that gives me a chance to scratch any trading itch I get by deciding what to purchase next.

With a heavy weighting towards investment trusts, the dividend level of my portfolio is about the same as it was a year ago. Selling Murrary and Princess dented it a little but new investments and a few increases cancelled that effect out.

But dividend growth going forward might be hard to come by. My UK small-cap trusts held firm but had to dip into reserves this year. The infrastructure trusts have got rid of their inflation-linked increases.

Interestingly, my global tracker only saw its dividend fall 11% in dollar terms (and looks like it held a little more than usual back in excess reportable income). So that confirms that payout cuts were much worse here in the UK than elsewhere in the world.

Looking ahead to 2021

I suspect I’ll be doing some tinkering in the year ahead.

I’m most likely to add to Keystone, both before and after the proposed manager change to Baillie Gifford. And I’d like to increase my holdings of the biotech/healthcare trusts a little as well.

My UK small-cap positions are probably big enough for now. Unless there’s a glaring discount opportunity, I probably won’t add to these for a while.

Both Acorn Income and Baronsmead pay out a large chunk of their overall returns via dividends so their percentage position sizes may shrink naturally over time anyway.

I don’t have that much in the three renewable/infrastructure trusts I hold, but they make up a more significant part of my portfolio on an income basis. There might be a small top-up here, but no major increase I suspect.

Both Bluefield and HICL have been a little less robust than I was hoping they would be and it’s still very early days for Gresham House Energy Storage and the concept of battery storage as a business model.

Defusing capital gains

Almost a quarter of my portfolio sits outside ISA and SIPP wrappers, including my position in VWRL, the Vanguard All-World ETF.

That’s a legacy of 25 years of investing when ISA allowances were much lower than they are today and being wary of putting too much into my pension given the ever-shifting rules and regulations.

As a result, I have a fair amount of potential capital gains, which is a nice problem to have. They’d take a long time to get rid of if I wanted to just use up the standard annual allowance each year and recycle the proceeds into a different investment or into my ISA.

It also seems quite likely we’ll see higher CGT rates and a lower annual CGT allowance fairly soon. The 2021 Budget is due on 3 March so it might not be long before we know more.

But reducing my potential liability on taxable positions has risen up my list of priorities in recent months. So I may do some tidying up here, regardless of what happens in the Budget, and that may mean my portfolio turnover is a little higher than usual in 2021 as well.

Blog highlights

I’ve been blogging for two and a half years now and managed to keep up the pace of an article a week for most of 2020.

I slacked off a bit in November and December and fell one short of the half-century with 49 posts. That said, my pieces seem to have got much longer this year and I’m regularly going past 3,000 words.

Traffic to the site has continued to grow, from around 50,000 page views in 2019 to just over 200,000 in 2020.

For some reason, March was the quietest month of the year for visits to this site, whereas it seems to have the busiest for many others.

After the front page and portfolio page, my most-read articles this year were:

These all got several thousand page views. The ETF piece was written way back in June 2019 so maybe I should write more about passive investing!

In 2021, I’m planning to do much the same mixture of blogs on individual trusts and other more general pieces. I might also experiment with doing a few, shorter pieces every now and then.

Lockdown #3 and the joys of home-schooling might mean I write fewer articles than normal in the first quarter of 2021.

I seem to have fallen into a groove of writing about most of my holdings every 18 months or so, usually soon after they release their interim or final results.

Next up on that front are likely to be BB Healthcare (which I’m yet to do an entire piece on), JPMorgan Global Growth & Income, Acorn Income, and Gresham House Energy Storage.

In summary

I hope 2020 was a prosperous year for you financially and that you and your loved ones have managed to stay safe, fit, and healthy.

Here’s to a much more social 2021 and a rapid roll-out of the various vaccines worldwide.



Please note that I may own some of the investments mentioned above -- you can see my current holdings on my portfolio page.

Nothing on this website should be regarded as a buy or sell recommendation as I'm just a random person writing a blog in his spare time and I am not authorised to give financial advice. Always do your own research and seek financial advice if necessary!

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14 Replies to “My 2020 Portfolio Review”

  1. Thanks ITInvestor, I discovered your blog/ site during Lockdown 1.0. I throughly enjoy it and appreciate the insights you share. J

  2. Excellant Article and great blog in general. Just a comment regarding the good year JP Morgan Gobal Growth & Income has had, do you think there good year, was as a result of the noval Dividend policy.

  3. Brilliant piece as always. I had the incredible luck in 2020 that I had a significant Pension contribution to make in March so topping up my mix of steady ITs (with lots of BG) has flattered despite my weaknesses. I did grab some Temple Bar with all the bad news and surprised to see the lack of news now its rebounded. Im going to sit on the sidelines for this year as my SIPP is maxed out now but may add into Unicorn AIM VCT – yes tax tail, etc. Other than that I will look for a couple of ITs for my Childrens SIPPs. I feel this year is a year to observe with the only worry being my play money in Bitcoin from years ago no longer being in the realms of play. Champagne problems perhaps but I have had my fair share of losses and missed opportunities over the years so will celebrate these.

  4. Thanks, Andrew.

    The dividend policy has been in place a few years now (I believe JGGI was the first JPMorgan trust to go down this route and a number of others have followed suit) so I don’t think it would be because of that.

    Last time I looked, admittedly not in great detail, it was investing a bit less in Europe and a bit more in the US, so that might be the reason. I plan to dig in a bit more when it released its next of results around the end of February.

    The improved performance is quite slight, though, so maybe it’s just random noise rather than anything persistent.

  5. Thanks, John. It still feels like I have a lot to learn about trusts even after a few years of writing about them.

    Let’s hope Lockdown 3 is the last!

  6. Wishing you the best for 2021, and many thanks for your very interesting & thorough posts.

    2020 was an extraordinary year, and 2021 has started pretty punchily (in Washington, anyway…).

    2020 was of course the year for Baillie Gifford. I wonder how 2021 will unfold for them. I have a better sense of their portfolios now than I did & understand the tech case – however many of the valuations seem ridiculous to me.

    I’m still amazed at the collapse, if not too strong a word, of Alexander Darwall – the figures are not what they were, following Wirecard and then Grenke. He was so impressive for so long. And extraordinary following Woodford and their decisions to set up their own shop.

    Another fascination for me has been the volatility of Lindsell Train IT. Still hard to imagine it was at a 100% premium 18 months ago, and then at a discount about 6 months ago!

    Good luck for the year ahead!

  7. Thanks, Tom.

    LTI is definitely hard to read. That big holding in the management company and the fact that it doesn’t tend to issue new shares make it a hard trust to hold onto despite its great long-term performance.

  8. Dear IT Investor,

    Many thanks for your excellent annual review. Over the years I have invested in shares, with varying degrees of success. However, as I get older I am concentrating more and more on ITs. Following is not as much fun as investing directly in shares, but it allows one to sleep more peacefully at night and not agonise about what to do with the likes of former blue chips like Royal Dutch Shell, Glaxo and Pearson, or the various small cap shares which flit in and out of fashion.

    You may well know all about this source of free IT information. But I thought I would mention a weekly podcast called Money Makers, where Jonathan Davis, editor of the Investment Trust Year book, chats with Winterflood’s Simon Elliott about the latest results/updates across the IT world. A link to it can also be found on the AIC website.


    I have listened to a couple of the podcasts and found them useful.

    Please keep up your blog. It is much appreciated

    Best wishes


  9. Thanks Bill.

    I listen to that podcast most weeks and it provides a very useful overview of what’s been happening, especially in sectors I rarely look at otherwise. One for hardcore IT fans.

  10. Thanks for this blog. It’s really interesting to see how you approach your investment strategy. I typically invest in open ended funds but recently took a position in an IT. As a trust has a specific number of shares I appreciate that the share price can trade over or below the NAV. I bought in with the shares trading at a premium because I was optimistic of future gains. However I learned that trusts can elect to issue new shares. If they do this it will dilute the shareholding and will the value of each share will fall to reflect this? As a shareholder can I suffer simply because the trust manager elects to issue new shares or have I misunderstood?

  11. Thanks Steven.

    It shouldn’t dilute existing shareholders. In fact, it should benefit them slightly (although not as much as the managers of the trust who usually charge fees as a percentage of the assets managed!)

    In short, although the number of shares increases so does the net assets of the trust so the value per share for existing shareholders isn’t reduced.

    However, there are a number of factors at play, working in both directions, so in the real world it can get a little messy.

    To use a simple example, say a trust has assets of £100, a share price of 110p, and 100 shares. That means its market cap is £110 and it is trading at a 10% premium.

    If it issues 10 new shares at the current market price this would raise £11 in new money.

    Its net assets would then be £111 and the net asset value per share would rise to 100.91p (£111/110 shares).

    What happens to the share price depends on how investors perceive the trust’s prospects. If they are still happy to pay a 10% premium then, in theory, the share price would rise to 111p.

    In practice, new shares are usually issued at a slight discount to the current share price so the effect on net asset value is muted somewhat. Also, larger issues of new shares can sometimes reduce the price in the market, although the effect tends to be temporary.

    (If a trust was trading at a discount then issuing new shares would have the effect of reducing the net asset value per share but it’s very rare that this actually happens, as far as I know anyway. A trust is more likely to buy back shares when it’s trading at a discount, creating a little more demand and helping narrow the gap between a trust’s net asset value and its current share price.)

    There are a couple of other benefits to issuing new shares. If a trust grows significantly in size via new share issues then the managers may feel able to reduce the percentage fee they charge for running it. Other trust costs (audit, legal, directors, custody etc) should fall on a per-share basis as they tend to relatively fixed.

    A larger trust may also attract more investors, increasing its premium or reducing the bid-offer spread on its shares.

    On the flip-side, a larger trust may not be able to invest in the same proportion of assets going forward if some of its investments are illiquid – like smaller companies or unquoted assets. So the quality of its portfolio may suffer especially if it overpays in a rush to expand.

    Hope that’s useful – I must admit that answer was a lot longer than I expected when I first started writing it!!

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