Dividend yield play portfolio study

This page keeps a record of the two mock portfolios set up to compare the performance of trading a share portfolio for dividends against the performance of trading an instalment portfolio for dividends.

On this page you can check:

For a detailed description of this study, and an explanation of how trading decisions are made, please refer to Dividend Yield Play Portfolio Study – Explanation and Rules.

 

Recent portfolio activity - June, 2005

The activity in June was attributed to the closing out of all outstanding positions.  Both portfolios held positions over ANZ, WBC and SGB and all yielded positive capital gain.  Also the portfolios received dividends payments by WBC and SGB which increased the pool of dividends.

With the portfolio study now complete, over $23,000 in dividends and franking credits was received by the instalment portfolio. This is compared to $9,257.64 in dividends and franking credits by the share portfolio.  The leveraged effect of instalments was the main factor in allowing the instalment portfolio to outperform the share portfolio.  Upon the conclusion of the portfolio study , the pre-tax return on investment for the instalment portfolio (20.00%) outperformed the share portfolio (8.45%).

Month by month performance

Portfolio performance to May 2005 Portfolio performance to June 2005
Share portfolio 7.88% 8.45%
Instalment portfolio     18.98% 20.00%

Going forward

A summary of the results is now being put together by ASX with the transactions being audited by Ernst and Young.  Once the summary has been finalised ASX will publish the results:

  • Final summary of results 
  • Analysis of returns
  • After tax performance (various tax rates covered)
  • Audit report of the study by Ernst and Young
  • Taxation treatment of shares and instalments by Ernst and Young

Historic portfolio performance*

Portfolio history Portfolio 1 - shares Portfolio 2 - instalments
1 July 2004 $100,000.00 $100,000.00
31 July 2004 $99,960.00 $99,960.00
31 August 2004 $102,019.92 $105,265.34
30 September 2004 $104,458.81 $110,695.49
31 October 2004 $105,191.85 $112,619.71
30 November 2004 $106,506.13 $115,799.29
31 December 2004 $107,466.00 $117,723.90
31 January 2005 $107,389.10 $117,611.38
28 February 2005 $107,875.42 $119,462.83
31 March 2005 $108,558.97 $121,175.21
30 April 2005 $106,710.26 $116,254.13
31 May 2005 $107,879.46 $118,982.13
30 June 2005 $108,453.37 $120,000.82

*Please note that historic performance is no indication of future performance.

 

Portfolio value

The tables below show the value of both portfolios as of 30 June 2005. On the last trading day of each month, both portfolios are re-valued taking into account dividends and franking credits paid, realised profit and loss, working capital, and a summary.

Summary as of 30 June 2005  Portfolio 1 - shares Portfolio 2 - instalments
Initial cash investment

$100,000.00

 $100,000.00
Initial investment in open trades $ - $ -
Realised capital gain/loss to date $1,435.73 ($450.49)
Total Brokerage to date ($2,240.00) ($2,240.00)
Trading capital $99,195.73 $97,309.51
Dividends $6,661.15 $16,323.00
Franking credits (fc) $2,596.49 $6,368.31
Total income  $9,257.64 $22,691.31
Realised net profit / loss* $8,453.37 $20,000.82
Unrealised capital gains/losses $ - $ -

* Includes total income (dividends and franking credits paid), plus realised capital gains/losses, minus brokerage cost

Overall value as of 30 June 2005 Portfolio 1 - shares Portfolio 2 - instalments
Initial cash investment  $100,000.00  $100,000.00 
(Less) Initial investment in open trades $ - $ -
Current value of open trades $ - $ -
Total income  $9,257.64 $16,323.00
Realised capital gain/loss to date $1,435.73 ($450.49)
(Less) Total brokerage to date ($2,240.00) ($2,240.00)
Total value of portfolio $108,453.37 $120,000.82

Breakdown of return on investment (ROI)

Pre-tax ROI analysis as of 30 June 2005  Portfolio 1 - shares Portfolio 2 - instalments
Total return on investment (ROI)# 8.45% 20.00%

ROI realised & unreal. CGT only (excl. div & fc)**

 -0.80% -2.69%
ROI (div & fc only) ^ 9.26% 22.69% 
Avg ROI per trade *** 3.02% 7.27%

# Total value of portfolio minus initial cash investment, divided by initial cash investment

**(Realised capital gain/loss plus unrealised capital gains/losses, minus brokerage) divided by initial cash investment

^ Total income divided by initial cash investment

*** Total return on investment is calculated as the total net profit (dividends, franking credits, realised capital gains/losses less brokerage cost plus unrealised capital gains/losses on investment position) over the actual capital outlay) 

Please note that past performance does not guarantee future performance. Return on investment is calculated as outlined above. Any other calculation method will lead to different results.

Portfolio transaction details

Download the transaction details for each portfolio here.