My 2015/16 ISA Portfolio Returns – Beating The Market!

The tax year has come to an end today and with it ends my first year as an active dividend growth investor. Looking at the results over the past year, I am delighted to see that I have done really well and have outperformed the market – My portfolio returned 4.5% for the year whilst the FTSE 100 has returned -8% over this same period. I’m ecstatic that I have outperformed the maker by over 13%.

Whilst beating the market is a great feeling, I am more delighted to have began my investing journey this past year. I’ve gone from spending most of the money I earn to investing it in companies that pay me a dividend every few month. It is a great feeling when you open your email and find that you have been paid dividends as opposed to seeing a huge bill all the time. It is an eye opening experience when you realise that companies work for you and it need not be the other way round. As I have written before, money is a tool that should be used to make more money and this is exactly what I have been doing over the past year by investing.

For any non UK readers, the tax year here in the UK runs from 6 April to 5 April every year. In every tax year, individual resident in the UK get a tax shelter called an ISA and this shelters any gains and dividends from tax. The current amount an individual can invest in an ISA is £15,240 a year. Hence you see my investable amount is £15,240 and my portfolio year end dates are as such. There is a method too the madness.

CompanyCost (Amount Invested)Current market ValueDividends and Income ReceivedTotal Value (current market value + dividend)
Zambeef (ZAM)£2,699.95£2,720£0£2,720.00
Goldcorp (TSE: G)£1,396.32£1,526£15.77£1,541.77
BP (BP.l)£1,799.83£1,815£73.41£1,888.41
Shell (RDSB)£3,922.49£4,201£83.91£4284.99
Tritax Big Box (BBOX)£484.84£528£11.99£539.99
Cash£4,936.57£4886 (inc dealing fees)£0£4,886

As seen above, I invested £15,240 during the year in 6 different stocks. I ended with 5 stocks as BG got taken over by Shell. That is why you see £0 invested in BG but cash received amount of £79.34. Apart from all my BG stock turning into Shell (RDSB), I received £79.34 as part of the deal. The rest of the amount I invested in BG has been lumped in with Shell.

The table above also shows that just over 30% of my portfolio is in cash. Due to the market being overvalued for the vast majority of the year, I had decided to stick to cash as opposed to buying companies at any valuation. I have been patient and have only bought into companies once there stock prices hit my intrinsic value. By being patient and sitting on cash, I was able to deploy the cash during the two market downturns in August 2015 and January 2016 and buy into excellent businesses at very attractive valuations. This is how i managed to bag myself a yield of over 8% on BP and Shell.

Taking the patient approach and only investing in companies that I have researched well and found value is the reason that all my positions are currently in positive territory. As a long term investor, I know that it is nonsensical to look at the performance of a portfolio for a period of less than 5 years. But it does give you an idea about where your portfolio is headed.

The projected dividend income I will expect to receive from this portfolio over the next year is £503. This is a yield of 3.3% across the portfolio. Considering that I have a large chunk of my portfolio in cash, I am delighted with my dividend income so far. I will be buying shares in more excellent companies with the cash I hold and this will increase my dividend income figure. One of my main focusses will be to diversify my portfolio as I have a heavy weighting on oil related stocks – but I am not too worried about this as Shell and BP are wonderful businesses.

As the new tax year starts, I will have to open a new ISA and the limit for this year is once again £15,240. I will look to invest at least that much as I know how important investing is when it comes to wanting achieve financial freedom. Hopefully, with the knowledge and experience I have now, my second year in the world of investing will be even better than my first!

(Note that  whilst other investments I made in Genie Energy, Woodford Patient Capital Trust, Woodford Equity Income, Fundsmith Equity Fund and Jupiter Japan Income Fund, have done will , I have not included them here as I bought them outside my ISA).

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