September 2012: Portfolio Update.

Right its portfolio update time again and despite the disappointment of not maintaining the all time high reached mid September, my portfolio has continued to move forward month on month with a gain 0.98%, helped by a raft of dividends from BG, Microsoft, SSE, and BP.
But countering the dividends received is a short term negative impact from portfolio shares now trading ex-divided but pre-payment. 
These shares are: Aviva; IG Group; GE; Morrison's; and Centrica.

Worth noting is that following Mario Draghi's proposed ECB intervention (Super Mario powers up the markets with bond purchase program!), and then the US Federal Reserve launching QE3 (was Bernanke waiting for maximum dramatic impact?), my portfolio's value surged 4.94% in the month to an all time high (as markets relief rallied), before retreating back (again with markets), to finish September up just 0.98%.

However, back to the present review, and despite trading ex-dividend, GE made the portfolio's largest individual gain of 7.7% as the shares benefitted from a positive outlook.
The only other notable gainer being William Hill amidst a joint bid for Sportingbet which could lead to it cherry-picking Sportingbet's Australian assets should the bid prove successful.

BAE experienced a big surge into the 360p's following leakage of news that it was in advanced talks to merge with EADS, the owner of Airbus (BAE takes off on proposed merger with EADS!), with the 2 companies seeking to create a so called "European" champion in defence and aerospace. 
This instant euphoria soon passed though as reality set in on all sides as to the potential for political complexity and national interest, as well as major shareholder concern (on both sides), that the 60:40 weighting represents a fair valuation.
Looks an uphill task to me.

National Grid had a similar roller coaster as it retreated with markets before rallying back to just shy of 700p as Thisismoney reported that GE Capital was planning a 900+p per share bid for the company (GE Capital to acquire National Grid for £9+ share!), which, despite the specifics of naming GE Capital and the price, still seems more speculation than fact to me.

Vodafone is also proving a little volatile at the moment given continued speculation over any special dividend that the company might be due to receive from its significant investment in Verizon Wireless, particularly as its European markets struggle for growth and the Indian Government seeks to rewrite its own tax laws as it goes along.

Apple also missed a step after hitting $700 in the wake of the much anticipated launch of iPhone 5. This came after the company announced that they had sold out 2m pre-orders rather than the analyst speculated 5m. 
Added disappointment came from the glitchy maps application introduced by the company to replace Google Maps.
This combination of disappointments was enough to pull Apple back to $667.

Sterling has also strengthened to £1 = $1.61603 ($1.587 as at 30 Aug 12), which has also shaved a little of the valuation of my portfolio's 3 US holdings: Apple; Microsoft; and GE.

Individually then, and as at the end of September, the portfolio is as follows:

Merchant Adventurer's Index
			Forecast	1 month	YTD	21 mth
	Price	% holding	Div. yield	% gain	% gain	% gain
R-R	875.50p	31.72%	2.33%	2.68%	12.93%	35.31%
National Grid	683.00p	17.11%	5.99%	-0.07%	9.28%	23.51%
Aviva	318.70p	10.65%	8.26%	-2.27%	5.45%	-5.67%
Apple **	$667.26	6.00%	0.27%	-1.44%	58.41%	95.09%
BP	436.50p	5.43%	4.68%	-1.10%	-3.92%	-4.63%
IG Group	446.00p	4.57%	5.17%	3.60%	-2.56%	-6.54%
William Hill	316.80p	3.36%	3.45%	5.49%	56.21%	85.59%
General Electric **	$22.71	2.60%	2.47%	7.70%	21.91%	43.68%
Centrica	327.80p	2.34%	5.01%	0.34%	13.31%	-1.15%
SSE	1392.00p	2.19%	6.05%	1.75%	7.82%	13.63%
Microsoft **	$29.78	2.16%	2.41%	-5.06%	10.29%	2.94%
BG Group	1250.00p	2.08%	1.31%	-2.95%	-9.19%	-3.55%
Morrisons	285.20p	2.05%	4.13%	1.86%	-12.57%	6.58%
Vodafone	175.75p	1.94%	7.41%	-3.17%	-1.76%	9.07%
BAE Systems	325.10p	1.85%	6.02%	2.07%	14.03%	-1.48%
Tesco	332.00p	1.51%	4.54%	-1.37%	-17.71%	-16.77%
Cash		2.46%	0.00%
		100.00%	4.07%
				1 Month	YTD	21 mth
Virtual Portfolio gain (incl. Dividends)
- 1 month gain   1593.09 -	1608.75			0.98%
- YTD gain         1409.55 -	1608.75				14.13%
- 21 month gain 1264.20 -	1608.75					27.25%
- 33 month gain 1000.00 -	1608.75					60.87%
FTSE gain (excl. Dividends)
- 1 month gain   5571.15 -	5742.07			0.54%
- YTD gain         5572.28 -	5742.07				3.05%
- 21 month gain 5971.01 -	5742.07					-3.83%
- 33 month gain 5412.88 -	5742.07					6.08%
Transactions:
07/09/2012	Div	BG Group @ 7.64p per share
19/09/2012	Div	Microsoft @ 10.47p per share (act rec'd)
21/09/2012	Div	SSE @ 56.1p per share
25/09/2012	Div	BP @ 5.02p per share (act rec'd)
Notes:
*     US Dividends are adjusted for exchange rate and 15% withholding tax
**   Sterling : Dollar exchange rate = £1: $1.61603 as at 30/09/12 ***  Gains are shown from period base date (e.g. YTD, or 21 months), or purchase date if less than period base date.

In chart form, the portfolio's performance continues to look positive with the aforementioned 0.98% gain in September (incl. dividends) v. the FTSE100's gain of 0.54% (excl. dividends).

Click to enlarge, close to return.

Looking ahead it still feels like we may have passed through a milestone following the ECB's proposal to intervene (under certain conditions), and address speculator driven imbalances in sovereign borrowing rates. 
It might not yet mean that we have hit a floor to the problems but, in Europe at least, the penny might finally be dropping as to the extent of the area's problems and a realistic concerted step to addressing it may have been put in place.
Preventing the situation happening again still comes back to financial prudence and control but that is a more of a mission statement than an immediate solution to past profligacy.
Now if the US could also agree a political consensus on addressing its long term debt!

The BAE situation could quickly turn into a debacle that might hamstring the shares for a time and looking at William Hill, they are in a number of bid situations (probably add Playtech to this list), that could draw on the balance sheet.
And whilst William Hill shares continuing to move beyond 300p is positive they are starting to look more expensive on current prospects with the forward yield falling below 4% and no forecast growth next year.

Dividends will continue to play a part with 4 holdings due to trade ex.dividend and 2 more due to payout.

Ex Div.	Company and payout	Due date
19-Sep	Aviva @ 10p per share	16-Nov
19-Sep	IG Group @ 16.75p per share	23-Oct
20-Sep	GE @ 17c per share	25-Oct
26-Sep	Morrison @ 3.49p per share	05-Nov
26-Sep	Centrica @ 4.62p per share	14-Nov
10-Oct	Tesco @ 4.63p per share	21-Dec.
17-Oct	BAE @ 7.8p per share	30-Nov
24-Oct	R-R @ 7.6p per share	04-Jan.
24-Oct 07-Nov 07-Nov	William Hill @ 3.4p per share Apple @ $2.65 per share BP @ 9c per share	07-Dec.  15-Nov 21-Dec
13-Nov	Microsoft 23c per share	13-Dec
?? Nov	National Grid @ ??	?? Jan
?? Nov	Vodafone @ ??	?? Feb.

I'm not holding my breath that economies are stabilising but am at least feeling a little more positive about the prospects for my portfolio as we move into the last quarter of 2012.


Related post links:
- Super Mario powers up the markets with bond purchase program!
- BAE takes off on proposed merger with EADS!
- Part 2: BAE takes off on proposed merger with EADS!
- GE Capital to acquire National Grid for £9+ share!

Links to Portfolio updates:
- August 2012: Portfolio update.
- July 2012: Portfolio update.
- June 2012: Portfolio Update.
- May 2012: Portfolio Update.
- April 2012: Portfolio Update. 
- March 2012: Portfolio Update. 
- February 2012: Portfolio Update. 
- January 2012: Portfolio Update. 
- December 2011: Portfolio Update.