Thought I would take a quick look at my "Globally Diversified Technology, Growth and Hedge portfolio which currently consists of Apple, Microsoft and General Electric.
Of course it isn't really a separate portfolio, more a branch of the strategy, as all 3 investments reside in my portfolio (June 2012: Portfolio Update.).It has been a mixture of fortunes since its inception with a clear runaway success in Apple being followed by investments in Microsoft, Cisco, and more recently General Electric.
Cisco in particular led me on a roller coaster of multiple promises and disappointments which "eventually" spurred me to get rid.
But the decision was not fully made until a more attractive replacement was found in General Electric (August 2011: Portfolio Update.).
Thankfully this decision appears to be justifying itself with GE's subsequent performance and dividend payouts which has seen it put on 33.01%.
Having used Friday's closing prices this isn't a formal month end analysis but this is how each investment currently stands.
Capital
|
Divs
|
Total
| ||||
| Current Port. holdings |
Price
|
% gain
|
% gain
|
% gain
| ||
| Apple ** | $604.97 | 220.51% | 0.00% | 220.51% | ||
| Microsoft ** | $29.39 | 22.25% | 4.29% | 26.54% | ||
| General Electric ** | $19.77 | 30.34% | 2.67% | 33.01% | ||
| Former Port. holdings | ||||||
| Cisco *** | $15.59 | -27.76% | 0.47% | -27.29% 61.35% | ||
| Notes: | ||||||||||||||||||||||||||||||||||||
| * US Dividends adjusted for exchange rate and 15% withholding tax ** Sterling : Dollar exchange rate = £1: $1.555 as at 12/07/12 *** Sterling : Dollar exchange rate = £1: $1.633 as at 30/08/11 | ||||||||||||||||||||||||||||||||||||
Cisco remains a leader in its field and should be an obvious beneficiary of the anticipated investment required to maintain and increase data carrying capacity for smarthphones et al.
Unfortunately, reined in spending and hard chasing by rivals to catch up, has hit the company's margins in recent years when it appears to have failed to innovate and adapt to clients changing needs and budgetary constraints during a period of global economic woe.
Apple of course, has been a huge success but it remains to be seen if they can maintain anything resembling recent performance given that it is up against an army of competitors with Samsung and Google leading the pack.
Steve Jobs untimely passing has also seen the elevation of Tim Cook to CEO and an announcement that the company will this year resume paying a dividend.
Microsoft remains Microsoft. the company has matured into a cash cow on the back of its Windows OS and Office Suite, but the company has struggled to stay in touch with each emerging generation and innovate beyond PC's.
It has had recent success in XBox and its Kinect system which has shown it can challenge the industry incumbents in Sony and Nintendo.
But it has struggled to establish a foothold in smartphones and tablets although there is still hope given the critical acclaim for its latest incarnation and the possibility that it might yet take control of Nokia's smartphone division.
Similarly Windows 8 is readying for launch which will show how well the company understands tablet computing with its intuitive and tactile touchscreen experience.
GE is also a recovering industrial giant that makes things with a hugely diverse spread of products and resources.
The company has significantly streamlined and restructured following the "credit crunch" in order to reduce reliance and capital requirements from its GE Capital cash cow.
GE Capital itself is also fast recovering and ready to pay dividends to its parent company.
Energy, Infrastructure, and Medical Instruments are also part of the portfolio as well as Aerospace where the company is the No 1 engine manufacturer in one of my favourite sectors.
Due to its long cycles of investment and return Aerospace remains a globally important sector with just 3 major players and huge barriers to entry.
As such GE continues to be heavily engaged and invested in new airframe programs such as Boeing's 787, the Airbus A380, Boeing's 737 Max, and the Airbus A320 Neo.
Jeff Immelt - CEO, has also stated that the company looks set to resume double digit sales increases (GE Update: Double digit earnings growth in 2012!), with analysts also suggesting healthy increases to the dividend.
All quite pleasing then with a cumulative net gain of 61.35% from the 4 investments.
Looking forward then I'm also not averse to adding more diversity to my portfolio with further US investments such as: United Technologies, Google, Teva and Berkshire Hathaway, and I'm also still interested in some potential European investments with Pharma's, BMW and VW also appealing to me.
In all cases the tax situation is slightly more complicated with some countries like Germany applying a 30% withholding tax to its dividend payouts to non nationals whilst the US retains 15%.
As ever there is an additional note of caution required due to the risk posed by volatile exchange rates as well as the different rates of currency exchange commission applied by your chosen broker.
As with your holiday money stronger sterling obviously gives you more purchasing power.
As with your holiday money stronger sterling obviously gives you more purchasing power.
With strong recognisable brands and extensive global reach these 3 investments also have an obvious gearing to any US/DJIA inspired recovery.
So, for me at least, all 3 remain long term holdings for my portfolio and (fingers crossed!), look set for ongoing gains into the future.
Related posts:
- June 2012: Portfolio Update.
- Globally Diversified Technology, Growth, and Hedge portfolio update.
- Globally Diversified Technology, Growth, and Hedge portfolio!!!
- August 2011: Portfolio Update.
Related posts:
- June 2012: Portfolio Update.
- Globally Diversified Technology, Growth, and Hedge portfolio update.
- Globally Diversified Technology, Growth, and Hedge portfolio!!!
- August 2011: Portfolio Update.
