September portfolio roundup

In September, the FTSE 100 in the end hardly went anywhere. Meaning for once it beat the NASDAQ, but it’s still hardly a performance to write home about.

My portfolio also had a rather lethargic feel to it. September was largely a month of inaction and mostly I just did my usual monthly investing into my HL-held funds.

Most of the action was in my ongoing quest to recover my money from ITI Capital which has taken over the clients assets previously held by SVS Securities. Also, in what was mostly a quiet month, I did make one mistake towards the end of the month.

One big mistake

On the 28th September I bought shares in ValiRx (LON:VAL) – a biotech company I’ve had on my radar since around the time I started investing about a decade ago. A day alter I sold for a 55% loss. Ouch!

Wha are the lessons? I think there are two big takeaways for me. One is don’t rush and try and trade. Secondly, stick to what you know. So from now on I’ll try and keep more disciplined and stick to the strategy I laid out in my August update. Buying the shares was an attempt at following momentum and it’s left me burnt.

Now as I recover and with VaiRx back out of my holdings, not that much has changed from last month as the table below of my portfolio is little changed.

How the portfolio looks now

HL holdings at end of Sept 2020
HL holdings at end of Sept 2020

Updates from the holdings

Diageo (LON:DGE) – this one is a long term hold in my SIPP along with Reckitt Benckiser (LON:RB) – the latter incidentally paid a dividend this month. Diageo put out a positive update which boosted the share price – which had been struggling due to Covid-19 concerns and especially its impact on the hospitality sector. The update said the US business was beating expectations and that its first-half outlook had improved since the end of June.

Sales improved compared to the second half of last year but sales and margins in the six months to the end of December will be lower than in the first half of last year.

Overall I’m glad to see the share price recovering and I don’t plan to do much more at this time but I imagine I’ll be adding at some point as I think Diageo is a quality business.

Team17 (LON: TM17) – results for the six months to the end of June showed H1 revenues grew by 28% to £38.8m. Profit before tax grew by the same amount to £13.3m and earnings per share rose 25% to 8.5p. The outlook for the gaming sector looks good and I think Team17 with its relationship with Tencent, its founder CEO and a major shareholder and its strategy focused on indie games all combine to make it a company I’ll keep holding.

So far investing in the shares in my ISA and LISA has been very profitable and helped offset losses elsewhere in the portfolio.

DS Smith (LON:SMDS) – shares recovered towards the end of the month following an improved trading update. I’ve covered previously why the share were getting pummelled and overall my holding is still in the red.

The good news for income investors is that DS Smith will pay an interim dividend after performing in line with expectations. DS Smith said like-for-like corrugated box volume performance improved over the period since the initial impact of Covid-19. August saw a return to growth which could well carry on as the group is boosted by FMCG and e-commerce need for packaging.

If the shares fall again I might average down to buy more, otherwise, over the coming months I hope they recover and if they do I plan to just sit back and relax and invest elsewhere.

Update from ITI Capital

Probably the best bit of news for me personally – and I don’t want to tempt fate here – was an email from AJ Bell on the 29th Sept saying they a valuation from ITI Capital. This is something which had been a long time coming. It means they can now move forward with a transfer of assets following the SVS Securities administration. If all goes well from here I may have access to well over half of my total capital by the end of October.

For background for those that don’t know, ITI Capital first got these assets back in July from the administrator. Since then they’ve been plagued by IT problems and given investors little to no communication when there will be access to the money. They don’t answer the phone, reply to emails or do anything to try and help their new potential customers. The popular brokers like AJ Bell do I’ve noticed.

I have a lingering suspicion that not all my assets will be correctly transferred to AJ Bell within the next month. That’s after more than thirteen months locked out of these shares, meaning I have been unable to sell underperformers like HSBC. The end could be in sight. I expect there will be a few more dramas though. So to anyone thinking cost is the only factor when considering a broker I’d suggest also looking at their strength and if possible their compliance because once a stockbroker goes to the wall, life for a private investor becomes very difficult.

Anyway, all in all, October could be an interesting month and I’m looking forward to it. Best of luck to all private investors out there, I hope your investments do well and you’re all doing well during this strange, strange year.

If you like this article please do share it on social media. You can also see the post on income growth versus growth investing here.

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