After an uncertain start to the year, I’m happy to report that my rules-based SIF folio has managed to move ahead of the wider market in recent weeks. As a quick reminder, I recently published a more in-depth explainer of this strategy here.
At the end of the first half of the year, SIF was up by 3.8%, compared to a gain of just 0.5% for its FTSE All-Share index benchmark:
As I commented at the end of the first quarter, the portfolio’s heavy cash weighting has smoothed out the volatility we’ve seen so far this year. This is a feature of the way the portfolio works, not a deliberate strategy on my part. My stock purchases depend on a feed of new ideas from my SIF buying screen, and from time to time this dries up.
However, I’ve grown to appreciate the benefits of holding cash – even though it does sometimes lead to periods of severe FOMO when markets are rising.
Portfolio review
After a long dry spell, I’ve been able to add some interesting new shares to SIF (and my own holdings) during the second quarter. I’ll talk about them in a moment, but first, let’s take a closer look at the current state of the portfolio and its longer-term performance.
Here’s a snapshot of the current portfolio:
(SIF positions as at 1 July 2023)
The portfolio’s oldest holding, ME International (LON:MEGP) is also its most profitable, having double-bagged since I added the shares in March 2022. This stock continues to pass all of my screening tests and still doesn’t look too expensive to me. MEGP remains in the portfolio on a rolling-one-month review basis.
At the other end of the scale, recent addition Inchcape (LON:INCH) (which I discussed here) has not yet convinced the market of its positive momentum, despite issuing an in-line quarterly trading statement in April. I await the half-year results with interest.
Happily, none of my shares suffered profit warnings or triggered my 25% stop-loss rule during the second quarter, so sales have been limited to stocks that have reached my nine-month review data and no longer pass my screening tests. I’ve listed these below.
Portfolio performance:…
