Index fun (ds)

On a rainy afternoon I decided to learn a bit more about Index funds, partly to understand if they should play more of a role in my investing. I don't have any money invested in them currently, and wondered if I should simply consider them as a ready made portfolio...as usual it ended up needing a few diversions in order to satisfy my curiosity...

What is the stock market?
Obtaining a listing on a stock exchange essentially enables a business access to capital, and would also potentially raise their profile through a public listing. They start life on the stock market through an IPO - an Initial Public Offering or stock market launch during which investors can buy shares in the business. The London Stock Exchange runs several markets on which a company can be listed - the two most of us are interested in are the Main Market and the Alternative Investment Market (AIM). The AIM has a simpler admission process and lower fees so is typically used by smaller and early stage businesses, but some of the AIM constituents are household names and have a market capitalisation comparable to some businesses in the FTSE 100, e.g. Burford Capital, Abcam, ASOS and Fevertree.

The London Stock Exchange (LSE) is managed by the helpfully named London Stock Exchange Group - which is also a publicly traded company listed on the LSE. According to the LSE there are over 2600 listed on the Main Market, from over 60 countries, plus another 1000+ listings on the AIM. The LSE enables stocks to be traded, and publishes price information on it's stocks every 15 seconds during trading hours.

What is an index?
Indices are slices of the stock market, with some sort of overarching logic driving what is included in that particular slice. They are often used to measure performance of that particular collection of stocks, against which the performance of other funds and/or portfolios can be assessed. A few such indices are:

• The MSCI world is an index using the share price of over 1600 business across the globe
• The S&P 500 is an index of 500 of the largest market capitalisation companies listed on 3 US stock exchanges
• The FTSE 100 is an index of the 100 largest market capitalisation companies listed on the London Stock Exchange

There are more indices than you can shake a stick at, against which you can measure the performance of your portfolio. 

Index funds
So, getting finally to the starting point, Index funds...most major investment providers have funds which track an index into which you can invest e.g. ishares or vanguard. An index tracker fund will be composed to mimic the index via a couple of methodologies - either directly holding the shares in exactly the weighting as the index, or taking a sample of these shares in order to reflect the same underlying performance of the index.

The index as a portfolio
The index I'll focus on, mainly due to familiarity and convenience is the FTSE 100, which is maintained by FTSE Russell, part of the London Stock Exchange Group. This is an index composed of the 100 shares listed on the LSE with the largest market capitalisation (market cap = number of shares x share price). Shell have two flavours of their shares, both of which are listed in the FTSE 100, so there are 100 companies making up the FTSE 100, but 101 different stocks listed.

The FTSE 100 isn't a portfolio that is static, it is reviewed and, potentially, changed quarterly. The review process is described here. Each quarter, at the time of the review, any shares not currently in the FTSE 100, that have a market cap that puts them in the 90th position in the FTSE 100, or above, gets included in the index, and the shares with the lowest market cap are removed from the index. And any shares in the FTSE 100 that are valued at the 111th position in the wider FTSE All Share or below are removed from the FTSE 100, and are replaced by the shares outside the FTSE 100 with the largest market cap. For example as at June 2019, Hikma Pharmaceuticals and Easyjet hit the conditions for removal, whereas JD Sports and Aveva met the conditions for inclusion, a nice summary of this can be seen here.

Working on the assumption that share price performance more or less reflects the underlying performance of the business, we can see struggling business being cut from the portfolio, and high performing businesses being included. In the month of June 2019, we see two companies being promoted that are embracing technology, one a software company, the other a clothes retailer with a great ecommerce offering. From a portfolio management point of view this feels very much like cutting losers, and keeping winners. Since the Index does this rebalancing every quarter, so too do the funds tracking them.

Portfolio composition
My personal portfolio composition can be seen here. My aim is to mainly invest in defensive dividend paying stocks. How does the FTSE 100 measure up in this regard, there is plenty of information on the index here, I've taken the chart below from the Vanguard FTSE 100 tracking fund :

Vanguard FTSE 100 UCITS ETF Sector Composition (May 31 2019)

And below is a comparison from FTSE Russell between the FTSE 100 and the FTSE All Share:

FTSE Russell index comparisons

Taking the Vanguard summary stats, it is clear there is a good chunk of the FTSE 100 portfolio that is very cyclical - Financials, Oil & Gas, Basic Materials and Industrials. These amount to around 56% of the FTSE 100. Add in another 3% for Utilities exposed to a potential risk of nationalisation (or at least being used as a political football in the UK), and there is getting on for 60% of the index that I would prefer to not be invested in. Which is not to say I wouldn't invest, but have a preference to put my money into less cyclical businesses, that offer some distinct competitive advantage other than price.

In addition it's difficult to see where the growth is going to be generated. We've seen from the US and China how technology is driving their stock markets, there is precious little of this in the FTSE 100. I'm sure these companies will eventually float to the top, assuming they are not acquired and absorbed into other business before they get there; as at June 2019, Microfocus and Sage are the two "technology" companies. This compares to technology making up around 21% of the S&P 500.

So, does it matter how the FTSE 100 is composed? Well, for example, since BP and Shell account for around 17% the oil price is going to push around the index valuation considerably. If some headline hits the banking industry - that's 12% of the index. At the other end of the index, if Sage had a significant increase in price it would make little difference to the index as both they, and Microfocus, combined make up less than 1% of the index.

Although the FTSE 100 is a slice of the stock market of businesses listed in London, as the LSE Issuer Services report shows, only about 29% of the revenues of the 100 listed businesses are actually from the UK. So there is an inherent currency risk too - stocks list on the LSE in Sterling, so revenues taken outside the UK need to eventually be reflected in a GBP stock price. This has probably proved something of a boon for a number of companies over the last few years as the Brexit omnishambles has kept Sterling depressed vs. both the Euro and the Dollar.

The bottom line
The FTSE 100 closed at 6754 on June 16th 2014. 5yrs later on June 16th 2019 it closed trading at 7345, an 8.8% increase. It's Price to Earnings ratio is around 14, so may be on the cheap side with potentially more upwards movement on the way, and the dividend yield on the Vanguard tracker mentioned above is 4.76%, which might also reinforce the idea that the FTSE 100 currently looks a bit undervalued.

The S&P 500 closed at 1962 on June 16th 2014. 5yrs later on June 16th 2019 it closed trading at 2886, a 47% increase. It's PE is around 19, and the dividend is 1.67%. Maybe the index is expensive, with little scope for upwards movement.

The FTSE 100 is not structured in a way I find especially attractive, too heavily focussed on cyclical businesses, particularly commodities and financials. However, although the dividend yield is attractive, I think there are individual businesses within it that look more attractive investments.

May 2019 portfolio update

Most of May was dominated by Trumpy being particularly bonkers. Then came the latest chapter in the Brexit omnishambles, and the PM resigning. All of which resulted in a degree of turbulence in the markets. In a way this is appreciated since I'm looking to buy rather than sell, so lower prices are welcomed and most of what's on my shopping list looks expensive. There are a couple of things in foreign markets that I'd like to buy as their prices are more attractive, however the state of sterling counteracts the lower stock prices in my view. The combination of high prices and turbulence left me sitting on my hands this month in anticipation of more sensible prices over the coming weeks as the prospect of a new broom at no. 10, more Brexit, and Trump's twitter account disturb the markets.

Portfolio
A few wobbles in the markets this month. The portfolio just kept it's head above water, being up 0.2% compared to my chosen benchmark the Vanguard FTSE All Share Accumulation fund which was off by -3% over the same period.

Top banana in May was Abcam (ABC), managing a 9% increase over the month.

The laggard for the second month in a row, was Saga (SAGA) dropping -28%. I'm not too concerned as it was a small punt taken on a turnaround...it's got to turn quite a way now though...Note to self, silly boy, make sure you've got a stop loss in place if dabbling in future.

The acquisition of Manx Telecom by Basalt Infrastructure was finalised over the month, so that's now out of the portfolio, departing with a 32% gain. Proceeds of the sale is added to the cash pot along with dividends, which pleasingly have accumulated to enable a purchase funded entirely from profits and dividends.

Bitcoin chugged upwards over the month, and seems to have settled above $8k. Hopefully volumes will stay up and the market manipulators will find life more difficult as a result. Alt coins are starting to enjoy themselves and I'm looking forward to a bit more green across the crypto portfolio over the summer. Traded out of a few altcoins and will be moving more into BTC when the prices are right - overall pretty much at breakeven after a few months in the red.

Sell in May (or October)?

2018 Winter slide

From the start of October 2018 until the end of December 2018 the stock markets saw a pretty big sell off. Various concerns over the global economy, China, Trump, the Federal reserve, Brexit all combined with historically high valuations with some of the big tech companies to create a very delicate balancing act for the stock market. It couldn't last and the US stock market rolled over. On 3rd October the S&P 500 was at 2925, by 21st December it was at 2351 a 20% drop. In the UK the FTSE 100 had been under pressure since May 2018 and had been losing ground over 6 months, but followed the S&P lower during the winter, losing 12% from 7510 on 3rd October to a low of 6584 on 27th December.

This was followed by a new year rally that saw the S&P rise 25% from December and the FTSE 12%.

I remember reading and listening to various pundits remarking on the need to sell stocks and move into cash. I didn't, and was wondering what would have happened had I done so. If I had managed to catch that wave would I now be looking at my portfolio that was 12% higher?

I'll take a retrospective look at this using the 3 biggest holdings in my portfolio - Unilever, GlaxoSmithKline and Compass.

Wind back the clock - Unilever
Unilever put in a lot of effort to shoot themselves in the foot in 2018. They have a head office split between Holland and the UK and they had proposed to consolidate this into a single location in Holland. A knock on effect would have meant they would have to delist from the main UK indices, although they could still be traded in the UK, funds holding stocks listed on the main indices, index trackers etc. would have been forced to sell their Unilever shares. This proposal required approval by investors, and there was some disquiet and disagreement between investors, particularly large institutional investors who questioned the logic of the move, and company management. The share price had a bit of a wobble and was probably a little lower than it would otherwise have been as a result. On 3rd October 2018 it stood at 4224p, on 27th December when the FTSE 100 hit it's low point, the Unilever share price was 4080p, 3.5% lower. A month later on 28th January it was 3941p, 6.5% lower than October. It hit similar low points in the middle of October and the end of February. At what points would I have bought and sold?

I probably would have sold at some point in the first couple of weeks in October, as the pessimistic outlook from many commentators started to play out across the markets. I would probably have looked for a nice round number, maybe waiting for the price to reduce by 10%...but it never would have got that far. As noted above a "perfect" trade would have resulted in a 6.5% increase.

But I would have incurred commission on the purchase, plus tax, and if I had not held the stock on the ex-dividend date of 1st November, I would have missed the quarterly dividend payout too.

I could have got that 10% by selling at the end of August and buying back in at the bottom of one of the dips during the winter. Whilst the FTSE was sliding, and did so from around May to December, Unilever wasn't following suit. It see-sawed through the summer and autumn, and had a 2 month mini-rally all of it's own from mid-October to mid-December.

Wind back the clock - Compass
Compass seems to be a particularly pedestrian and uneventful investment, it just seems to plod slowly onwards. Perfect. However, it got a wriggle on during the autumn sell off, it was at 1709p on 2nd October, and dropped 13% to 1483p 20 days later. But if you'd been sluggish you would have missed it, as by the 21st November it was back to 1697p. After which it meandered until the end of January when it decided to wander upwards.

I could have grabbed a 10% bounce, and could have avoided ex-dividend cut offs, but I would have had to have been quick. I would also have been moving against all of the indicators that would have caused me to sell in the first place, as the FTSE continued to drop whilst Compass turned upwards.

Wind back the clock - GlaxoSmithKline
The GSK share price has been more volatile than either Unilever or Compass, and has looked less than nimble as it has tried to turn itself back into a business making a decent profit. The share price probably reflected a busy year during which GSK got a break from delays in competitors bringing generic versions of it's Advair product to market, offloaded Horlicks, got into bed with Pfizer, and started the process of splitting it's business into a couple of logical chunks.

During the market doom and gloom, on 3rd October, GSK stood at 1554p, had dropped to 1429p by the 12th October - an 8% wobble. But a week later, by the 19th October the price was back where it started. It's biggest move over the winter was a 12% drop from 1621p on the 30th November, to 1418p on the 6th December.

Like Unilever and Compass, GSK isn't neatly aligned to the wider FTSE movements during this sell off. There are clear periods of the price increasing and the index continues to sell off. As with Unilever, the quarterly dividends paid by GSK mean that there was an ex-dividend date during this sell off - 15th November, so jumping in and out of the stock might have required navigating that date too. But there were clearly periods when some cunning market timing would have been profitable.

Conclusion
There are some obvious opportunities to make some extra profit it I could time these jumps into and out stocks. And in answer to my earlier question about making an extra 12%, it was probably possible, at least for some of my holdings.

But it seems like terribly hard work to get it right. I think I'd rather be lazy, at least until I have more time on my hands to keep a beady eye on the markets. I enjoy reading about the economy and listening to pundits pronounce on the next amazing/ awful move from the markets, but it doesn't really excite me. I have a 20 year timeframe in mind for these investments, and whilst I intend to keep a watch on them, I shan't be doing so every day.

April Portfolio and Purchases

After a slight hiatus during March, life was back to normal in April. The March pause meant I had some budget carrying over into April so 2 additions this month.

Portfolio
April once again had markets chugging upwards. The portfolio was up 1.4% compared to my chosen benchmark the Vanguard FTSE All Share Accumulation fund which was up 2.7% over the same period.

April top dog was Computacenter (CCC), +9% following a positive trading update at the end of the month.

Bringing up the rear, sick as a dog Saga (SAGA) dropped -47%. Thankfully this was a small punt taken last year - now considerably smaller. Unfortunately several very positive results last year from similar contrarian picks led me down this dubious route. The results from the company gave the impression the management have been asleep at the wheel, and I have no confidence in any turnaround. I'll hang on for a couple of months as the markets usually get carried away particularly on bad news, so I might see a slight bounce, but I'll sell and recycle the money into something more sensible in the near future.

April share purchase 1: ABC
Abcam (ABC) sell research tools and products for academic pharmaceutical and biotech labs. They are listed on the AIM but they are no tiddler, they are one the larger companies on the AIM with a market capitalisation around £2.5bn which puts them alongside household names such as Britvic or the Royal Mail (in market cap terms at least). They have been in business since 1998, and have grown up selling research grade antibodies to laboratories around the globe, and now sell a range of biological products and testing toolkits. If you fancy purchasing yourself a few antibodies, you can fill your boots here.

They have a very solid set of financial results including ROCE averaging in the high teens over the last 10yrs, great margins and no debt. My preference is for defensively placed companies that are likely to deliver solid returns no matter what economic conditions prevail. I am also looking for companies embracing technology, that are likely to be driving progress in their fields rather than following others, and preferably those establishing some kind of dominance within their markets. Abcam ticks a lot of these boxes.

April share purchase 2: RB.
To the FTSE100 for purchase number 2 in April - Reckitt Benckiser. News about Indivior's run in with the US Department of Justice led to some nervousness about collateral damage to prior parent company Reckitt Benckiser (RB). Indivior was Reckitt Benckiser Pharmaceuticals in a previous life, but was spun out of the parent company in 2014. RB insist any wrongdoing happened after the demerger, and have made a provision of £313m to cover any liabilities (see note 19 in the 2018 annual report). As a result the RB price dipped by over 9% over the course of a few days following the Indivior news. I like the look of RB, as I wrote here, with the exception of the debt it took on to fund the Mead Johnson purchase, they have a very respectable set of numbers. Plus they are exactly the sort of defensive business that I would prefer to invest in, and should be comfortable cuddling up next to Unilever in the portfolio.

Diversification - Japan

Geographical restrictions

Currently my portfolio is entirely invested in businesses listed in London, although they are mainly large international businesses, which have only a small proportion of their revenues from the UK. The list of companies I would be comfortable investing in is also drawn almost entirely from the London indices at the moment. I want to focus on quality businesses irrespective of their location, and am gradually adding to the list of potentials with some US based additions. Whilst I have some grasp of what's happening in the US and Europe, I'm less familiar with businesses listed on Asian indices. Since the US and Europe are potentially easier to purchase on my current ISA platform, and Asia more difficult, I’ll take a look at some alternatives to see if there are any attractive funds, investment trusts or ETF’s available. I’ll start with Japan.

Going passive

The simplest first option would be to put money into a passive tracking fund, something that simply tracks the performance of an index.

There are two indices of note in Japan – the Tokyo Stock Price Index, known as the TOPIX, and the Nikkei 225. The TOPIX is like the FTSE, in that it ranks it’s constituents based on market capitalisation, whereas the Nikkei ranks it’s 225 members according to price (using the Japanese Yen). The difference being that the Nikkei gives a greater weighting to higher priced stocks, whereas the TOPIX is influenced by higher capitalisation companies.

So what sort of easily accessible trackers are there for these indices? A quick rummage on the internet found a cheap Vanguard offering but tracking the MSCI Japan index rather than either the TOPIX or Nikkei. The MSCI provides a number of tools, analytics and (of most relevance here) - benchmark indices that institutional investors can use for measuring performance of their funds. According to the MSCI Japan Index documentation, the index is "...designed to measure the performance of the large and mid-cap segments of the Japanese market..." and covers around 85% of the market.

The Vanguard tracker accumulation fund has an ongoing charge of 0.23%, and according to the performance data they provide, over the last 5 yrs would have turned a £10000 investment into £16633 (in March 2019), a 66% increase, which is an annualised return of around 11%. I'll take this as my benchmark and see if there are other funds out there fishing in this pond that offer a better return.

Funds

There are more funds offering some sort of investment action in Japan than is sensible - 76 on offer from my current ISA provider. In order to restrict this a little I’ll take only the accumulation version of the funds (i.e. dividends are automatically reinvested into the fund), and only those with a rating from Morningstar (this tends to exclude newer funds). Based on the on the annualised return over 5yrs gives me the following 5 funds at the top of the list:

Fund name	5yr annualised return (%)	Ongoing Charges (%)
Legg Mason IF Japan Equity X	23.55	1.02
Bailey Gifford Japanese Small Co B	22.07	0.63
Lindsell Train Japanese Equity B	17.78	0.79
JPM Japan C	17.33	0.90
Bailey Gifford Japanese B	15.60	0.63

All of the above have a Morningstar rating of 5 stars, and all have a KIID risk rating of 6

If I make the assumption that the annualised returns and charges are going to remain roughly the same, I will subtract the charges from the annualised return to give a "Charge adjusted return":

Fund name	5yr annualised return (%)	Ongoing Charges (%)	Charge adjusted returns (%)
Legg Mason IF Japan Equity X	23.55	1.02	22.53
Bailey Gifford Japanese Small Co B	22.07	0.63	21.44
Lindsell Train Japanese Equity B	17.78	0.79	16.99
JPM Japan C	17.33	0.90	16.43
Bailey Gifford Japanese B	15.60	0.63	14.67

Quite a range of returns. Just for fun I’ll add in the total returns based on the charge adjusted figures:

Fund name	Charge adjusted returns (%)	Total returns (%)
Legg Mason IF Japan Equity X	22.53	176
Bailey Gifford Japanese Small Co B	21.44	164
Lindsell Train Japanese Equity B	16.99	119
JPM Japan C	16.43	114
Bailey Gifford Japanese B	14.67	98

So at the top of the table, Leg Mason would have turned every invested £100 into £276, whereas Bailey Gifford Japanese would have the same £100 into £198. Doesn’t take a genius to see which investment is preferable, so two funds moving into position as favourites.

The fund managers have been in charge for different periods too:

Fund name	Total returns (%)	Mgr start date
Legg Mason IF Japan Equity X	176	1996
Bailey Gifford Japanese Small Co B	164	2015
Lindsell Train Japanese Equity B	119	2004
JPM Japan C	114	2012
Bailey Gifford Japanese B	98	2016

I wonder if it is coincidence that that best performing fund has had the same manager for the longest period? The dates also suggest that the two Bailey Gifford funds have had a relatively recent handover, so any credit/ blame for the fund performance should be directed at the managers’ predecessors rather than current incumbents. A plus mark for Lindsell Train in that regard having been in charge of their fund for considerably longer.

And finally if I want to invest in an actively managed fund, I’m paying the fund manager to put my cash into the businesses that they see having the best return on investment both today, and going forwards. I’m expecting them to have selected a relatively small number of businesses – having a massive fist of different businesses doesn’t strike me as helpful – I might just as well get myself a cheap tracker fund and save myself some money on charges. I’m completely ignorant about the state of the Japanese economy, but I’d rather any funds I invest in are in more defensive companies, such as consumer goods, healthcare, and in tech, rather than, for example in highly cyclical companies or commodities. My preference would be for a fund to build it’s portfolio, then leave it alone for compounding to do the heavy lifting. Here's how the funds' portfolios breakdown across sectors:  

Fund name	Sectors invested (%)				Number of holdings
	Consumer Defensive	Healthcare	Technology	Total
Legg Mason IF Japan Equity X	17	18	24	59	44
Bailey Gifford Japanese Small Co B	5	11	35	51	71
Lindsell Train Japanese Equity B	41	21	24	86	23
JPM Japan C	16	6	25	47	53
Bailey Gifford Japanese B	3	9	12	24	39

Two funds clearly stand out here:

• Lindsell Train investing in only 23 companies, of which 86% of their fund is in Defensive/ Health/ Tech holdings
• Bailey Gifford Japanese are only invested 24% in Defensive/ Health/ Tech holdings.

Based on this bird’s eye view of these funds I’m losing three of them. JPM and the two Bailey Gifford funds. Leg Mason, and Lindsell Train have experienced managers at the helm; I don't consider the Leg Mason portfolio of 44 companies excessive in number and it’s difficult to argue with their returns. The portfolio structure of Lindsell Train appeals but it does lag Leg Mason, however, if either the global economy or the Japanese economy has a few wobbles, Lindsell Train would appear to have positioned the fund to cope. Whereas Leg Mason may require an amount of chopping and changing. Leg Mason has the highest ongoing charges, which would likely increase if there needed to be a bit of buying and selling, however, Lindsell Train have a cheeky 4% initial charge – so just buying into the fund would leave me down 4% (not taking into account broker fees etc.) – maybe not a big deal with a longer term investment horizon, but unnecessary in my view.

To return to the Vanguard benchmark tracker, the 66% return on offer doesn’t really stack up against the two above funds – Leg Mason making nearly 3x and Lindsell Train 2x the tracker returns.

Investment Trusts

The final area to check out is that of Investment Trusts, now I know the performance of some of the funds against which the Investment Trusts are competing, I can narrow the search a little more. Two offering higher returns are both run by Bailey Gifford:

Fund name	5yr annualised return (%)	Ongoing Charges (%)	Charge adjusted returns (%)
Bailey Gifford Shin Nippon (BGS)	25.35	0.76	24.59
Bailey Gifford Japan (BGFD)	19.13	0.73	18.4

Both trade on a small premium of around 4% (i.e. the cost of a buying a share in the Trusts is around 4% higher than the Net Asset Value (Assets – liabilities)). This isn’t massively different from the average premium for the last 12 months, so I’ll make an assumption that this is going to remain fairly stable and not impact any investment. So both Trusts look like they have put in a decent performance that is comparable to the funds above, outperforming the Lindsell Train offering for example, by putting in a total return over 5yrs of 200% for BGS, and 133% for BGFD.

The manager of the BGFD team retired in 2018, with her deputies now running the Trust which is invested in 70 businesses, whereas BGS has had the same manager in charge since 2015 and is invested in 74 businesses. Whilst I don’t really see the need for such a large number of holdings both teams have outperformed the tracker fund by some margin. Given my preference for more defensive businesses and tech over some other sectors, here’s how the two trusts fair:

Fund name	Sectors invested (%)				Number of holdings
	Consumer Defensive	Healthcare	Technology	Total
Bailey Gifford Shin Nippon (BGS)	6	13	32	50	74
Bailey Gifford Japan (BGFD)	2	8	22	32	70

Both Trusts would have been great investments over the past few years, but the change in management leaves me a little uneasy. On balance, I think I’d want to see the performance of these teams under the new management for a little longer before committing any cash. However, I’ll keep an eye on both, and should either develop a discount I may get tempted.

Conclusion

The two favourites for a bit more research are Legg Mason and Lindsell Train. Both have long standing management that have delivered a decent return, and significantly outperformed my tracker benchmark. Both managers appear to prefer a longer term investment horizon and preach patience over churning their portfolio. And both have fees that are unappealing in some regard. I’m off for a cup of tea and a ponder.

March Portfolio and Purchases

Slight pause on most things during March due to family illness, and wrecking my back. Now more or less back to normal...

So Brexit drags on into April with no more clarity as to what is going on. This, coupled with prices generally trending upwards left me mostly on the sidelines spectating during March. A few things are in buying territory, but most of what is on the shopping list still looks expensive.

Portfolio
March saw markets continuing the upward movement we've seen since the start of the year. The portfolio was up 2.6% compared to my chosen benchmark the Vanguard FTSE All Share Accumulation fund which was up 2.7% over the same period.

Best performer for March goes to Manx Telecom (MANX), +19% following a takeover bid from Basalt Infrastructure. This is both pleasing and irritating as it's nice to see such an increase, it has only been in the portfolio since January. The bid has been endorsed by the Manx Telecom board so likely to be agreed at the AGM. I would have been happy to keep the shares, but will hang on in case there are any further bids, at least for another couple of weeks. Worst performer was Fulcrum Utilities (FCRM) -22%, again a new purchase - this time since February, but badly mistimed. I should have looked at the longer term trend which was clearly downward, catching falling knives always a risky business. Still a couple of recent FCRM announcements including a trading update have been positive.

Crypto
Cryptocurrency markets look like they have stabilised and could be picking up, and some of the crypto portfolio is moving into the green, plenty still underwater but it is time to take some profits before it all goes pear shaped again. Some nice returns on Binance coin, plus a more modest effort with OmiseGo, are the whales going to dump Bitcoin again, or have we actually seen the bottom this time?

Finances
On the personal finance front, savings accounts have once again moved provider. As usual introductory rates on existing accounts dropped away, leaving virtually zero interest. So they migrated again. It's really irritating to be penalised for loyalty from a bank...

On the cash front, both Mrs Sleepy and myself have bonus payments, Mrs Sleepy has share options maturing from her employer which have been cashed in, and I also have a nice dividend payment from existing shares with my own employer. The shares awarded by both of our employers are not included in the portfolio, I'm happy to take the dividends from my shares for the moment and will sell the shares at some point in order to reinvest in the portfolio. I see these shares as part of a "ring-fencing" strategy for the portfolio, which along with the emergency fund should ensure I won't have to dip into it at an time when prices are unfavourable.

Bonus cash will be split between the portfolio, the mortgage, a few jobs around the house, and a treat of course.