Bah. Almost a month of 2024 gone, and the Bearbull income portfolio is still licking its wounds after another rough year. A quarter of a century’s focus on cash distributions may have pushed its average yield ahead of UK equities, but for the second year in a row (and – wince – the seventh in 10) the portfolio failed to beat the FTSE All-Share on a total return basis.
The locus of pain was the portfolio’s capital value, which dipped 5.6 per cent. The eponymous income bit, which is paid out in full at the end of June and December rather than reinvested, offered limited compensation. An average fund yield of 4.1 per cent might’ve been worse and might’ve been better. But absent capital growth, on which those dividends eventually come to rely, it’s hard to shake the disappointment.
That brings (or rather reduces) the portfolio’s all-time performance to an average annual return of 9 per cent, split evenly between income and capital appreciation. As if to emphasise that characteristically British duality of ‘equity income’, the FTSE All-Share also saw a perfect balance between income and capital growth in 2023.