This week we present the first full list of holdings of our Wealth Preserver portfolio and, again for the first time, report on the income they have produced – a key weapon in our fight against the corrosive effects of inflation.
The portfolio has produced a total return – capital gain plus income – of 1.4pc, or £7,161, assuming £500,000 was invested. More of the gains have come from income: £4,554 against £2,607
We added the first assets to the portfolio in April and the final ones in October. Very roughly we can say the “average” month of investment was therefore July, or five months ago. If we annualise a 1.4pc total return over five months we get 3.4pc.
This is rather short of the current inflation rate of 4.2pc, not to mention the portfolio’s target return of CPI plus two percentage points. However, it is very early days so we will not feel too disheartened.
We should point out that our aim is to grow the total value of the portfolio by CPI+2, once dividends have been reinvested. In other words, we are not saying that investors can withdraw the dividends, spend them and still have their capital outpace inflation by two percentage points.
That would be a much more demanding goal, not least because, in addition to our total return target, we think a wealth preservation portfolio should be as stable as possible and react as little as possible to sudden shocks that have nothing to do with inflation, such as stock market crashes, pandemics or wars.