Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties. Another deficit month, thus to bridge the gap, needs to borrow on the bond market.
In September 2018 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement.
There were “only” 2 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office (http://www.dmo.gov.uk/) to raise cash for HM Treasury:-
25-Sep-2018 0 1/8% Index-linked Treasury Gilt 2048 3 months £872.7200 Million
20-Sep-2018 1 5/8% Treasury Gilt 2028 £2,750.0000 Million
11-Sep-2018 1¾% Treasury Gilt 2049 £2,500.0000 Million
06-Sep-2018 1% Treasury Gilt 2024 £3,000.0000 Million
When you add the cash raised:-
(£872.7200 Million + £2,750.0000 Million + £2,500.0000 Million + £3,000.0000 Million) = £9122.72 Million
£9122.72 Million = £9.12272 Billion
On another way of looking at it, is in the 30 days in Sept, HM Government borrowed:-
£304 million each day for the 30 days.
We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature, 2020, 2028 and 2049. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”
On Thursday the 11th October, GlaxoSmithKline paid out its October dividend.
It was 19p a share.
The total number of voting rights in GSK is 4,960,316,601
4,960,316,601 x £0.19 = £942,460,154.19
That is £942m
5.5% is the yield.
The Invesco Perpetual Enhanced Income principal objective is to provide shareholders with a high level of income whilst seeking to maximise total return through investing in a diversified portfolio of high yielding corporate and government bonds
Top 10 issuers % portfolio
Altice 6.625% 15 Feb 2023, 7.5% 15 May 2026, SFR, 7.375% 01 May 2026 (SNR) 2.7% of the fund
UniCredit International Bank 8% FRN Perpetual, 8.125% FRN Perpetual 2.3% of the fund
Standard Chartered 5.7% 26 Mar 2044, 5.125% 06 Jun 2034 1.9% of the fund
Enterprise Inns 6.5% 06 Dec 2018 (SNR), 6.375% 15 Feb 2022 (SNR) 1.9% of the fund
NWEN Finance 5.875% 21 Jun 2021 (SNR) 1.8% of the fund
NGG Finance 5.625% FRN 18 Jun 2073 1.7% of the fund
Enel 7.75% 10 Sep 2075, 6.625% 15 Sep 2076 1.7% of the fund
Premier Foods Finance FRN 15 Jul 2022 (SNR), 6.25% 15 Oct 2023 1.7% of the fund
Intesa Sanpaolo 8.375% FRN Perpetual, 7.75% Perpetual, 7% Perpetual 1.6% of the fund
TVL Finance FRN 15 May 2023 (SNR), 8.5% 15 May 2023 (SNR) 1.6 % of the fund
Total 18.9 % of the fund are from the top ten holders.
Total Assets £148.3m
The Personal Assets is what its name implies. It is an investment trust run for private
investors, who may often have committed to it a substantial proportion of their
British American Tobacco UK Tobacco 3.3%
Nestlé Switzerland Food Producer 3.1%
Microsoft USA Software 3.0%
Coca-Cola USA Beverages 3.0%
Philip Morris USA Tobacco 2.8%
Unilever UK Food Producer 2.7%
Berkshire Hathaway USA Insurance 2.1%
Altria USA Tobacco 2.1%
Sage Group UK Technology 2.0%
American Express USA Financial Services 1.8%
Imperial Oil Canada Oil & Gas 1.7%
Colgate Palmolive USA Personal Products 1.6%
Henkel Germany Consumer Goods 1.5%
Procter & Gamble USA Household Products 1.4%
A.G. Barr UK Beverages 1.2%
Diageo UK Beverages 1.2%
GlaxoSmithKline UK Pharmaceuticals 1.1%
Hershey USA Food Producer 0.9%
Société BIC France Consumer Goods 0.9%
Franco-Nevada Canada Mining 0.7%
PZ Cussons UK Personal Products 0.3%
Dr Pepper Snapple USA Beverages
Becton Dickinson USA Pharmaceuticals
Agnico Eagle Mines Canada Mining
Total Equities 38.4% £329million
US TIPS USA 20.0% £171m
US Treasuries USA 2.7% 23m
UK Index-Linked Gilts UK 3.6% 31,m
UK T-Bills UK 22.5% £193m
Gold Bullion 8.9% £76m
Total Investments 96.1% £825m
UK cash 4.3% £36m
Overseas cash 0.5% £4m
The shares trade at £393 a share.
On Friday last week, that was Friday 12th October 2018, The Royal Bank of Scotland after 10 years has paid out a dividend to its shareholders.
2p a share.
RBS has 12,048,231,514 shares.
12,048,231,514 x £0.02 = £240,964,630.28
That is £240m
If all the economists were laid end to end, they’d never reach a conclusion.
The Troy Trojan Fund is a UK based Unit Trust, run by Troy Asset Management
The investment objective of Trojan Fund is to achieve growth in capital and income in real terms over the longer term. The investment policy is to invest substantially in UK and overseas equities and fixed interest securities
Top 10 Holdings
Gold Bullion Securities 6.2 Fund (%)
Microsoft 4.1 Fund (%)
British American Tobacco 3.6 Fund (%)
Coca-Cola 3.4 Fund (%)
Unilever 3.0 Fund (%)
Altria 2.2 Fund (%)
Berkshire Hathaway 2.2 Fund (%)
Nestlé 2.2 Fund (%)
Philip Morris 2.2 Fund (%)
Procter & Gamble 1.9 Fund (%)
Total Top 10 31.0 Fund (%)
20 other holdings 53.0 Fund (%)
Cash & equivalent 16.0 Fund (%)
Interesting to see the fund is holding 16% in cash
Direct Line is a major UK insurer.
It collects in insurance premiums, and pays out on claims. The insurance premiums are invested.
What are these investments ?
Investment-grade credit 3,893.1 million
High-yield 388.6 million
Investment-grade private placements 103.6 million
Sovereign 224.8 million
Total debt securities 4,610.1 million
Infrastructure debt 316.4 million
Commercial real estate loans 169.0 million
Cash and cash equivalents3 1,304.5 million
Investment property 309.3 million
Total Group £6,709.3 million
Note, no equity investments.
A yield of 6.1%