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  • Writer's pictureStephen Walters

Income never goes out of fashion

These last four weeks I’ve not had anything valuable to say, and been in apprehension lest anyone imagine on money I place a value higher than peace, health and justice.

Two features about markets: they're prone to over-react in both directions; and even when they look torpid, they can bounce.

Last week many did just that.

For those two reasons - and one I’ve often recited, about never buying anything I’d be unwilling to keep through a downturn - I’ve not touched the Dexterity portfolio. Of my limited resources I keep a large portion in equities because I don’t see anything better to do with the money:

  • Cash is flexible, but it’s losing value against inflation,

  • Bonds are losing popularity (=value) because nobody knows how high inflation will rise or will endure,

  • Property is inflexible, and requires ongoing attention I’m not interested in paying.

Very soon the Dexterity portfolio will be three years old, and I’ve a few things to say about it over the next couple of weeks.

This week, my first chart shows the relative performance of some themes through the last six months:

  • Gold - Do I recommend it enough, I wonder? After several years of indifferent performance, Gold is now fulfilling its purpose.

  • Gender Equality - has been handsomely defensive; along with Inclusion & Diversity.

  • World ESG - a broad coverage has helped it stay afloat.

  • Water - my all-time favourite, and in everyone’s portfolio for enduring competence.

  • Food - oh dear! I hadn’t realised this would be so volatile.

  • China ESG - to my surprise, the Chinese communist party last week announced it will from now on be market-friendly again.

My second chart is about a fund I’d choose if I wanted income, and ESG to align with my values. Among eleven World Dividend ETF, the ESG variant is presently unique; spun off from a non-ESG version. It’s new (July 2021) - not yet £10 million - but the yield is 4.4% so I’m sure it will attract a lot of attention. My chart compares its performance since launch with two enormous World Dividend ETF - by iShares and State Street - the latter being the fund from which spun-off. You can see the tiddler is keeping up very well with the giants.

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