The Johnny Doe IBKR portfolio

[JohnnyDoe]

Not financial advice.
Since a few people asked me in private, this is how I invest with IBKR for income plus some extra pickings that I don’t want to run through the bank.
The current overall annual dividends rate of the portfolio is 8.7%.

 

[Mercury]

Nice portfolio, maybe a bit over-diversified/overlapping?

What is your investment strategy? Value averaging, DCA ... or else?

 

[JohnnyDoe]

A portion of the portfolio is for income, different strategies and different dividends dates. The other portion is index ETFs geographically diversified. Plus some stock picking based on value. I regularly reinvest the dividends money that I don’t need so interests compound.

For income, I also hold some perpetual bonds through the bank, which I find make more sense than a life insurance. I get 9-12% interests from them.

 

[uplana]

Thank you sharing the information with all of us. I'ts a guideline for us who don't do such investment before.

 

[Martin Everson]

The current overall annual dividends rate of the portfolio is 8.7%.

Sorry whats the total return out of interest? No point having 8.7% in dividends if your portfolio is i.e down 16% YOY. That's a -7.30% return for example.

One needs to consider total return i.e Capital Gains + Dividends to get full picture. Otherwise your chasing Nickels and losing dollars.

 

[JohnnyDoe]

Sorry whats the total return out of interest? No point having 8.7% in dividends if your portfolio is i.e down 16% YOY. That's a -7.30% return for example.

One needs to consider total return i.e Capital Gains + Dividends to get full picture. Otherwise your chasing Nickels and losing dollars.

that's of course marked to the market as I've not sold anything and I don't plan to sell any time soon

 

[wellington]

Not bad, Johnny...

Mind tech, blockchain, ai, chips, green, etc are always the first in a liquidity rush (China Credit Impulse Index is usually a good leading indicator there).

Won't provide (this is corporate treasury) specifics but your 8% could be ~80%, below is something like ~400% since the lows in each, and roughly 17% since the the China Credit Impulse moved positive and around the time the US FHLB started bailing out banks behind the scenes.

Naturally non-realised carry forward positioning, we started charting it beginning of the year, made for easier observations on the larger macro market in those sectors..

Lows (entries) were around June 2022 onwards -> for specific sectors to Nov 2022,.

Markets are like real estate - it’s not the price you sell for it’s the price you buy in at.

 

[Cavaliere]

This seems like a good way to get poor returns in good times, and negative returns in bad times. How did this mix perform during times of recession?

 

[wellington]

This seems like a good way to get poor returns in good times, and negative returns in bad times. How did this mix perform during times of recession?

If referring to my comment, we're up roughly ~400% since June 2022 lows.

It's managed (in-house AI quant ~ and staff), I can't recall a bad year since established the treasury fund, one thing i will note it's sole purpose was established to outperform currency debasement.

 

[Cavaliere]

If referring to my comment, we're up roughly ~400% since June 2022 lows.

It's managed (in-house AI quant ~ and staff), I can't recall a bad year since established the treasury fund, one thing i will note it's sole purpose was established to outperform currency debasement.

Wow, proper returns. Well done!

 

[Martin Everson]

View attachment 5766
that's of course marked to the market as I've not sold anything and I don't plan to sell any time soon

That's good performance on a total return basis then

Not looked into your portfolio but I know off head there is some duplication in your portfolio. i.e all of SPY's 502 or so holdings are already in VT . I think I talked about this in another thread some time ago.

Are you able to show the volatility value of your portfolio out of interest?

 

[JohnnyDoe]

i.e all of SPY's 502 or so holdings are already in VT .

I use SPY only to balance SPYI

Are you able to show the volatility value of your portfolio out of interest?

Downside deviation: 1.89%
Max drawdown: 7.46%
Sortino: 0.71
Sharpe: 0.45
Standard deviation: 3.00%

Not the typical stats of a master of the universe hedge fund manager but I’m quite confident I will not be wiped out if something bad happens.

 

[Martin Everson]

Btw out of interest I put all your positions (accept VT and VZ as both missing) through portfoliovisulizer to get some insight and to backtest it. I applied equal weighting to each position for simplicity purposes.

Your underlying holdings of your portfolio has over 30% of it exposed to Financial Services . A 45% US stock weighting. 62% large cap exposure which is not bad. On fixed income side you have 66% exposure to non-investment grade bonds aka junk bonds shall we say.

I wanted to run a backtest on your portfolio but many of the ETF's are very new so the backtesting of your portfolio is not possible

But all in all taking into account the missing two positions I could not include it all looks good with an inflation adjusted return of 3.72%

There is more detailed insight when you use the tool that I did not mention but all good fun.

https://www.portfoliovisualizer.com/backtest-portfolio

 

[JohnnyDoe]

Btw out of interest I put all your positions (accept VT and VZ as both missing) through portfoliovisulizer to get some insight and to backtest it. I applied equal weighting to each position for simplicity purposes.

Weighting is an important part of a portfolio

Your underlying holdings of your portfolio has over 30% of it exposed to Financial Services . A 45% US stock weighting. 62% large cap exposure which is not bad.

Of course it’s not like that if you use the proper weights. You can see I hold China and India, as well as small caps.

On fixed income side you have 66% exposure to non-investment grade bonds aka junk bonds shall we say.

Where do you see the junk bonds?

But all in all taking into account the missing two positions I could not include it all looks good with an inflation adjusted return of 3.72%

I’m fine with that.

I specify that this is just my IBKR portfolio, which is a dynamic environment as I continue to adjust the weightings using dividends and periodic capital additions.
The bank portfolio is made just of boring index ETFs and perpetual bonds and is unlikely to change.
I continue to buy crypto every Monday and I am no longer tracking the crypto portfolio performance (I used to use CoinTracking · The leading Crypto Portfolio Tracker & Tax Calculator).

 

[Martin Everson]

Where do you see the junk bonds?

i.e SPHY which is "SPDR High Yield ETF" aka complete junk bonds of non-investment quality and purely speculative value.

P.S They even refer to it as buying junk in their literature....lol.


https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-portfolio-high-yield-bond-etf-sphy
The ratings of the bonds in SPHY breaks down as below. Next to no investment grade bonds in there . Personally I would switch to short duration U.S treasury ETF fund which may offer a decent return maybe 5% dividend vs 8.48% dividend but a better overall Total Return. I have not looked into it yet however.

Name	Weight
AAA	0.85%
BAA3	0.53%
BA1	9.41%
BA2	14.41%
BA3	21.61%
B1	15.40%
B2	14.62%
B3	11.26%
CAA1	4.94%
CAA2	5.29%
CAA3	1.08%
CCC or Lower	0.16%
Not Rated	0.46%

 

[JohnnyDoe]

i.e SPHY which is "SPDR High Yield ETF" aka complete junk bonds of non-investment quality and purely speculative value.

P.S They even refer to it as buying junk in their literature....lol.


https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-portfolio-high-yield-bond-etf-sphy
The ratings of the bonds in SPHY breaks down as below. Next to no investment grade bonds in there . Personally I would switch to short duration U.S treasury ETF fund which may offer a decent return maybe 5% dividend vs 8.48% dividend but a better overall Total Return. I have not looked into it yet however.

Name	Weight
AAA	0.85%
BAA3	0.53%
BA1	9.41%
BA2	14.41%
BA3	21.61%
B1	15.40%
B2	14.62%
B3	11.26%
CAA1	4.94%
CAA2	5.29%
CAA3	1.08%
CCC or Lower	0.16%
Not Rated	0.46%

View attachment 5776

Ok but those are not 66% of my portfolio. SPHY is performing well for what it is.

 

[Cavaliere]

Basically if a Great Recession type of event would happen again you would be in major trouble. And 8% returns is really quite terrible for a year where the SPY returned +20%.

To add to this, this strat returns less dividend than Altria. All the stuff you have in junk bonds is better of in a bet that people will keep smoking, or people in the East will buy more expensive cigarettes if you would ask me.

 

[JohnnyDoe]

Basically if a Great Recession type of event would happen again you would be in major trouble.

I would just sit and wait.

And 8% returns is really quite terrible for a year where the SPY returned +20%.

Yes I suck at beating the SPY, which btw is not what I want to do.

To add to this, this strat returns less dividend than Altria. All the stuff you have in junk bonds is better of in a bet that people will keep smoking, or people in the East will buy more expensive cigarettes if you would ask me.

I don’t hold any junk bonds, I hold SPHY and I believe Spdr knows better than me (plus I don’t have $3b to properly diversify like they do).

 

[Mercury]

Yes I suck at beating the SPY

Everybody does.

If you want income maybe just holding SPY and selling low-risk further OTM weekly or monthly covered calls could get you about 1% return (including SPY dividend) per month on capital. Buying back right away when assigned.

I would split 80/20 SPY/QQQ applying same strategy for a bit of more growth/income.

Agreed that this is not 100% passive.

 

[EliasIT]

What you are talking about here is far beyond my knowledge of investments, probably why I have never done much in stocks, securities, and ETFs - but I am starting to see an opportunity for myself here.