TAG Immobilien

I fancy investing in something a bit different, and German REITs look pretty cheap.  I've therefore taken a punt on TAG Immobilien AG: Home | TAG Immobilien AG (tag-ag.com) at just under EUR12.5.  1 year graph looks fun!

While I was at it, I picked up a few more Aviva Preference shares at £1.31.

Now to see if my portfolio tracking tools can cope with Euro-denominated shares...

Ferrexpo: FXPO.L

Buy shares in a Ukrainian company while Putin is invading.  Why not?

Not a large position, paid just under 149p (on 14th March).  The P/E ratio is somewhere below 2.  The downsides are pretty obvious:

• Right now production is probably zero.  I assume the workforce has more important things to do.
• Even if they're still producing they can't ship their product anywhere.
• If Russian forces make it to Ferrexpo's production facilities they might level them.
• If there's a long-term occupation then Russia might seize ownership of Ferrexpo or their assets.
• Even if Ukraine kick out Russian forces they might nationalize industry or levy punitive taxes as part of their economic recovery plan.

But I figure there's plenty of upside at the current price:

• Putin probably (hopefully) regrets getting into this and right now just wants to get sufficient leverage to cut a favourable peace deal.
• Ferrexpo is based in the middle of the country.  The war will be won or lost before the Russians get that far.
• They're cheap, and apart from the war they look pretty good quality - no debt, investing in improving the quality of their product, stupendous margins.

Is it immoral to invest in a company whose share price has cratered because of a war?  I don't think so:

• I'm not taking advantage of anyone, just buying at the market price.  Indeed if there are Ukrainians who want to sell because they need ready cash, and everyone stopped buying, then that would clearly be a bad outcome.
• I don't have a problem with what the company itself is doing.
• I have no conflict of interest - owning Ferrexpo shares isn't going to make me start supporting Putin.

I did also consider investing in Polymetal, but I think that would have been morally dubious - but luckily my broker won't trade them, so the decision is out of my hands.

More AV-A

Bought some more Aviva preference shares at 155p, just to take my holding up to a reasonable size.  It's now about 7% of my portfolio.

2021 review

My portfolio earned 23% in 2021 vs about 17% for the FTSE 100 and 30% for the S&P 500 in sterling terms (all including dividends). I bought some more SEDY in October but otherwise left it alone.

BRK-B and Barclays returned about 30% while Aviva prefs and Plus 500 did nothing.

At the end of the year BRK-B were about 57% of the portfolio, SEDY and NWBD 12, Barclays 9, Plus 500 7, Aviva prefs 4.

I don't see many tempting avenues for investment right now, and if nothing changes over the next 12 months I'll probably just reluctantly stick more money into SEDY and possibly also some more Aviva prefs or similar.

More SEDY.L

Bought some more SEDY.L.  Now about 12% of my portfolio.  Wanted to get rid of some cash, didn't see anything better to do with it.  That is all.

NWBD tender offer

Natwest are offering 175p (plus accrued dividends) for NWBD.L: https://investegate.co.uk/nat.westminster-bk--natn-/rns/tender-offer/202106071556180760B/

This is a small premium to the pre-announcement market price, and higher than these have ever traded.  However, I'm minded not to accept, since:

• I don't need the cash - I have no good place to put it.
• I'm sitting on a large capital gain so would have a hefty tax bill.
• The running yield at 175p is about 5.1%.  This is not far off that of e.g. AV-A, which I also hold.  Trading one for the other just crystallises a tax bill which I could otherwise defer indefinitely (with its real cost diminishing each year due to inflation).
• I don't see any increased risk of Natwest attempting to redeem these by underhand means.  All shares repurchased will be cancelled, so couldn't be used to vote them out of existence.

I anticipate:

• This will be the only tender offer for some time.  Maybe there'll be another in 2026, around the time these stop qualifying as capital.  I'm not holding out for a better offer.
• Trading these will become even harder.  But that's fine, I have no plans to sell.  I'm happy to hold and reap the dividends indefinitely.
• There's obviously an ongoing risk that Natwest attempt to disappear these shares at par somehow.  This tender offer just makes it obvious they would rather these shares no longer existed.  I don't see the risk as that huge - even pre-tender-off these are only £140m-worth - surely not worth the legal/reputational impact of going down the Aviva route.

2020 review

My portfolio returned 8.3% over the course of 2020 in sterling terms, or about 10% in NOK.  At the start of the year I held Berkshire Hathway, Plus 500 and Natwest Prefs.  I didn't sell anything, but bought Aviva Prefs and Barclays in the summer and then late in the year iShares Emerging Markets Dividend ETF (SEDY).

Plus 500 are the standout performer with a 67% return, Barclays are up 32% on the price I paid.  BRK-B and SEDY are the laggards, each down about 1%.

In comparison the FTSE 100 lost about 11% and the S&P 500 gained about 14%, both factoring in dividends and converting the S&P 500 return from dollars to sterling.

Obviously that doesn't tell the whole story, at one point things weren't looking nearly so rosy, but I took that as my cue to buy some bank shares since they looked particularly cheap.  Of course I could have done enormously better by buying earlier in the year, or sticking all my cash into Tesla, but you can't win 'em all.  The latter in particular would have been stupendously out of character.