US Dividend Income ETFs – many long names !

As you know, I already have a holding of Schwab US Dividend Equity ETF in my ISA account, and recently did a bit of research on some similar ETFs that have added focus on dividend appreciation over time.

I looked at NOBL – Pro Shares S&P 500 Dividend Aristocrats ETF – and VIG – Vanguard Dividend Appreciation ETF. Both of these funds suited my intention of diversifying into a fund which might produce less income but more growth.

In the end I decided to buy the Vanguard fund for now, as the index which it tracks – NASDAQ US Dividend Achievers Select Index – has more interesting characteristics and also provides a slightly longer barbell.

In my case all US ETFs need to go into tax free funds such as SIPPs and ISAs. This is because the U.K. tax treatment in an ordinary investment account will most probably be detrimental, and the double tax agreement applies to SIPPs and ISAs too.

Part Way through May

May has been a strange month so far, and U.S.shares have held up better than U.K. shares. Among my tech sector choices Microsoft has come back to 125.74 – filling the gap created by upside earnings surprise last month. Nvidia has retreated to 160.36, which looks weird in relation to the strength in the Bitcoin price. Alibaba came back below 170 on fears about new trade tariffs, but promptly rallied to 177.50 after better than expected earnings. If this was the buying opportunity which my Smart Person was looking for she’d have needed to be very quick !

Roku has been a star, rising from 63.59 to 84.80. This was on earnings and subscriber numbers. One thing I noticed this month is that articles written by Motley Fool have been appearing on Yahoo Finance. Apparently they now recommend the stock, although I would have hoped that the recommendation came in the 60s if I was one of their customers. But Motley Fool is a tiered service so the people paying thousands of dollars at the top end would have been told to buy first ! Not good.

Zayo attracted a buyout at about 35, but as this is unlikely to go through till next year I have taken the advice of Travis Johnson at Stock Gumshoe (also a holder) and exited at 32.95.

Not very enamoured of the U.K. market where BAT weakened further to 2904, Prudential lost traction at 1623, and Vodafone produced a mega loss and cut the dividend. However I did buy a new holding in Superdry just the other day at 452.76, primarily because I believe that the chain can be turned around sufficiently to show me a reasonable profit. My old friend John Sier – who managed the BAT pension fund – said never to trust apparel companies, so will await progress on the revamp.

Also just sold LondonMetric Property in my ISA account, as a bit ahead of events I think although continuing to like the management. Staying within my ISA added to Schwab US Dividend Equity ETF at about 52.76 – now a bit easier on trade spat with China – and may take this holding a bit further up in size as it started fairly small and I think it should be large !

And congratulations to Harry Dalmeny if he is reading – for conducting the auction sale of the Monet for $97 million – that’s $110.7million inclusive of buyers premium.

Bringing stuff to Barbados

Let’s start with cars. These are very expensive and attract a lot of duty unless you have a returnee concession. Petrol/Gas is also very expensive on the island, but road tax has been suspended for most cars. What you definitely should not bring is a low on the road car like an Aston – roads are nowhere near European or North American standards and you will scrape the bottom of a sports car. Bearing in mind steep hills engine sizes of between 1 and 2 litres – or electric equivalents – will work best.

If you want provenance on a used car you are best to bring your own. Geest are quite cheap from Portsmouth in England, and there is no need to put the car in a container on their ship. Containers are often used to bring crashed cars and parts – to give local employment – best to avoid. Suspicious of cars pre owned in Japan as you are taking pot luck – might be good or a crashed vehicle stitched together by the Yasuda.

Local people prefer lower powered SUVs like Qashqais, Suzukis, Toyotas. They sometimes also make a show of wealth by buying very expensive cars like Range Rovers or Jags as haven’t a clue what to do with money after building a huge house.

There are also plenty of cheaper cars on the island, but nothing here is cheap !Next I am going to talk about electrical appliances, which are generally expensive in Barbados. The electricity is 50hz 110v but it is easy to install British electrics at 50hz 220v, that’s just 10v lower than the U.K., if you are remodelling or building. American appliances are 60hz 110v, so if it is something big like a fridge/freezer you will need a transformer, but not for low power things like ceiling fans, televisions.

If you have British electric sockets alongside local sockets in the kitchen this enables use of a lot of appliances. For example, you could bring a few things that you cannot buy here like a Magimix.

A long British extension cable on a reel is also helpful if bringing your power tools.

Best to buy ceiling fans and TVs locally, unless bringing from North America. More expensive in Barbados, but warranties are useful.

Standard lamps and table lamps from the U.K. are fine with local power. Just change plugs and light bulbs, as wiring is designed for stronger current. Do not bring ceiling LEDs from the U.K., as local slightly larger ones are sold out here with bright white light – or yellow if you prefer the 1920s Bakerloo Line retro look. Think about 7w and 12w will cover most areas.

And definitely bring a powerful vacuum cleaner, as breezes bring dust, shoes bring sand, and pets shed fur.

Locally bought furniture is expensive, and bear in mind that very cheap outside plastic stuff will not last very long in this climate. Needs to be reasonable quality – that’s all.

Property in Barbados Part 2

I have covered the reasons for buying on the West Coast in my previous article. Looking at all the options the Porters/Mount Standfast postal area is one of the best locations.

Starting at the North end of the Coast Road and working down you first come to Heywoods – an OK area near Speightstown. Problem here is lack of access to the sea – Port St Charles (a walled yacht marina) is across the road and Sandals are planning to build a huge new resort just to the South. Although there is supposed to be public access to the beach you can be sure that Sandals will find some way of restricting access, so forget this area.

Moving down from Speightstown, you come to Mullen’s. The beach here has not only been eroded, but also the restaurant and beach bar has been acquired by Royal Westmorland as part of their beach club complex. This has devalued Mullens as a location.

A bit further South you come to Lone Star – a restaurant and small hotel on Alleynes Beach. There is beach access at two points nearby, two extra beach bars, and plenty of space to put up your own chairs if you live nearby. Just up from Footprints – a remodelled beachside House once owned by Bob Monkhouse – there are properties and plots just a short walk from the beach and this is my preferred location on the West Coast.

A bit further South you have Holetown with its modernised Massy supermarket – selling some Waitrose stuff too. Nearby is Sunset Crest and Sandy Lane, both popular places to own property. Sunset Crest is broadly OK, but the development was built a long time ago on a coastal swamp, and heavy rainfall results in flooding of parts of the development. Not much of a beach either. Sandy Lane starts behind Sunset Crest and spreads to the South and East. Some of our friends have rented there, and say the housing area is deserted – so not ideal unless you have a large dog (like our friends).

Not sure about Sandy Lane fees, but golf club membership is an enormous expense.

Noticed Royal Westmorland have also been building up In the Porters Road area. Walking to the beach from here might look OK on the map, but expect to sweat pints of water on the way back. A neighbour looked into their fees and thought they were exorbitant, and apparently you need to join their beach club at Mullen’s and use their cleaners, etc. Recent sales have mostly been off plan, which adds large commissions into the pricing.

Just South of the Sandy Lane hotel complex is One Sandy Lane, best beachside address on the island with Rihanna as a neighbour. Billionaires only.

Moving South there are many nice expensive houses with beach access. Two strikes against these are road noise and storms – tropical storms can remove beaches and with sea levels generally expected to rise over time it is best to leave these houses as expensive holiday rentals.

Batts Rock to the South offers some elevation and a pleasant beach with a beach restaurant – La Cabane. Not far from the Carlton supermarket which is large and sells some Tesco products.

As an aside, avoid cheap pasta as it sticks together. The Waitrose and Tesco products are a bit more expensive, but made in Italy as opposed to Costa Rica. Italian is a very clear winner, and packaging is also less likely to let in weevils while unopened.

The April 2019 Update

My big tech names have not changed price much in April – except for Microsoft up from 117.97 to 130.60. Alibaba 185.57 vs 183.60, Nvidia 181 vs 179.56, Roku 63.59 vs 64.48 were flat. The reason behind Microsoft’s rise was bumper earnings, partly fuelled by Cloud growth, and the realisation by Wall Street that the Pentagon contract has narrowed to a shortlist of two, so either Amazon or Microsoft will be the winner.

Premier Oil improved from 93.55 to 99.78 after low 100s. I remain optimistic but took a partial profit during April at about 97. BAT eased from 3194 to 2990 – still a buy according to Smart Chartist. Prudential improved to 1735 – the spin off of M&G is scheduled for later this year. Bought some a while ago at 1800, averaged at 1600, so not much here yet. Despite severe reservations about useless management I retained Vodafone in my ISA at 139 having taken a tax loss in the real world.

Smaller holdings in Bango – 113 vs 110, and S4 – Sir Martin Sorrell’s new digital media agency- improved a bit, and Smithson Investment Trust – my Woodford replacement – moved up from 1146 to 1216.

Also noted that quality dividend stocks on Wall Street improved as my mega cheap expense ratio SCHD was up a bit at 53.96. Not as big a holding as Smithson, but I do also have quite a large holding in Findlay Park American – probably a closed shop to most investors.

As far as 5G goes, I was out of the sector and bought a few Nokia ADRs at 5.38 the other day – closed the month a few cents cheaper.

Also hold a number of funds that need thorough reviews and changes, so will have plenty to think about in May.

Overall investment account cash seems to hover in the 20 – 30 % range – there is no particular reason for me to be fully invested – much easier to operate using cash, creating cash.