Investor Views: 'The High Yielding Shares That Helped Me Retire’

Retired investor Haris Saeed has diversified his share portfolio with the help of investment trust holdings  

Emma Simon 17 November, 2021 | 9:52AM
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Woman facing piggy bank

Haris Saeed has recently retired, but has continued to remain invested in a range of different assets.

Saeed is 65 and has been an investor for around 15 years. He lives in Middlesex with his wife, and had worked in education before retiring. 

“My goal initially was to invest and make sufficient money to allow me to stop work and ensure myself and my wife can have a comfortable retirement," he says. 

For a number of years, Haris has adopted an “income and growth” strategy with his investments, holding shares that pay decent dividends, as well as those with more promising growth prospects. He mainly invests directly in shares, but his portfolio does also include some investment trust holdings, which he added to his portfolio to add diversification. He says this also enables him to access overseas markets. He holds them through an AJ Bell ISA.

Over the years Haris has tried to increase his diversification. As well as holding equities, he has also invested in gold and bitcoin.  

“I had some difficulties, losing a bit of money when my investments did not go to plan," he says.

"As a result I’ve learned to diversify more effectively and also to cut losses and move on. I have also learned that you cannot time the market when it comes to buying or selling stocks.”

Anderson out

When it comes to selecting shares and funds, Haris tends to select based on sector, picking shares in areas where he thinks there are good growth prospects, but he does also take ethical and environmental issues into consideration.

One of his top holdings has been an investment in Scottish Mortgage Trust (SMT), the global investment trust. This has a coveted Morningstar analyst rating of gold, as well as a five-star rating, the latter reflecting its strong performance via peers and its benchmark in recent years.

Over the past 10 years, it has delivered annualised returns of 29.24% for investors (based on share price, rather than NAV). Over three years it has delivered annualised returns of 46.09%, almost double the 23.36% returns from its benchmark.

Morningstar analysis says Scottish Mortgage Trust has continued to deliver on its “unique hyper-growth mandate”. It says costs have fallen over the past 12 months, and although the lead manager James Anderson is due to retire in April 2022, the team at Morningstar remains confident about the trust’s ongoing performance, pointing out it has a well-executed process and established succession plan.

Rising dough

When it comes to his direct shareholdings, Haris has been a long-term investor in pharmaceutical company GlaxoSmithKline (GSK). This FTSE-listed stock has a four star rating from Morningstar and is currently trading below its "fair-value" estimate of 1730p.

Haris says this is one of the stocks that pays a decent dividend--according to Morningstar data it is currently yielding 5.3%. As one of the largest global pharmaceutical companies, GSK uses its considerable resources to help create the next generation of healthcare treatments. Morningstar says that its innovative new product line-up and expansive list of patent-protected drugs means it is viewed as having a wide economic moat.

Other shareholdings include B&M European Value Retail (BME), Finsbury Food Group (FIF) and Sylvania Platinum (SLP).

The latter is a South African-based mining company involved in the production of platinum. Morningstar data shows total annualised returns of over 68% over the past five years.

However, returns have been more mixed with Finsbury Foods. Over the past year the bakery manufacturer's share price has risen by 59.02%. But the longer term picture is less rosy, with annualised losses over three and five years of 3.38% and 2.13% respectively. The lion’s share of its revenue comes from the UK, which may be a lesson in diversification of its own.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
B&M European Value Retail SA360.51 GBX-1.39
Finsbury Food Group PLC69.10 GBX0.88
GlaxoSmithKline PLC1,785.20 GBX-0.97Rating
Sylvania Platinum Ltd77.40 GBX-5.72

About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk