Friday, July 18, 2014

Personalized Index Fund B: July 2014

PIF B, May, 2014, Dax vs PIF B

The last two months before we re-weighted the PIF B was bad and the gap which was 3% unites expanded to be 5% units instead between the fund and DAX. So this very clearly means that DAX was beating also PIF B during the first year. To see the previous publication please go to Personalized Index Fund B - March 2014.

The previous company composition of the PIF B, that where the ten cheapest companies on DAX based on P/E, P/B and dividend, can be found in the article PIF B - Dec 2013.

To re-balance this fund we were forced to kick out found companies:

RWE (analysis of RWE 2014)
K+S (analysis of K+S 2014)
Deutsche Post (analysis of Deutsche Post 2014)
Lufthansa (analysis of Lufthansa 2014)

This also meant that four new companies had to be brought in:

BASF (analysis of BASF 2014)
Deutsche Bank (analysis of DB 2014)
FMC (analysis of FMC 2014)
Heidelberg Cement (analysis of Heidelberg Cement 2014)

The result was a big surprise to me. I would never have suspected that RWE and K+S had to be kicked out from the list and if I would not have followed a strict mechanical rule based on the P/E, P/B and dividend payments then I would most likely have left them in.

The full list of companies are now: Allianz, BASF, BMW, Daimler, DB, E.On., FMC, Heid Cement, MüRe and Volkswagen.

Below you can see the development of the new composition from the creation in Mai until July.

PIF B, PIF B vs DAX, July, 2014

Conclusion: The first year PIF B was not doing so well. There was a bit of a catch up during the first quarter of 2014 but the second quarter removed all the gain that had been made. The new year is off to a nice start with slightly better result than DAX!

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