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Author: Degsy67 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5279  
Subject: IUKD Rebalancing Mar'08 - Results Date: 27/03/2008 23:38
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OK, time for guessing is over. Let's see the result as it emerges.

IUKD commenced rebalancing when the market opened on Tue 25/03. Based upon what happened last year we know it can take several days for the IUKD rebalancing to complete. I thought I'd monitor it in a little more detail this year to get a better idea of how long it actually takes in practice and how the rebalancing is conducted.

So at the end of my second guess it looked likely that the following were for the chop:

INTERNATIONAL PERSONAL FINANCE
RANK
SCOTTISH & NEWCASTLE
PENNON
NORTHUMBRIAN WATER (or COMPASS)

... with the potential for adding the following seven new high yielders if my interpretation of the rules is correct (which it may not be):

YELL GROUP
DEBENHAMS
BARRATT DEVELOPMENTS
TAYLOR WIMPEY
HBOS
INVESTEC
PERSIMMON

So here are the results so far:
                                20/03/08  26/03/08  27/03/09
Name % PCF % PCF % PCF Change Note

ELECTROCOMPONENTS 2.89 3.12 3.39 +0.50
BRIT INSURANCE HOLDINGS 2.56 3.25 3.24 +0.68
ALLIANCE & LEICESTER 1.38 3.19 3.20 +1.82 *** INCREASING ***
RENTOKIL INITIAL 1.55 2.43 3.10 +1.55 *** INCREASING ***
BRADFORD & BINGLEY 1.29 2.15 3.07 +1.78 *** INCREASING ***
ROYAL BANK OF SCOTLAND 1.42 3.13 3.07 +1.65 *** INCREASING ***
DSG INTERNATIONAL 1.01 3.02 3.05 +2.04 *** INCREASING ***
BARRATT DEVELOPMENTS 1.84 3.01 +3.01 *** NEW ***
TAYLOR WIMPEY 2.19 3.01 +3.01 *** NEW ***
TOMKINS 2.40 3.02 2.94 +0.54
DEBENHAMS 0.79 2.81 +2.81 *** NEW ***
YELL 2.33 2.79 +2.79 *** NEW ***
LLOYDS TSB 2.98 2.75 2.78 -0.20
BARCLAYS 1.71 2.61 2.56 +0.85
CATTLES 1.53 2.51 2.41 +0.88
PROVIDENT FINANCIAL 1.69 2.35 2.38 +0.69
HBOS 2.31 2.32 +2.32 *** NEW ***
TRINITY MIRROR 1.46 2.41 2.32 +0.86
PREMIER FARNELL 2.90 2.22 2.28 -0.62
BT 2.14 2.26 2.23 +0.09
CARPETRIGHT 1.60 1.99 2.17 +0.57
JARDINE LLOYD THOMPSON 2.87 2.36 2.17 -0.70
KESA ELECTRICALS 1.42 2.17 2.16 +0.74
CATLIN 2.52 1.99 1.99 -0.53
UNITED UTILITIES 3.96 1.95 1.94 -2.02 *** REDUCING ***
FKI 1.89 1.89 1.89 0.00
HALFORDS 1.73 1.85 1.85 +0.12
HSBC 2.69 1.83 1.82 -0.87
HMV 3.04 1.66 1.68 -1.36
GKN 1.70 1.60 1.62 -0.08
NORTHERN FOODS 1.37 1.55 1.59 +0.22
DS SMITH 1.93 1.45 1.54 -0.39
BP 2.67 1.50 1.52 -1.15
LEGAL & GENERAL 1.81 1.52 1.50 -0.31
NATIONAL GRID 2.23 1.48 1.48 -0.75
SEVERN TRENT 2.87 1.46 1.46 -1.41
VODAFONE 3.35 1.42 1.45 -1.90 *** REDUCING ***
DAIRY CREST 1.88 1.40 1.43 -0.45
ROYAL DUTCH SHELL 2.91 1.38 1.41 -1.50 *** REDUCING ***
DRAX 2.38 1.32 1.33 -1.05
SCOTTISH & SOUTHERN ENERGY 2.50 1.33 1.33 -1.17
CENTRICA 1.64 1.27 1.28 -0.36
KINGFISHER 1.42 1.25 1.27 -0.15
HALMA 1.87 1.44 1.20 -0.67
COMPASS 2.08 1.06 1.07 -1.01
NORTHUMBRIAN WATER 3.04 1.02 1.04 -2.00 *** REDUCING ***
PENNON 2.56 0.94 0.95 -1.61 *** REDUCING ***
MAPELEY LTD 1.22 0.84 0.71 -0.51
ROYAL & SUN ALLIANCE 1.76 0.66 0.66 -1.10
INTERNATIONAL PERSONAL FINANCE 0.91 0.64 0.62 -0.29
SCOTTISH & NEWCASTLE 4.05 0.30 0.30 -3.75 *** REDUCING ***
EMAP 1.75 -1.75 *** ACTION ***
RANK 0.47 -0.47 *** REMOVED ***
So what are we seeing so far?

Well, as predicted, RANK has now definitely departed. EMAP has also gone and I didn't spot this one coming although with hindsight this was predictable as it relates to corporate action. EMAP was delisted on 20/03 as a result of private equity acquisition. Not sure if the timing of this will mean we end up with 49 holdings in IUKD. Guess we'll have to wait and see.

SCOTTISH & NEWCASTLE. PENNON, NORTHUMBRIAN WATER & INTERNATIONAL PERSONAL FINANCE are all being reduced but they haven't disappeared as yet. There are also significant reductions for ROYAL DUTCH SHELL, VODAFONE and UNITED UTILITIES.

In terms of new entrants we have 5 of the 7 predicted: YELL GROUP, DEBENHAMS, BARRATT DEVELOPMENTS, TAYLOR WIMPEY & HBOS. So far no sign of INVESTEC or PERSIMMON. This could mean that I need to review my interpretation of the IUKD rebalancing rules unless others turn up over the next few days.

Increases in the following holdings are also worthy of note: ALLIANCE & LEICESTER, BRADFORD & BINGLEY, ROYAL BANK OF SCOTLAND, RENTOKIL INITIAL, DSG INTERNATIONAL. So, including the addition of HBOS, there is a definite swing towards financials which was bound to happen this time around. The significant increases in RTO and DSGI suggest that forward yield predictions from Markitt do not include significant dividend cuts during TY08/09.

There are currently 51 holdings in the fund. iShares publish the fund position at the start of day prior to the market opening. So let's see how things develop over the next few days.

Degsy
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