A Strong Rebound, Despite Lower Dividend Income
October delivered a welcome change after a difficult September. My portfolio performed particularly well, with broad participation across sectors, although dividend income was slightly lower than last year.
Global markets: generally positive
The indices I track mostly finished October higher. The AEX Total Return Index led with +3.6%, followed by the Dow Jones Industrial Total Return Index at +2.8% and IWDA at +2.1%. The S&P 500 gained +0.7%, while the STOXX Europe 50 added +0.5%.
Interestingly, broader global market performance was not universally positive. J.P. Morgan Asset Management reported weakness in global equities, particularly emerging markets and AI-related technology stocks, amid questions about returns on enormous AI infrastructure investments. This makes the performance of my portfolio even more interesting. Read the October market review.
Portfolio performance: a very strong month
My portfolio delivered an average price increase of +6.5% across 31 holdings, comfortably ahead of all five indices in my own comparison.
The three biggest winners were:
- Walmart (WMT): +19%
- Air Products (APD): +16%
- Shell: +15%
Visa also gained 15%, closely followed by Exxon Mobil at 14%.
The biggest losers were concentrated in technology:
- ASML: -11%
- Monolithic Power Systems (MPWR): -11%
- BHP: -6%
ASML and MPWR provide a great example of why I don't attach much importance to monthly price movements. Both were among my strongest performers in September, rising 11% and 10% respectively. One month later, both are down 11%.
The breadth of October's recovery was impressive: 26 winners and only 5 losers.
This is almost a complete reversal of September, when I had only 7 winners against 24 losers and the portfolio declined 0.9%.
More importantly, the portfolio's +6.5% average increase substantially exceeded the indices I track. I wouldn't interpret one month's relative performance as evidence of structural outperformance, but October demonstrates how diversification can work when different parts of the portfolio contribute simultaneously.
Dividend income: down slightly, but underlying growth is healthy
Dividend income was less spectacular. At constant exchange rates, income declined from €201 to €186 (-7.3%). Currency movements reduced the decline, with income after FX at €192. After tax, I received €164 versus €170 last October, down 3.7%.
USD dividends fell from $233 to $216 (-7.3%), but once again the headline hides some encouraging developments:
The exceptional increase at ADP isn't purely organic dividend growth. As discussed in earlier reports, additional shares purchased earlier this year significantly increased ADP income. The rest of the increases are organic by nature. MPWR looks really nice, but PM also picked up the pace in the last two years!
Final thoughts
October was a great reminder that markets can turn around quickly. September brought 24 losers. One month later, October delivered 26 winners.
Dividend income moved slightly backwards, but several underlying holdings continue to increase their distributions. That's what ultimately matters to me.
“Successful investing is less about predicting what happens next and more about owning quality businesses long enough for compounding to work.”
Prices will fluctuate every month. The objective remains the same: keep building an increasingly diversified and growing stream of dividend income.
