Climate & Environment Fund – yearly yield 23,7%

If investment period is long enough, one advantage of dollarcost averaging is that it gradually lowers the overall cost of shares and improves the rare of return. Starting to buy when share price decreases is one good option.

Let’s take an example with Climate and Environment Fund.

From December, 2015, the price started decreasing. I made the first purchase at the red mark 1 in the following curve (12.12.2015). The original plan was to make lump-sum purchase.

After first acquisition, the price decreased continuously till the bottom at the red mark 2 in the chart (March, 2016). During this period, I had thought over if I should sell out acquisition, however, I changed my mind and decided to invest more regularly with dollar-cost averaging method.

From April 4th, 2016, I started to invest regularly, only 40€ that is the minimum saving amount every month, and gradually invest more, till invest 48€ in December, 2016.

During investment, the price has been gradually increasing. Till the red mark 3 in the chart (11.11.2016), all of shares got positive yield, then it was the time to start selling.

Sale date Buying date Selling price(€) Buying price(€ gain(€) gain(%)
2016-11-11 2016-09-02 46.50 46.00 .50 1.09%
2016-11-15 2016-10-03 47.96 46.00 1.96 4.26%
2016-11-17 2016-11-02 51.01 48.00 3.01 6.27%
2016-11-23 2016-08-02 50.42 46.00 4.42 9.61%
2016-11-28 2016-06-02 44.85 40.00 4.85 12.13%
2016-12-01 2015-12-12 115.31 100.00 15.31 15.31%
2016-12-08 2016-05-02 48.10 40.00 8.10 20.25%
2016-12-09 2016-12-02 50.21 48.00 2.21 4.60%
2016-12-12 2016-07-05 50.09 41.00 9.09 22.17%
2016-12-21 2016-04-04 49.34 40.00 9.34 23.35%
Total 553.79 495.00 58.79 11.88%

The average gain is 11.88%. With dollar-cost averaging method, the effective investment principal is 495/2=247.54€. So the real gain is 58.79/247.54=23.7%.

Firstly, I sold shared that was bought in September, 2016. The gain rate is 1,09%. Gradually I sold shared with the least gain from left shares. 21 December, 2016, I sold last shares that was acquired on April, 2016. The gain percentage is 23.35% during eight months. We can see from the red mark 4 shown in the chart.

We sum up five points as follows:

  • The period was only almost one year. It is not a long-term dollar-cost averaging that normally lasts 3-5 years.
  • Keep purchasing when the price is low. This is the good chance to gain more return.
  • When the price is high, had better start to sell and put money into pocket..
  • Always sell shares with the least gain from the left shares.
  • Though the total yield is 58,79€, please keep in mind that wealth accrues gradually little by little. Small money will become incredible amount of money with your patience and time.

2 thoughts on “Climate & Environment Fund – yearly yield 23,7%”

  1. I love dollar cost averaging!!! I especially love it when I get dividends and buy more through my DRIP 🙂 It’s amazing watching your account shares grow over time 🙂

    1. I love DCA too. Compound interest is also our good friend. But Both of them need time to take effect.

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