2018 1H Report

This looks to be a year that I will not hit my target. Slightly disappointed but it is not totally unexpected. I am happy that the longer period numbers are still beyond the stretched goal. Also, I am pretty comfortable with my current holdings and beyond unforeseen circumstances,  I do not foresee much changes to my holdings for the rest of the year.

Another positive for the year is the 9k dividend collected thus far.  With another 10k coming in for the rest of the year, this will be the record year in terms of dividend.

Performance

The goal is to achieve at least 8% return with a stretched goal of 12% with STI ETF (ES3) as benchmark.

As seen from the above graphs, Q2 declined by 6%, resulting in a -5.1% return for 1H. I am way below my goal and lag STI ETF by 2.9% as it registered a -2.2% return for the half. One consolation is the narrowing gap since April. The other consolation is my CPF portfolio inches ahead as it just declined by 1.1%.

Tracking back to 2015, the year I started revamping my portfolio, I am glad to say that I am still ahead of both my stretched goal and benchmark. I am also happy with the 5-year and 10-year numbers.

With another 1.5 years to go before the next strategic review, I am pretty confident that I will achieve the set goals.

Allocation

One of my key strategies to achieve my target is maintaining the following allocations.

Asset allocation of 30% cash and 70% stock
A last look at my spreadsheet shows that I am pretty much align to the above. With the update of my strategy for market correction/crash, I am likely to utilize the opportunity fund in the coming months.

Dividend to growth/value stocks at 60%-40%

R: REITS, D: Dividend, G: Growth, P: Punt, T: Turnaround, V:Value

As seen from the above table, I have more of less kept to my allocation. The slightly higher allocation to growth/value stocks is due to recent accumulation of international counters and Hongkong Lands.

The dividend has provided support for the weaknesses in my holding, else the performance will be even uglier.

Maximum exposure of 15% to overseas counters
Last July’s foray into US counters started a new adventure for my investing journey. One year into it, I am still learning about it and sensing its ebb and flow. I have slowly but surely increased my percentage in them. It stands at about 12% now and I probably am looking at increasing it to 20% by end of 2019.

Individual stocks

Core Holdings
These 9 (out of 27) holdings make up 63% of my outlay cost. They have a larger influence on my portfolio performance, so I am monitoring them more closely. I have been talking about time-frame recently hence I decided to include the period that I have held them in this latest report.

As seen from the table, the poor return from Valuetronics, UMS and Parkway this year are mitigated by the strong performance by IFAST.

Weaker short term guidance by UMS and Valuetronics key customers have affected the two counters but they should continue to do well in the mid- and long term.

More importantly, I have bought them primarily for their dividend and I am confident that they can maintain the payout for the next few years.

As for Parkway, the increase in its price last year was unexpected (even with the divestment gain), so I deem its correction to the current level as quite reasonable. Going forward, it should be able to continue to increase its DPU and recycle its asset. So definitely still going to hold on to my current stake.

Looking at a longer time-frame, I am happy that IFAST, Valuetronics, FCT and PLife have returned double digits return. If not for the drag by Raffles Medical Group, the average total return from this group will stand at 10%.