2019 Q1 Performance

A strong start for the first quarter of the year which reverses last year’s loss completely. Its the best quarter since 2017 Q1 and I am grateful for that. The strong performance is largely attributed to a strong rebound in US and HK markets and the run-up in REIT prices for the quarter.

Goal and Strategy

The goal set five years ago is to achieve at least 8% return with a stretched goal of 12%.  This is to be achieved by maintaining the following allocation.

Asset allocation of 30% cash and 70% stock

With the opportunity fund replenished in February, I am currently at 29.6% cash. Ready to deploy for any correction for the rest of the year.

Income to growth/value stocks at 50%-50%

With the tweak done this month to pare down my Singapore growth counters, I am now within the planned allocation.

D: Dividend, R: REIT, G: Growth, P: Punt

Maximum exposure of 30% to overseas counters

Being more familiar with the US market now, I have doubled the cap to 30% for overseas counter. Currently, it stands at 25% and will probably keep to that for the moment.

Performance

As seen from the chart below, I have hit my goal temporarily and stretched goal is within striking distance. I am also happy to be ahead of ES3 by 6.5%.

Short note on CPF Holding

CPF holding consists of only four counters, STI ETF, Vicom, OCBC and Metro. As expected it is trailing at this stage as the other three counters were bought for dividend and bulk of it will only come in May and August. If everything goes well, it should close the gap by the next quarter.

Trial on Tracking Segment Performance

This year I am also trialing a new spreadsheet to track the segmental performance which should provide me a greater clarity of my portfolio’s strengths and weakness. It also dawns on me that I should not just benchmark against ES3 but also ETF for US and HK and compute the overall return based on my portfolio weighting in each country. I have decided to use SPDR S&P500 ETF (SPY) as US benchmark and Tracker Fund (2800) as HK benchmark.

The table below shows the comparison.

With the exception of my CPF Portfolio (in this trial version, ES3 is excluded), I am ahead of the respective indices. I am particularly happy with the exceptional performance of US portfolio which outpaces the benchmark by more than 10%.

For HK portfolio, I only had Tencent at the beginning of the year. And its strong performance has allowed the portfolio to be slightly ahead of Tracker Fund 2800.  I am mulling over just buying ETFs for markets beyond SG and US. In fact, recently I have partially divested Tencent to buy into Tracker Fund (2800). Still thinking but I have an inking that I will divest Tencent completely by the end of the year and just buy ETF for China and HK markets.

Individual Counters

Core holdings

Core holdings are counters which has at least a 5% position size of my portfolio. These are counters which I have a better understanding and hence more likely to hold for a longer period. At the end of the quarter, there are 6 counters (out of 29) in this category. Collectively, they made up about 42% of my cost.

As seen from the table, with the exception of the two REITs, they did not do exceptionally well for this quarter. It looks slightly better if we take a look at the overall average return. I am still confident of their long term prospect and believe that the numbers will look prettier in time to come.

Notable Performers for the Quarter

While the core positions did not perform as well, I am fortunate to have a group of second stringers that stepped up in this quarter to contribute to the strong performance. The table below shows the top 10 performers for the quarter.

Diversification works for me and I would probably continue with this path to reduce my risk in any single counter.

What’s Coming Up for the Next Quarter?

April will see another round of REITs reporting and I believe it will be as per clockwork. For the May reporting season, I am hopeful that IFAST, Valuetronics, HRnetGroup, Arista Networks and Ulta Beauty  would report a good set of results. Straco should also report better numbers as last year’s Q1 was affected by the closure of Singapore Flyer.

Of course the other thing to look forward to will be the dividend payout in the coming quarter. With 90% of my counters paying dividend in the month of May/June, the dividend collected will boost the portfolio’s return by about 2%. And am looking forward to re-invest the dividend received.