A volatile quarter due to the escalating US-China tension which saw the market dropped in May but staged a fast recovery in June. My portfolio also managed to eke out a small gain of 3.6% over the last quarter. So stay vested unless you are really good at timing the market.
Goal and Strategy
The goal is to achieve at least an 8% compounded annual return over a period of 5 years. The stretched goal is 12%. This is to be achieved by following the allocation guideline and investing in good counters.
Asset allocation of 30% cash and 70% stock
After injecting some cash to take up FCT preferential offering, I am currently at 28% cash. Comfortable at this level and will not take any action.
Income to growth/value stocks at 50%-50%
After taking up FCT preferential offering and re-investing dividend received for the quarter, the REITs allocation is on the high side.
However, it is not too far off, so will not take any action at the moment.
D: Dividend, R: REIT, G: Growth, P: Punt
Maximum exposure of 30% to overseas counters
I have not shifted fund to overseas portfolio this quarter, so minimum change to exposure that is currently at 24.5%.
As seen from the chart below, I have hit both my goal and stretched goal temporarily. I am happy to be ahead of ES3 by 4.0%.
As mentioned in the last post on reviewing of the four 5-year periods, in order to achieve my goals, I aim to win larger and more often than losing.
Did a fast check on my data and am glad that this is indeed the case for this year and total return. It has been a tremendous year with 80% of my counters are in the green. As for total return, 6 out of 10 counters are in the green.
What is interesting is that even though there is a whopping 20% less counters in the green for total return as compared to this year’s return, the number of counters that have a larger return (>=20%) is comparable. Hopefully, the number of stocks in this category will continue to grow in years to come.
Short note on CPF Holding
As written in 2019 Q1 report, I expected my CPF holding to close the gap when the dividend comes in during this quarter. With the strong performance from STI, the gap is only closed by 0.2%. I remain hopeful that it might still overtake the index by the end of the year as there are dividend to be distributed by Vicom, OCBC and Metro in the second half of the year.
However, even if it fails to do that, the portfolio has achieved its primary objective of beating CPF-OA’s interest rate of 2.5%.
Trial on Tracking Segment Performance
The tables below show the segment performance for Q1 and 1H.
With the rally in June, 1H return for both my portfolio and benchmark are better than Q1. Still manage to stay ahead in all segments, with the exception of CPF portfolio.
Note: CPF in this trial version excludes ES3.
Mapletree Industrial Trust and Straco joined the core holdings list in the last quarter. So that’s 8 out of 29 counters (exclude CPF) and they made up 48% of my portfolio by cost.
The REITs had a tremendous quarter but my other core holdings with the exception of Straco are struggling this year. I still believe in their long term prospect, so am holding on to my positions.
Notable Performers for the Quarter
While the core struggles this year, I am fortunate that my other counters are showing strong performances.
Interesting, there is only one change from Q1 list with Disney replacing Mapletree Logistics Trust which I divested two months ago. What is amazing is that this time round, all the top 10 performers have returned more than 20%, while only 4 counters managed to do that in Q1.
I also decided to check on the top 10 performers in terms of absolute return. As expected there are some changes, with the REITs from core holdings replacing the US counters with lower position size. The list is not order by the size of the return.
What’s Coming Up for the Next Quarter?
Yes, July and August will see another round of distribution from the REITs! I will also receive dividend from IFAST, Valuetronics, Raffles Medical, ISEC, Hong Leong Finance and Singapore O&G.
As for the next quarterly report for my core holdings, I suspect IFAST and Valuetronics might report weaker year-to-year numbers due to the trade war. Raffles Medical Group bottomline will continue to be affected by the start-up cost. On the other hand, results of Food Empire and Straco should be pretty stable.