Cash / SRS Portfolio
Performance Indicators / Dividends
- YTD Time weighted return: -25.69%
- XIRR since portfolio inception in 2013: 11.39%
- Dividends collected: SGD 1,368.14
- Tencent – HKD 1.2
- OCBC – SGD 196
My portfolio performance in March was pretty horrendous, but still acceptable. At the dead lows of the month, I was looking at over 35% down in portfolio value, thanks to the panic selling in global indices.
The lucky thing is I came in at close to the lows of the market to take a position in many blue chip REITs, thinking that some of them look way way wayyyy too cheap. The subsequent over 20% recovery from the lows help offset earlier losses.
Overall portfolio value decreased 7.7% to $174,243 mainly due to market value losses of $34.6k, offset by $20k of capital injections.
There were so many transactions this month. I would broadly classify them into 4 groups:
- Selling to avoid losses – This category of transactions generally relate to my US, HK Portfolio and non-core REITs like Eagle Hospitality Trust and Ascendas India Trust. I’ll write about EHT’s implosion in due course.
- Buying due to short term oversold conditions – I bought all sorts of blue chip REITs of the MACF (Mapletree Ascendas Capitaland Frasers) orientation and some choice REITs like Manulife US REIT and counters like Disney.
- Increasing Chinese exposure due to stabilisation of the coronavirus situation there – Counters include Tencent and CRCT.
- Selling due to short term overbought conditions – I sold almost all of the blue chip REITs of the MACF orientation in the past week due to what I perceive to be short term FOMO.
Next month’s Game Plan
It is in a all out sharp sell-off like this that you see the usefulness of having a war chest to draw on. I was able to deploy cash to buy into the decline. In the near term, I expect the short term high from unprecedented monetary and fiscal stimulus to fizzle out as seen by the selloff on Friday in the US session.
As such, I sold off my short term positions in anticipation of the indexes retesting the lows. If the lows hold, I may consider looking to deploy more firepower into the markets. If not, all bets are off as we may hit a lower low.
The main issues that I think we need clarity on for this market to stabilise is 2 fold.
- The West to get their coronavirus situation stabilised.
- The extent of damage caused by credit defaults to be known, to some extent at least.
As usual, this is not a call to buy or sell securities and its just sharing my own thought process for your information. Please do your own due diligence.
Endowus CPF OA Portfolio
As you may know, I’ve started investing my CPF OA funds with Endowus. As such, I will present my portfolio performance going forward for those interested to know more.
I started with initial $5,000 investment with recurring monthly top ups. I increased my monthly top up to $3,000 in March in response to the Covid-19 sell off. I’ve adjusted my monthly top up to $5,000 going forward to take advantage of an anticipated further sell off.
Automatic rebalancing triggered
One thing that happened this month thanks to the sell-off was a rebalancing trigger. As such, I thought I’ll talk a bit about the rebalancing method used by Endowus.
Endowus triggers a rebalancing notification with the portfolio asset allocation moves 10% away from its target asset allocation. Let’s say one of the funds in the portfolio had a target allocation of 15%. If due to market price movements the allocation changes to 25%, this triggers the following from Endowus:
- An email notification for rebalancing is sent to investors. You have 2 working days to stop the rebalancing if you wish.
- Rebalancing is performed by selling the overweight funds and then repurchasing funds to attain the target fund allocation.
- All this is done at no cost to investors.
- As you can see from the screenshot, there is a time lag between selling and repurchasing of funds. This is mainly due to the inefficiencies in the system of buying and selling unit trusts.
This way of rebalancing is different from other digital fund advisory platforms out there that does time-based rebalancing (ie rebalance semi-annually). The Endowus team assures me that there is evidence supporting this as a better way of performing rebalancing.
I’ll let you all know if I receive any interesting data from them.
On the Hospitality frontlines
As you may know, my employer is in the Hospitality industry. As such, it was expected that I face some form of pay cuts in order to help the company shore up its cash flows. I’ve personally been asked to take a 10% pay cut for the duration of the crisis with increments suspended for this year.
Kinda sucks but understandable. And nowhere as vicious as the measures announced by our competitor – Marriott. Oh well, life goes on, just throw it down to luck.
The hospitality industry is taking it pretty hard with global hotel occupancy at 20-30%. There is a giant shadow over the industry as people scramble to deal with constantly emerging crises. Hotels are closing and staff at property level are being laid off.
The massive 3.28 million US weekly jobless claims last week is an indicator of this.
Yet, amidst this chaos, there is hope as China has shown with its economy starting to click into gear. I’m personally looking at how to position my portfolio to take advantage of a potential V-shaped recovery in travel once things look up. For now, it might be good to look at hospitality counters that rely heavily on Chinese travel, as they look likely to be the first to benefit from any reopening of Chinese travel bans.
Of course, this is likely a highly risky play, but given the way the counters have been battered over the past month, it may be worth taking a look at.
As usual, to the 11 and 5 people who subscribed to my blog and liked my Facebook page respectively since my last portfolio update, welcome. Feel free to reach out via email or Facebook. I’m usually quite responsive. Hope that you have found my blog content useful 🙂
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