Portfolio Review as of 22 Aug 21. Surviving the China Stock Crash

 I am both relieved and humbled that my model portfolio has continued to outperform S&P500. It is up 20.11% from 23 March 2021. Against 16.14% for S&P500, Vanguard World Stocks with 10.51% and Hong Kong Tracker -10.27%. 

I added an inverse 3x China ETF, YANG in view of the declining trend, plus 3x Emerging Market inverse ETF, EDZ. Both trades paid off and enabled the portfolio to outperform S&P500. These are merely trades and I will only apply them to markets which are on a medium term decline. 

I've also reduced my China exposure drastically to minimise the damage. 




From the chart below, you can see that the outperformance started in May 2021 and was stretched further from July 2021 onwards. I've added further tech stocks and reduced my China exposure.




My exposure to Chinese stocks dropped to 4.8% when it was previously in the high single digits. USD exposure increased to 89%.

The champion was Moderna, up 83% since I bought it in April. I bought this on a hunch that it's vaccine is one of the best. It was also more of a technical play. I spotted the momentum. I've since taken 75% profit. 

Mapletree Logistic Trust up 55.6%. It has solid fundamentals with exposure on logistics and data centre real estate. It is a REIT that provides me with dividend income. 

Microstrategy is a proxy for Bitcoin and is up 40.9%. This is a speculative play and has an exposure of only half of my usual USD10k per stock. 

Alphabet is up 35.3%. It has a very wide mode as a search engine for the world excluding China. It also owns Youtube, which is generating a lot of ad revenue. 

Ethereum is my latest exposure/ I bought about 2 weeks ago and it is now up 33.7%! it is a play on an alternative asset class.


 
The worst performers are all Chinese stocks. They have great fundamentals with very low debt and high growth. I won't be cutting loss nor adding more. My exposure is already filled up. However, if I do see the stocks trending up I will increase my weightage on China from 5% to 10%. 




In the last 30 days, the portfolio has outperformed the three indices. it is up 3.39%. The top performers were:

1. Ethereum +64.7%

2. Bitcoin up 52.7% (both Cryptos were momentum plays)

3. Direxion 3x China BEAR "YANG ETF". This is a trade and expresses my bearish view short term of Chinese equities. 

4. Atlassian Corp or TEAM. This is a momentum play and is up 28.7%

5. Microstrategy is up 28.7%. This is a speculative play and a proxy to Bitcoin.



The worst performers over 30 days are mainly tech stocks like Alibaba, Tencent and the China Tech Index. US credit rating company, FICO is a new addition. It provides credit scoring services.



The last 7 days, worst performers were all Chinese counters, Alibaba, JD, China Tech. The only exception is the mining ETF. 


In the last 7 days, the top performers were inverse ETFs, EDZ and YANG. up 21% and 14% respectively. Lowe's staged a strong return of 9.3%. UnitedHealth Group up 4.9%. 



Significant transactions for the week of 22 Aug:

1. Initiated a BUY on 3x Emerging Market bear, EDZ at 9.16. 

2. Initiated a BUY on 3x China bear, YANG at 17.86. 

3. BUY European ETF, IEV at US$55. The equivalent for a fund is Blackrock European Fund which has outperformed the ETF by 3 percentage points or more consistently. 

4. BUY MSCI World, URTH at 130.31. The equivalent is Morgan Stanley Global Brands, BNY Mellon Global Equities Fund. 

5. Sold ALL my ARK Next Gen ETF. This is but a trade. Price 148.58

6. SOLD ALL my ARK Innovation ETF. Again this is a speculative, momentum trade. Price 119.30 

6. BUY Boeing at 227.14. 

7. BUY Unitedhealth Group at 407.33

8. BUY Lowe's at 189.2

9. BUY FICO at 443. 

10. Buy 3M at 200.38.

11. BUY Prime US REIT at 0.84.  







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