Update of My Portfolio 11 Jan 2021

 

It has been a wild ride and we have seen the S&P500 fall 36% from Feb to Mar 23 2020, before a massive wave of liquidity pushed tech stocks up. S&P500 ended 2020 up around 16%. Several observations I’ve made.

 

  1. In Nov 2020, as soon as the news of an FDA approved vaccine emerged, old economy stocks recovered strongly. Travel-related, e.g. Carnival Cruise, airlines, hotels all recovered. The mining and energy sector recovered strongly. For this reason, I’ve added Blackrock World Mining into my portfolio but it is not reflected in my portfolio yet (I’ve only recently added). I’ve attached the factsheet above. The AUDSGD shot up from 0.92 to 1.03 within 2 months! I think the mining sector has been in the doldrums for so long, that it is under-invested. We could see a surge in metal prices, especially those related to batteries, electric vehicles like Lithium. I’ve added a mining fund to have exposure in the sector because I’ve decided not to stock pick.
  2. In Dec 2020, Asia ex Japan, Emerging Markets and China has begun to outperform S&P500. There’s a strong outflow of USD into non-US markets, and hence the drop in USD against other currencies. USDSGD fell to 1.32. This outperformance may continue into 2021.
  3. I believe 2021 is a “catch up” year, where old economy stocks, Emerging markets play catch up. Small caps value may also play catch up. Valuations of tech have become rich after the massive rally and hence there’s a rotational play.
  4. However, I’m also adding tech stocks whenever they have corrected to the 150 days moving average, most notably Salesforce, Adobe and Alibaba.
  5. I’ve dollar cost averaged into stocks like Tesla even though it is all time high, as my policy is to buy and hold “pre-earnings” companies that I believe will disrupt major industries. I’ve added a new position in NIO as I believe China will have at least 1 EV champion.
  6. I’ve also dollar cost averaged into ARK Genomic Revolution as I believe healthcare will be the fastest growing sector, next to environmental sector.
  7. I’ve added Square and Microstrategy (new buy) because of their exposure to Bitcoin. I believe Bitcoin will be the alternative currency that many institutions will use. This Bitcoin rally is driven by institutional money so there is more sustainability to the rally.
  8. I’ve taken profit from Booking, Boeing and Schlumberger as they have rallied substantially.
  9. US banks like JPMorgan and Bank of America may rally further as the yield curve steepens.
  10. I’m taking some money off the table. Even though I’m 1.5x leveraged, my sensitivity to the MSCI world is about 0.95x and gradually reducing to 0.9. I believe that many institutions are underweight cash, and so are retail money. The current rally is partly driven by leverage. That be the case, any correction will be swift and be between 10 – 15%. Some time in 2021, there will be a “helluva” correction to shake out those that are overly leveraged. It never hurts to take some profit and keep dry powder.

 

Finally, may we all stay safe. There is talk of travel restrictions gradually being relaxed from May 2021 onwards, as stated by the travel industry associations in the west. I would think this is only possible from mind 2021 onwards, when over 30% of the population has received vaccinations. This is just my uneducated guess.

 

Asset Type

Description

Ccy

Market Price

Last Price Date

Cost Price

Accrued Interest in SGD

Security Code

Country

Sector

%of Portfolio

Unrealised P/L %

Remarks

Action

Equity

Ordinary Share, Issuer: Tesla Inc; Custodian: Bank of New York

USD

880.02

08-Jan-21

395.228

-

TSLA UW

United States of America

Consumer Discretionary

2.37%

122.66%

Added more

 

Equity

Ordinary Share, Issuer: Meituan - CLASS B; Custodian: DBS Bank Hong Kong

HKD

318

08-Jan-21

145.5732

-

3690 HK

China, People's Republic of

Consumer Discretionary

1.47%

118.45%

Equity

Exchange Traded Fund, Issuer: ARK Genomic Revolution ETF; Custodian: Bank of New York

USD

105.85

08-Jan-21

55.1133

-

ARKG UP

Multi-Region

Other

3.04%

92.06%

Added more

 

Equity

Ordinary Share, Issuer: Veeva Systems Inc; Custodian: Bank of New York

USD

288.54

08-Jan-21

157.39

-

VEEV UN

United States of America

Technology

0.26%

83.33%

very small position. Over valued

Equity

Ordinary Share, Issuer: Lemonade Inc; Custodian: Bank of New York

USD

160.74

08-Jan-21

89.0591

-

LMND UN

United States of America

Financials

1.30%

80.49%

Added more

 

Equity

Ordinary Share, Issuer: NIKE Inc -- CL B; Custodian: Bank of New York

USD

146.35

08-Jan-21

91.365

-

NKE UN

United States of America

Consumer Discretionary

0.47%

60.18%

very small position. Over valued

Equity

Exchange Traded Fund, Issuer: ARK Innovation ETF; Custodian: Bank of New York

USD

142.48

08-Jan-21

91.479

-

ARKK UP

Multi-Region

Other

1.53%

55.75%

Fund

Franklin Technology Fund - A - SGD - Hedged - Acc

SGD

21.21

07-Jan-21

14.5784

-

FTTASH1 LX

Multi-Region

Technology

3.26%

45.49%

Equity

Ordinary Share, Issuer: Square Inc; Custodian: Bank of New York

USD

241.45

08-Jan-21

167.6354

-

SQ UN

United States of America

Financials

1.52%

44.03%

Added more

It has Bitcoin Exposure

Equity

Ordinary Share, Issuer: JPMorgan Chase & Co; Custodian: Bank of New York

USD

136.02

08-Jan-21

96.8904

-

JPM UN

United States of America

Financials

0.61%

40.39%

Equity

Exchange Traded Fund, Issuer: ARK Next Generation Internet ETF; Custodian: Bank of New York

USD

159.39

08-Jan-21

114.3273

-

ARKW UP

Multi-Region

Other

1.57%

39.42%

Added more

 

Equity

Ordinary Share, Issuer: Booking Holdings Inc; Custodian: Bank of New York

USD

2,281.54

08-Jan-21

1,658.81

-

BKNG UW

United States of America

Communications

0.82%

37.54%

Taking profit

 

Equity

Ordinary Share, Issuer: Bank of America Corp; Custodian: Bank of New York

USD

32.53

08-Jan-21

24.0494

-

BAC UN

United States of America

Financials

0.58%

35.26%

Equity

Exchange Traded Fund, Issuer: ARK Fintech Innovation ETF; Custodian: Bank of New York

USD

51.96

08-Jan-21

38.6335

-

ARKF UP

Multi-Region

Other

1.40%

34.49%

Added more

 

Equity

Participation Certificate, Issuer: NIO Inc, (NIO UN); Custodian: Bank of New York

USD

58.92

08-Jan-21

44.9224

-

NIO UN

China, People's Republic of

Consumer Discretionary

0.95%

31.16%

New BUY

 

Fund

Fidelity Emerging Markets Fund - SGD - Ydis - Cash

SGD

2.07

08-Jan-21

1.58

-

FIEMFAS LX(C)

Multi-Region

Other

1.77%

31.02%

Equity

Ordinary Share, Issuer: Boeing Co/The; Custodian: Bank of New York

USD

209.9

08-Jan-21

161.6427

-

BA UN

United States of America

Materials

0.57%

29.85%

Taking profit

 

Fund

FSSA Dividend Advantage Fund - A - USD - Qdis - Unit

USD

1.7415

07-Jan-21

1.3596

-

FSIDVDU SP(USD)(U)

Asia Pacific - Mixed

Other

2.76%

28.09%

Equity

Ordinary Share, Issuer: Schlumberger NV; Custodian: Bank of New York

USD

24.84

08-Jan-21

19.8177

-

SLB UN

United States of America

Energy

0.71%

25.34%

Taking profit

 

Equity

Ordinary Share, Issuer: Yum China Holdings Inc; Custodian: Bank of New York

USD

59.87

08-Jan-21

48.3338

-

YUMC UN

China, People's Republic of

Consumer Discretionary

0.64%

23.87%

 

Below is the average and median statistics. “Total” means the returns from both funds and stocks. “Equity” means the returns from only ETF and stocks. “Funds” means returns from only unit trusts.

 

 

 

 

 

Total

Average

25.09%

Total

Median

18.25%

 

Equity

Average

24.89%

Equity

Median

17.44%

 

Funds

Average

25.75%

Funds

Median

23.90%

 

 

The average returns from funds is slightly higher than stocks (25.8% v 24.9%). Median return from funds much higher (23.9% v 17.4%). There are several explanations for funds outperformance of stocks:

 

  1. Funds are for long term holding. I tend to hold them for 3 years or longer if I think they are still good. Hence, the longer I hold, the better the returns. I seldom take profit.
  2. For stocks, I tend to rebalance more frequently. Although I can stay invested in a good company for over 5 years, I will trim the profit when a) it is well above fair value, b) it is overstretched from a technical stand point. The only time I exit a company completely is when I don’t believe in the business model. I have sold my Ping An Insurance 2318 HK completely by now to reduce my number of holdings
  3. Because of 2, I will have more “realised profits” from stocks. The average returns for stocks is likely to be 10 – 15 percentage points higher, because that is where I usually take profit. So median returns may be 32% or more.
  4. The median for stocks is far higher than funds because of outliers like Meituan, Tesla, ARK ETFs which achieved over 100% returns. Funds’ performance is more consistent and cluster around 20 – 30% range. In

 

 

Below is the bell curves for stocks and funds. Funds have more predictable returns. So they mostly cluster around 20 – 30% return per year. Stocks depend a lot of sector and the individual stock pickings. Their returns are MORE dispersed. They can make losses of -10% to 20% over one year, to over 150% in one year. Hence, they tend to be “flatter”, more dispersed.

 

My aim is to make my stock picks MORE skewed to the right, so that I have MORE Teslas, more NIOs, more Meituans. I aim to achieve that for funds as well via sector funds as well as picking better managers.

 

I intend to construct a separate portfolio where I have more concentrated positions on stocks and funds, narrowed to only 10 – 15 stocks / funds, instead of the 50+ now which can become harder to monitor. Over time, I will have a concentrated portfolio of 10 – 15 stocks / funds, and another “more diversified” portfolio of 20 – 30 stocks / funds. I will review my recommendations periodically to assess my performance.

 


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