Saturday, August 30, 2008

My Investment Portfolio (August 2008)

This month had been a month of purchases for me. This is because I have some cash. They are mainly the proceeds from Pokka Corporation (S'pore) Ltd shares after accepting the offer from Pokka Corporation. Although the final offer price is still not very attractive, I am left with no choice because Pokka Corporation had already secured more than 90% of Pokka Corporation (S'pore) Ltd. Also, there is some cash flow from the dividends from my holdings, mainly from REITs and shipping trusts.

I have re-invest the proceeds into companies outside my top 30 shareholding list. This is because they are mainly small/mid cap stocks which had been sold down badly due to the current global credit crisis. I felt that most of them had been "unfairly punished" as they are still generating good operating cash flow and paying dividends. I hope that one day, the market will be able to recognize their value and they will be in my future top 30 shareholdings list.

I have also subscribed to Lee Metal rights issue. As usual, I hope to get some excess rights warrants. :)

For the coming month, I will be subscribing to Metro rights issue. I will also be looking into investing my dividends slowly back into the market to take advantage of further market weakness. I will also be looking for opportunities to re-invest my expected proceeds from Unisteel Technology delisting via scheme of arrangement.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 31 August 2008)

Top 30 Holdings (Sing$ Denominated shares)
1. Raffles Education Corp
2. Noble Group
3. SGX
4. F&N
5. SembCorp Marine
6. Cosco Corp
8. Jardine C&C
9. Unisteel Technology
10. Jaya Holdings
11. Parkway Holdings
12. Hersing
13. CapitaMall Trust
14. ComfortDelgro
15. Keppel Corp
16. KS Energy
17. SPC
18. Straits Trading
19. Food Empire
20. Bukit Sembawang Estates
21. CapitaLand
22. Mermaid Maritime
23. Wheelock Properties
24. SembCorp Industries
25. Keppel Land
26. CitySpring Intrastructure Trust
27. Eng Wah Organization
28. K-REIT
29. Cerebos Pacific
30. SingTel

Top 5 Holdings (US$ Denominated shares)
1. Jardine Strategic
2. Dairy Farm
3. Hong Kong Land
4. Mandarin Oriental
5. Jardine Matheson

Top Holdings (HK$ Denominated shares)
1. Tan Chong International
2. Fortune REIT

Top Holding (Aust$ Denominated shares)
1. AV Jennings

Top 5 Holdings (CPF OA investment)
1. Keppel Corp
2. CapitaMall Trust
5. Eng Wah Organization

My Hong Kong Stock Portfolio (listed on SEHK)
1. Peace Mark Holdings

My Unlisted Company Portfolio
1. JK Tech Investment

My Unit Trust Portfolio:



Blogger Sgbluechip said...

Hi ghchua! I have been following your UT portfolio for the past 1 year. Is there any changes in allocation for your funds?

Personally I am impressed that your portfolio is still delivering superb gains despite the downside we are seeing.

Gd work!

I personally think that it is a good time to invest more into the market now.

Need to master the buy and forget technique!

4:12 AM  
Blogger ghchua said...

Hi sgbluechip,

Glad that you asked about my UT portfolio. Because most people tends to focus more on my stock portfolio instead when visiting my blog.

My UT portfolio are constructed using pure CPF funds. Which means, there is no cash involved in that portfolio. My cash are invested in stocks directly instead.

My strategy for constructing my UT portfolio is really the diversification approach, similar to my stock holdings. The difference is that for UTs, I tend to select funds which have lower expense ratio. Also, I have taken some contrarian approach by adding into Infinity US 500 Fund, which tracks the S&P 500 lately.

I avoid newly launched funds which focus on current themes or hot sectors like commodities,BRIC etc. I use geographical diversification approach rather than sector diversification.

The shame is that due to new CPF regulation since April 2008, I have not been able to add more funds into my UT portfolio, except from using some dividends from my CPF stock holdings to add onto it, since they are not transferred back to CPF Board and therefore not affected by the new CPF rule. I guess it will take sometime for me to accumulate $20K in CPF-OA before I can start investing more funds into this UT portfolio.

Yes, it is a good time to invest in UTs but do remember to diversify your funds.

6:22 AM  
Blogger Sgbluechip said...

Hi ghchua, thanks for answering my query.

I used to be vested in the infinity funds. I find that although they have low charges, but the returns are poor.

Consider the US Infinity 500 fund. 3 years annualised (offer to bid) returns was -4.2%. S&P 500 annualised returns was -4.65%.

(Both figures obtained from fundsupermart today)

This means that the index fund only outperformed the index by an annualised 0.45% after all charges.

However, we know that all dividends obtained from the index funds are automatically reinvested. Dividend yield for US stocks average a conservative 3% PA.

Where has the additional 2.55% gone to?

It seems that most of our dividends went to management fees and transaction fees. Perhaps currency loss played a part too.

Did I interpret the figures wrongly?

If not, it means that the management fees is much larger than the stated 1.2%.

Btw, S&P 500 forward PE ratio projected by latest ifast report is 17.9 due to earnings downgrade.

But I must say their projections are rarely accurate.

One last question, is the UT portfolio we are seeing on the web being updated automatically everytime you buy or sell funds?

7:10 PM  
Blogger ghchua said...

Hi sgbluechip,

I used US Infinity 500 fund because I couldn't find any other cheaper US equity fund that I could invest using CPF OA.

US Infinity 500 fund is a fund. Therefore, there are charges and management fee is only one of the component. In fact, if you look at the other charges, it already take up at least another 0.5%pa. These includes audit fees, custodian fees, professional fees, registration fees and other miscellaneous charges etc. I haven't even include brokerage charges when they buy/sell stocks in the fund when the index composition changes.

The UT portfolio that you have seen is updated manually everytime I buy/sell funds. The price is updated automatically though, so all I need is to really adjust the number of units whenever I bought into the fund and whenever dividends had been re-invested.

7:02 PM  
Blogger Jess said...

there is something that i don't understand. i thought that you only buy, but, don't sell.

why is there "buy/sell fund" term in your message?

do you want to explain ;p

4:12 AM  
Blogger Sgbluechip said...

Perhaps he meant balancing his portfolio in accordance to his risk tolerance and original asset allocation.

Btw Jess, have been following your comments on ghchua's blog for sometime.

I must say that you are definitely not a novice in the investment world.

Would you like to share what investment philosophy you subscribe to?

What investment instruments are you currently employing and how have your returns been during this current market?

Do share and teach us yah?

Looking forward to your reply!

4:33 AM  
Blogger ghchua said...

Hi jess,

I think the last time I sold a fund was a few years back. At that time, I was still trying to figure out the best asset allocation for my UT portfolio.

Now that my UT portfolio is more or less built up, future funds will be deployed into buying exiting/new UTs. I don't think I will be selling any fund in my list in the near future.

But sometimes, I am being forced to sell out funds because the fund manager might decide to close the fund because the fund size is too low. Or they might decide to close the feeder fund and therefore I have been forced to sell out units in the feeder fund and then buying the offshore fund directly. If you have observed, the case happened in FT Global Balanced fund whereby I have been forced to sell out units in the feeder fund and then re-invest into the mother fund - FTIF-Templeton Glb Bal Fd A(acc) SGD.

So, I guess "buy/sell" funds do apply in this case. Those who followed my UT portfolio would have observed that there is not much turnover and constant switching of funds because that is not my investment style.

12:38 AM  
Blogger Jess said...

my investment is quite similar to your which is into bluechip.

the only different between mine and both of your is that i invest heavily into one and only one counter, around more than half a million.

so far, my return is 40% cos i buy at a very cheap price.

i don't believe in diversfying into too many counters and also progressively.

It is as good as either you don't know what to invest or you are super conservative.

Must well you don't invest cos when market crash, almost 90 per cent of stocks will tank...

Ghchua, may want to comment on his portfolio a few years back VS now.

7:23 AM  
Blogger ghchua said...

Hi jess,

As I've said before in the comments of my previous posting, the main risk of focused investing is non-systematic risk like mismanagement, fraud, accounting scandals etc. These are actually more risky than share price movements because a company can go under and shareholders might not get back a single cent.

I am not worried about share price movements. If share price goes down, I can use my dividend to re-invest at a lower price. I am not using a buy once and hold strategy. I am consistently investing into the market regardless of market conditions. Therefore, market crash or not, no worries because I do not borrow to invest.

3:28 AM  
Blogger Jess said...

i do not agree totally with what you mentioned....

if you have done thorough check and balance within the company, you will know which are the good ones, and which are the black sheep who is doing "cha keow tiao" behind the doors...

and having said that with your vast portfolio and knowledge, i believe you should be capable of finding and sieving out faster than any of us, right?

and you should be encountering more of such instances too since you are buying the whole of SGX...

i must say that investment is all about risk and risk....if you are not game to it, then you should be into UT or even FD...

4:10 AM  
Blogger ghchua said...

Hi jess,

I agree with you that investment is about risk. But more importantly, it is about managing risk. I have choose to do it via a diversified portfolio.

We can do a lot of homework researching about the company. But ultimately, there are still things that are not within our control. After all, we are not running the company ourselves. I am sure you have heard about the SembCorp Marine issue? Mind you, SembCorp Marine is a blue chip company. And blue chip companies are so big. How much homework can you do when checking on these blue chip groups with so many companies inside the group?

And sometimes, company failed for many other reasons other than what I have stated above. I might be because of poor execution on the part of the management, changes in business environment etc. Sometimes, things are not within our control, no matter how much homework we have done.

I am not looking for extraordinary profits in my investment. I am looking for slow but progressive growth in my investments, with some dividends to collect every month.

As long as my portfolio achieved what I have set out for, I think it is good enough. :)

4:33 AM  
Blogger Jess said...

well said, well said....

certainly, i heard about Sembcorp marine....

And i believe you ever heard of APB and SIA when the issues arises are similar and quite close to each other in term of timing....

look where are they now, are they worst off?

If you are getting into something which the SWF have a stake in or it is a trade mark just like coca cola, you are bingo... you can't be wrong....

(but, don't take my word literally for i believe any one of us in the forum should take each other view with a pinch of salt.... for we are all responsible for our loss or gain...)

that is also part of the reason why Buffet select Coca Cola... i believe you have read his book, " the intelligent investor" like a bible....

but, i somehow feel that you are holding on to the mast of a Titanic... when everyone already run for his/her life, but, you prefer to sink with it....

9:00 AM  
Blogger ghchua said...

Hi jess,

I believe that the sky is the darkest before dawn. When there are no more desperate sellers left in the market, that is where the market will seek bottom.

However, we dunno when is the bottom. So, instead of trying to time the market, diversification and slowly buying into the market when others are selling is a good strategy. It had been proven time and again that buying when nobody is interested yields the best returns.

Take your time to bottom pick the market. :)

7:22 PM  
Blogger Jess said...

i don't rememeber telling you i bottom pick the market now.... i didn't...

i pick it many years ago and that is even lower than the current dip...

and basically one need to make minimum/zero mistake as there is no room for error....

it is either you win or you loss...

P.S: the downward momentum is gearing up now... and i am sure you know it deep inside yourself...

do enjoy the fun.. ;p

4:14 AM  
Blogger John said...

Hi ghchua,

I have been following your forum closely and i felt that you are investing unwisely since you are letting your counters swing like a yoyo.

Even though you are a long term investor, certainly there is a point in time when you will need to realise all your profit (aka selling off all your counters).

I am not sure when will that happen for you and when that happen are you able to maximise your gain.


6:30 AM  
Blogger Wealth Journey said...

I applaud his move to list his holdings for all to critique.

I believe there is no right or wrong..
Some believe in putting all eggs in one basket and watching it very carefully... some believe in having a few baskets to mitigate the risk of 1 bad egg destroying all the eggs.

If you are in a hurry to accumulate wealth..(>30% pa) then go for the a few eggs in 1 basket..(I think most typically say around 4-5 concentrated holdings within a basket of 30 different companies.)

But if you don't mind preserving ur wealth and accumulating it slowly (aka the risk management way via Modern Portfolio theory), then you can invest in many asset classes with holdings within that does not affect you materially (but will grow at the expected 8%pa over the long run).

Some will argue that diversification is for people who dont know their stuff. That might well be true ..and it seems a lot of investment professionals can't predict which company will go ...

And for those who dont believe in diversification.. they must have personal belief that they know their investments very well.

No right or wrong.. just as long as the final figure is way beyond your initial outlay.

6:54 AM  
Blogger ghchua said...

Hi john,

Realising of profits is based on my investment objective, and not based on market conditions. That is the framework I am adopting for long term investing.

Currently, my spare cash had been invested into the market. There is no reason why I would want to realize those profits/cut losses just because the market is down or the economy is not doing well.

7:09 PM  
Blogger Mike Dirnt said...

Hi ghchua,

im honored to have my blog linked from your blog :)

you are few years my senior and you have became my inspiration for stocks investment.

8:53 PM  
Blogger ghchua said...

Hi mike,

No worries. This current market downturn is a good test to every investor's investment framework. I hope that we can all become more wiser and with more experience, we can become better investors.

It is good to learn and share from one another via blogs.

12:20 AM  
Blogger Mike Dirnt said...

hi gchchua.

yes i have learned alot from you in the sgfunds forums.

by the way, why didnt you try to monetise your blog through adsense? :P

can add a small revenue to your monthly returns. im sure this question has been asked before

9:42 PM  
Blogger ghchua said...

Hi mike,

Nope. I try to keep my blog clean and free of advertisements. That will also increase its loading speed and also not distract my readers.

As I've said before, my aim of setting up this blog is to share with other investors out there. I do not intend to make money out of this blog.

9:54 PM  
Blogger John said...

Hi ghchua,

You are going to breakeven in your UT soon, but, in the opposite direction. Do you think it is still a smart move to hold on?


4:12 AM  
Blogger ghchua said...

Hi john,

Definitely. I will be holding onto my unit trust investments. In fact, I have made a purchase of $500 into DBS Shenton Global Opportunities Fund last week. I couldn't add a lot of funds into my UT investment as it is invested using CPF funds and I have been restricted by CPF Board regulation to maintain at least $20K each in my CPF OA and SA accounts.

I am currently using the dividends from my CPF stock holdings to add into my UTs. What I do is not to transfer those dividends back from my CPF Investment Account to CPF-OA, which bypass the CPF Board restriction.

6:51 PM  
Blogger John said...

Hi ghchua,

There is something that i need to check with you. How do you enable your dividend from your stock holding in your CPF account to be used for investment?

I check with the bank and they said it is not possible


3:51 AM  
Blogger ghchua said...

Hi john,

It is possible. As long as those dividends are in your CPF Investment Account with the agent bank and not transferred back to CPF-OA, you can use them for your investments.

However, do take note that you are subjected to Stock Investment limit. For unit trust investment, you can invest everything in your CPF Investment Account if you wish to.

7:07 PM  
Blogger Jess said...

ghchua, are you happy now?

4:42 AM  
Blogger ghchua said...

Hi jess,

Certainly. I have bought quite a few counters this month. Will update all readers in my next portfolio review.

6:08 AM  
Blogger Jess said...


Hope that you can scoop up all the counters so that it can booast up the pricing, yeah..

9:16 AM  

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A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

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