My Unit Trust Asset Allocation
Dear all,
Some readers had asked me about my unit trust portfolio. Previously, I had displayed my unit trust portfolio at FSM platform but they have since removed the feature on their site. Therefore, I no longer disclose my unit trust portfolio to readers. For unit trusts, fund selection is actually secondary. The most important part is still asset allocation. Therefore, I will instead disclose my asset allocation for my unit trust portfolio only. If readers are interested on those funds behind the allocation, we can discuss further in the comments section of this blog post.
Since unit trusts are supposed to be longer term investments, I don't think I will disclose my asset allocation monthly. Maybe once a year will be enough.
Do take note that my unit trust portfolio is constructed using CPF funds only, therefore for some funds which are not included for CPF investments, I might not be so familiar as I did not look into them. Also, do note that some funds in my CPF investments portfolio are no longer included for CPF investments as they had been removed from the list. But I still hold them in my portfolio currently. So here it goes:
Asset Class
Equity 84.72%
Balanced 12.89%
Short Duration Bond 1.2%
Fixed Income 1.2%
Geographic
Asia Pacific Excluding Japan 18.77%
Global 16.13%
Emerging Markets 15.66%
Japan 11.14%
US 7.46%
Singapore 6.58%
Asia excluding Japan 6.04%
Taiwan 3.47%
Europe including UK 3.16%
Thailand 3.15%
Indonesia 2.85%
India 2.12%
Korea 1.75%
Malaysia 1.71%
Welcome any comments (if any) on my unit trust asset allocation.
Labels: CPF, Others, Portfolio, Strategy, Unit Trust
posted by ghchua at 2:43 PM
8 Comments:
seldom, I see posting on unit trusts. For your fixed income, would it be a unit trust solely on fixed income? If so, will you be looking at switching the fund given fed tapering?
Hi LC,
Yes. It is a fixed income fund. My allocation to fixed income is already very low. As you can see, equity funds made up of about 85% of the portfolio. There is also some fixed income component in those balanced funds, so if you take the overall portfolio as a whole, it is less than 10%. I don't think I could cut further.
Also, fed tapering is only one component that affect a fixed income fund. Others include credit ratings, currency etc. If they lose on the price of those bonds, they might be able to allocate on the currency portion and made some forex gains when converted back to Sing dollar pricing.
Anyway, I leave it to the fixed income fund manager to manage those stuff. I am only concerned with my asset allocation.
Yes, afterall the manager earns a management fee. I hold a fixed income fund, like you, small allocation as well. Happy to see good distribution quarterly. So, leaving to the fund manager to manage too
Hi LC,
I think I have different focus from you, when investing in fixed income funds. I used it as part of my asset allocation strategy, and not for their distributions. The reason being I invested in them using my CPF funds. Distributions will go straight back to my CPF accounts, which I don't really like the idea. Therefore, whenever possible, I will always opt for automatic re-investment of those distributions back into those respective funds. It is the same for equity and balanced funds as well.
So, when hunting for CPF included unit trusts, I actually prefer funds with no distribution.
Hi GH,
Why do you prefer funds with no distribution?
If it is for compounding, then the distribution would likewise get the compound interest of the CPF but at a different rate though.
Ed.
Hi Ed,
If a fixed income fund has potential to deliver more than the interest rate that CPF OA is paying you (you attempt to do that, otherwise why bother to invest your CPF OA in the first place?), then I would prefer to compound the distribution in the fund rather than CPF OA.
Remember there is no free lunch. Just like stocks, for funds with distribution, the fund price will adjust downwards accordingly the next pricing day to reflect the distribution being paid out. For funds with no distribution, there will be no such issue, all else being equal.
Do take note that my preference for funds without distribution is only for CPF included funds only.
Shifu Chua
L38, any good news? Seems good to have some more. How is their hotel and property broking doing? Wish to have your insight
Thanks
Hi Sunny,
I think I will just give a short reply as this blog post is really about unit trust, and not stocks.
For AF Global, I think nothing changes. The thesis is still vaild. With re-opening, their assets in Phuket should benefit from more tourists. As for property broking, I think just by reading headline news, you would have noticed that residential resale transactions in Singapore had gone up lately after the Hungry Ghost month. Therefore, I think Knight Frank should do reasonably well.
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