My Unit Trust Asset Allocation

Dear all,

After nearly one year, I guess it is time for another summary on my unit trust asset allocation. You can refer to my previous one at the link below:

https://ghchua.blogspot.com/2024/09/my-unit-trust-asset-allocation.html

For asset classes, I have done nothing much other than consistently adding onto the list of unit trusts that I had been holding for CPF Investments. I have again been defensive for the past one year or so, and therefore increased my allocation to short duration bond fixed income fund again. The other asset classes are obviously down correspondingly in terms of percentage of allocation, with my additional allocation to the short duration bond fixed income fund.

For geographic exposure, Emerging Markets, Japan and Singapore funds were the out performers in the portfolio. Asia excluding Japan funds also did well.

Laggards are mainly single country funds. Most of these single country funds were in emerging/developing markets and the likes of India, Thailand, Indonesia and Malaysia each have their own country specific issues for the past year, which affected their respective stock market performance. 

Going forward, my strategy is to add onto existing funds, while continue to maintain a more defensive positioning in terms of asset allocation. I will continue to allocate more to fixed income instead of equity, with emphasis on shorter duration to mitigate interest rate fluctuations. I will also stick more to global, regional and developed markets single country funds to mitigate emerging/developing markets country specific risks.

Asset Class

Equity 79.53%

Balanced 12.82%

Fixed Income 7.65%

Geographic

Global 21.26%

Asia Pacific Excluding Japan 15.44%

Emerging Markets 13.41%

Japan 12.35%

US 8.32%

Singapore 8.29%

Asia excluding Japan 6.40%

Taiwan 3.22%

Europe including UK 3.05%

India 1.95%

Thailand 1.80%

Indonesia 1.78%

Malaysia 1.43%

Korea 1.40%

Welcome any comments (if any) on my unit trust asset allocation.

My Unit Trust Asset Allocation

Dear all,

After nearly one year, I guess it is time for another summary on my unit trust asset allocation. You can refer to my previous one at the link below:

https://ghchua.blogspot.com/2023/09/my-unit-trust-asset-allocation.html

For asset classes, I have done nothing much other than consistently adding onto the list of unit trusts that I had been holding for CPF Investments. I have again been defensive for the past one year or so, and therefore increased my allocation to short duration bond fund again. The other asset classes are obviously down correspondingly in terms of percentage of allocation, with my additional allocation to the short duration bond fund.

For geographic exposure, Global, Singapore and US funds were the out performers in the portfolio. India, Malaysia and Taiwan funds also did well.

Laggards continued to be funds with exposure to China. Though I don't specifically hold any China funds, Asia Pacific Excluding Japan, Emerging Markets and Asia excluding Japan regional funds do have decent exposure to that market, which dragged down their performance. Other laggards include funds invested in Indonesia and Thailand. 

Going forward, my strategy is to add onto existing funds, while continue to maintain a defensive positioning in terms of asset allocation. I will continue to allocate more to fixed income instead of equity, with emphasis on shorter duration to mitigate interest rate fluctuations.

Asset Class

Equity 81.2%

Balanced 12.87%

Short Duration Bond 4.95%

Fixed Income 0.98%

Geographic

Global 20.27%

Asia Pacific Excluding Japan 16.32%

Emerging Markets 12.66%

Japan 11.43%

US 8.71%

Singapore 7.68%

Asia excluding Japan 5.68%

Taiwan 3.32%

Europe including UK 3.23%

Indonesia 2.73%

India 2.58%

Thailand 2.39%

Malaysia 1.71%

Korea 1.29%

Welcome any comments (if any) on my unit trust asset allocation.

My Unit Trust Asset Allocation

Dear all,

After nearly one year, I guess it is time for another update on my unit trust asset allocation. You can refer to my previous one at the link below:

https://ghchua.blogspot.com/2022/11/my-unit-trust-asset-allocation.html

For asset classes, I have done nothing much other than consistently adding onto the list of unit trusts that I had been holding for CPF Investments. I have been very defensive for the past one year or so, and therefore increased my allocation to short duration bond fund significantly. Equity allocation was down correspondingly, due mainly to its relative under performance in general and also adding onto other asset classes.

For geographic exposure, Global, Japan and US funds were the out performers in the portfolio. Since Global funds have greater exposure to US and Japan, it is understandable that they have performed well along with these markets. Laggards continued to be funds with exposure to China. Though I don't specifically hold any China funds, Asia Pacific Excluding Japan, Emerging Markets and Asia excluding Japan regional funds do have decent exposure to that market, which dragged down their performance.

Going forward, my strategy is to add onto existing funds, while continue to maintain a more defensive positioning in terms of asset allocation.

Asset Class

Equity 81.4%

Balanced 13.01%

Short Duration Bond 4.56%

Fixed Income 1.04%

Geographic

Global 19.19%

Asia Pacific Excluding Japan 16.68%

Emerging Markets 13.21%

Japan 12.13%

US 8.01%

Singapore 7.44%

Asia excluding Japan 5.6%

Europe including UK 3.2%

Taiwan 3.1%

Indonesia 3.1%

Thailand 2.93%

India 2.32%

Malaysia 1.62%

Korea 1.46%

Welcome any comments (if any) on my unit trust asset allocation.

My Unit Trust Asset Allocation

Dear all,

After slightly more than one year, below is another update on my unit trust asset allocation. You can refer to my previous one at the link below:

http://ghchua.blogspot.com/2021/10/my-unit-trust-asset-allocation.html

For asset classes, I have done nothing much other than consistently adding onto the list of unit trusts that I had been holding for CPF Investments. However, I have increased my allocation in the short duration bond fund slightly, to take advantage of the increasing interest rate on the short end of the bond duration.

For geographic exposure, there had been a major drag in Asia Pacific Excluding Japan, Emerging Markets and Asia excluding Japan funds, as China and Russia are the major draw downs. Tech sell-offs had also affected tech heavy single country equity funds with exposure to Korea and Taiwan. This had been compensated by better performances in India and SEA markets like Singapore, Thailand, Indonesia and to a lesser extent Malaysia. US and Europe including UK also suffered, but to a lesser extent as compared to the major drags.

Going forward, my strategy is to continue to add onto existing funds, while attempting to maintain a more defensive positioning in terms of asset allocation.

Asset Class

Equity 84.57%

Balanced 12.68%

Short Duration Bond 1.61%

Fixed Income 1.14%

Geographic

Asia Pacific Excluding Japan 17.64%

Global 16.25%

Emerging Markets 14.46%

Japan 11.24%

US  8.04%

Singapore 7.78%

Asia excluding Japan 5.74%

Thailand 3.64%

Indonesia 3.26%

Europe including UK 3.26%

Taiwan 3.07%

India 2.29%

Malaysia 1.81%

Korea 1.54%

Welcome any comments (if any) on my unit trust asset allocation.

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.

CPFIS Review - CPF-SA Investments

I promised a review of my CPF investments in my investment strategy for 2012 post earlier in the year. So, here it is and I will start off with a review of my CPF Special Account (i.e. CPF-SA) investments.

Background

According to the CPF Board, “given the higher risk-free interest rate on the Special Account, it is better to be more conservative than to subject these savings to the uncertainty of CPFIS returns.” Savings in the Special and Medisave Account (SMA) currently earn either 4% or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is the higher. The CPF Board also announced that the minimum floor rate of 4% in the Special, Medisave and Retirement Account (SMRA) will be extended to the end of 2012.

An additional 1% interest will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the member’s SA or RA to enhance his retirement savings.

From 1 July 2010, the first S$40,000 of CPF Special Account (SA) balances will no longer be allowed to be used for investments.

Initial Strategy

My initial plan is really to invest all my CPF-SA monies into balanced funds, since CPF-SA is locked in for very long term, has limited use and therefore one can be aggressive. Therefore, I beg to differ with the statement from CPF Board that it is better to be conservative.

Since pure equity funds and stocks cannot be invested using CPF-SA monies, balanced funds are the next best option. Bond funds and Protected funds are out since they will not be able to beat CPF-SA interest rate. Lifestyle funds like UOB GrowthPath series comes with automatic adjustment of asset allocation as one ages, which I rule out because I prefer to do my own asset allocation. I leave out ILPs as they come with higher sales charges. I can get better sales charge by investing in unit trusts at online platforms.

Fund Selection

The next part is to decide what funds to invest. I looked at all the balanced funds available for CPF-SA investment and selected 3 of them. Two are Asian focused balanced funds and another global balanced fund. These funds are classified as Medium to High Risk under CPFIS Risk Classification. The reason being I wanted to be aggressive, and Asian focused balanced funds should deliver better return than a global one.

1 PineBridge International Funds (Formerly AIGIF) - Acrons of Asia Balanced Fund. This is the most aggressive fund in the CPF-SA investment list. Its expense ratio is a bit on the high side, but it has a huge fund size of more than $1 Billion. I like the fact that they are investing in growth companies in Asia, and can even go above 70% on the equity side. They can also invest in preference shares as well. Most of their bond allocation are in SGD denominated papers, so minimum currency risk on the bond portion. Being aggressive, they can under-perform badly during market downturn, but they will be able to out-perform most of the balanced funds when markets are doing well.

2. Eastspring Inv (Formerly Prudential) Asian Balanced Fund. This fund complements PineBridge International Funds - Acrons of Asia Balanced Fund because it invest in Asian equities too, but not as aggressive as 1. It will mostly track the index closely, which means it will not under-perform the market badly during downturn. Its bond portion are in US papers, and therefore there is currency risk here. It is a typical balanced fund, with mostly 50%:50% equity:bond allocation. This is a safe fund if you want market return, without being too aggressive or defensive. It has one of the lowest expense ratio in the CPF-SA investment balanced fund list.

3. Templeton Global Balanced Fund. This fund is a global balanced fund, with focus on value large cap. Its bond portion is invested globally. It is also your typical balanced fund, with mostly 50%-60% allocation in equity. Its expense ratio is quite high last time but has since reduced it subsequently by eliminating its feeder fund structure.

Analysis

Since I have started investing in these 3 funds, Templeton Global Balanced Fund have disappointed me. The other two funds had performed up to my expectation.

What Has Gone Wrong

I did not introduce an Asian Balanced value focused fund like First State Bridge to complement my existing growth oriented Asian balanced funds. This has resulted my CPF-SA investment portfolio to be a little bit more volatile than I would have liked. Templeton Global Balanced Fund is supposed to exhibit the stability, but it has disappointed me as far with its performance and volatility.

Also, I should not have rule out UOB GrowthPath series as they come with low expense ratio and low volatility. Given a choice, I would have replace Templeton Global Balanced Fund with either DWS Premier Select Trust or UOB Growth Path 2040.

Action Plan

There is not much I can do now. I cannot switch funds because of the increasing CPF-SA investment limit. If I sell one of the funds, I will not be able to re-invest the proceeds anymore since I will have to maintain at least $40K in my CPF-SA. I also cannot invest using my CPF SA funds anymore since I have not reach the investment limit in my CPF-SA. I guess for my remaining funds in CPF-SA, I will have no choice but to just leave it there and earn the CPF-SA risk free interest rate.

PS: Most of my CPF-SA investments are in Non-IA status, which explains why the $40K restriction comes in. If you have invested using IA status, then you can perform the switch even if your CPF-SA has less than $40K. Thanks to Sanye for posting the question.