cyclone's portfolio

[cif5000]

The remaining properties have long been categorized under "Properties developed for sale".
Hope someone is interested to gobble it up.

According to the latest AR, "The sale is highly probable and is expected to be completed within 12 months."

[cyclone]

Thanks cif5000 and weii for the inputs.

[cyclone]

I am not a fund manager, I just manage for my next of kin.

This is the portfolio I have been managing for about 8 years. It started at the end of December 2009.
As it coincidentally started at the end of bear cycle, it has been performing well up until now.

The portfolio started with a few stocks, it comprises of 32 stocks now.  
Cash has been intermittenly input to add new stocks when there is spare money. 
Some of the companies have been in the portfolio for many yeas. Some were just bought recently.

As usual, cash is minimal.

Dividends received were never included in the NAV calculation.

Top 25 stocks as at 28 January 2018 :
1. HOTEL GRAND CENTRAL 7.95%
2. WHEELOCK PROPERTIES (S) 5.28%
3. HONG LEONG FINANCE 5.12%
4. GLOBAL INVESTMENTS 4.58%
5. FRASERS LOGISTICS & INDUSTRIAL TRUST 4.54%
6. METRO HOLDINGS 4.12%
7. SINGAPORE EXCHANGE 4.06%
8. LOW KENG HUAT (SINGAPORE) 3.93%
9. FRASERS CENTREPOINT LIMITED 3.91%
10. HOTUNG 3.87%
11. SINGAPORE REINSURANCE CORP 3.52%
12. ELEC & ELTEK INT CO (US$) 3.46%
13. GL 3.32%
14. JARDINE CYCLE & CARRIAGE 3.08%
15. SINGTEL 2.73%
16. VICOM 2.67%
17. GK GOH 2.57%
18. KEPPEL T&T 2.52%
19. SIA ENGINEERING 2.47%
20. NEW TOYO 2.47%
21. PCI 2.46%
22. CHUAN HUP 2.43%
23. BOUSTEAD SINGAPORE 2.35%
24. FAR EAST ORCHARD 2.32%
25. ST ENGINEERING 2.20%

Top 25 stocks account for about 87.91% of portfolio.

The portfolio is +4.32% ytd vs STI +4.83% ytd.

[BlueKelah]

Thanks for sharing,

But it seems like unable to outperform the STI much given the heavy diversification into 30+ stocks and being fully vested. Also many holdings look like blue chips which will just track the index mostly.

Perhaps u can consider to rethink ur holdings number or just buy index as buffet has advised. As u notice small cap stocks like PCI have really performed well whilst throwing off a high dividend yield every year.

To note, by Dec 2009 Sti has recovered from lows of below 1800 to 2800+ so it wasn't really that great of a buy in point.



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[edragon]

Thanks.

No DBS, OCBC or UOB?

[cyclone]

Thanks.

No DBS, OCBC or UOB?

Yes, never bought any of them.

[cyclone]

Thanks for sharing,  

But it seems like unable to outperform the STI much given the heavy diversification into 30+ stocks and being fully vested. Also many holdings look like blue chips which will just track the index mostly.

Perhaps u can consider to rethink ur holdings number or just buy index as buffet has advised. As u notice small cap stocks like PCI have really performed well whilst throwing off a high dividend yield every year.

To note,  by Dec 2009 Sti has recovered from lows of below 1800 to 2800+ so it wasn't really that great of a buy in point.



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Thanks for the suggestion. 

By gross calculation, I think the portfolio lags STI.

As at 28 January 2018
The portfolio :
Dividend yields : 8 * 4.5% = 36%
Change in NAV per unit = 11.8%
Total return for the period = 47.8%

STI :
Assume dividend yield 3% per year : 8 * 3% = 24%
Assume STI was 2850 at end of Dec 2009. Change in STI =  3567.14 / 2850 = 25.2%
Total return for the period = 49.2%

But I won't buy STI ETF or constitute the portfolio to track STI for the moment. I don't want to raise the white flag yet.
Heavy diversification does not mean that it can not beat STI much.
Yeoman Capital Management  and Aggregate Asset Management with diversified portfolio outperform the index.

[BlueKelah]

I wouldnt say it lags, I would say its basically no difference. LPPL.

Heavy diversification does not mean that it cannot beat STI. However within that heavy diversification, there are some factors that have to be there to beat STI.

1) From what I can see of Yeoman, the first thing that strikes me is that they started the fund in october of 1997. IIRC the index back then was around 2200+ and by end of the year it had already hit below 1600 points. Does it seem unusual they started at such an opportune time when the market was at the lowest? Or are they presenting their fund's data as such to show outsized gains? I guess you would never know unless you invested with them when they first started out with a fixed amount and then looked at your statement today and compared to STI and annualized it over 20 years..

2) I do not know how transparent they are with their holdings but who knows, they could have 15-20 stocks only during good times with larger cash position and buy more expanding to 30+ positions during market dips. Can you guarantee that they are always fully vested and really dont practice any timing? Obviously they will practice timing?

3) These big funds are also able to have big positions and can even partake in things like taking a company private, preference shares, etc... They are privy to privatisation and other corporate moves which OPMI are unable to know. This can play a very big part in how much return they can make from select investments. They can do things like take an undervalued small cap private which was not doing too well and then chop it up to sell for a big gain. Or just turnaround the business and maybe generate 20-30% yield.

One good example is Berkshire hathaway, its was compounding around 20%+ a year. but now is more like half of that due to the size as Warren says. Like now they have a big cash position, I am sure they are starting to lag the market, since their cash is not going up at all. And you have full access to Berkshire holdings, you can see that at times their portfolio lags the market, thats probably why Warren advices index fund and says that 90%+ funds do not beat index over long term.

So I wouldnt use funds to prove the point that heavy diversification cannot produce good returns. its just due to the nature of big funds, we cant really use them to talk about heavy diversification.

Maybe a fun exercise could be to see what your return would be compared to STI if you had started one year before during the GFC?

[corydorus]

With large funds, the only way to beat STI is to buy the Banks for this period because the run up is mainly due to Banks.
Will it go further ? Dunno ...

Cory

[weijian]

Investing, like life, is a journey.

Although the returns hasn't out-performed, but pretty sure the active management of the last 8 years has returned much more experience and wisdom, than a passive following of index fund would. In other words, the "return of equity" is the same, but the 'return of experience" isn't. Who knows how this experience can compound and make a real difference in the next 8 years?