cyclone's portfolio

[heifien91]

Hi Cyclone,

I believe your calculations are wrong. When you distribute cash out, you are essentially cashing out some of your 30,000 shares in your fund. Meaning to say if at the point in time when you needed 4,000 dollars and your NAV per share is say 10, it means you have to liquidate 4000/10=400 shares. This way your NAV would not change as your share base would have decreased to mirror the fall in total NAV. Likewise, imagine I decide to add more capital into the fund. If I added 4,000, I cannot just say that my total NAV increased by 4,000 dollars without increasing my number of shares. Otherwise, this would just mean my performance would just spike up due to a capital injection, which isn't right.

Let me know if you need further clarifications

Hi Shrivathsa,

I do not use XIRR to compute the return, instead I use NAV per unit method.
I try to compute at the end of each month if I'm free.

NAV per unit at the beginning of CY2014 was 1.297122.
NAV per unit at 2014/08/31 was 1.288124.
So it was still underwater.
There were some distributions during the period. All dividends received were plowed back into the "fund".
If we excluded the distributions, NAV per unit would be 1.432362.

NAV is lower with dividend included, and higher with dividend excluded? It means all dividends were re-invested at higher price, and remain "underwater", right?

Hi CityFarmer, this is how I calculate NAV per unit, not sure whether the methodology is correct or not.

SUPPOSE :

At the beginning of CY2014 :
Number of units = 30000

Cash = 7000
Stock A = 10000 x 0.6 = 6000
Stock B = 20000 x 0.4 = 8000
Stock C = 30000 x 0.3 = 9000

NAV = 7000 + 6000 + 8000 + 9000 = 30000
NAV per unit = 30000/30000 = 1

At the end of May 2014 :
Received dividend from Stock A = 10000 x 0.03 = 300
Received dividend form Stock B = 20000 x 0.02 = 400
Received dividend from Stock C = 30000 x 0.02 = 600
Total dividend received = 1300

Cash = 7000 + 1300 = 8300
Assume the stock price did not change.
NAV = 8300 + 6000 + 8000 + 9000 = 31300
NAV per unit = 31100/30000 = 1.04333

At the end of July 2014, we needed the money and distributed out 4000 from available cash to unitholders :
Cash = 8300 - 4000 = 4300
Assume the stock price did not change.
NAV = 4300 + 6000 + 8000 + 9000 = 27300
NAV per unit = 27300/30000 = 0.91

At the end of August 2014 :
Due the stock price changes
Cash = 4300
Stock A = 10000 x 0.71 = 7100
Stock B = 20000 x 0.39 = 7800
Stock C = 30000 x 0.35 = 10500

NAV = 4300 + 7100 + 7800 + 10500 = 29700
NAV per unit = 29700/30000 = 0.99

NAV per unit at the beginning of the year = 1, NAV at the end of August 2014 = 0.99, so it was still underwater.
If we exclude the distribution to unitholder of 4000, NAV would be 29700 + 4000 = 33700 and NAV per unit would be 1.12333

[cyclone]

33 stocks already, if 3.3% allocation each, u would have achieve a balanced, diversified portfolio,

Maybe throw in the STI ETF to round it up..

Hi brattzz,

Thanks for the suggestion. I will consider it.

[cyclone]

Hi Cyclone,

I believe your calculations are wrong. When you distribute cash out, you are essentially cashing out some of your 30,000 shares in your fund. Meaning to say if at the point in time when you needed 4,000 dollars and your NAV per share is say 10, it means you have to liquidate 4000/10=400 shares. This way your NAV would not change as your share base would have decreased to mirror the fall in total NAV. Likewise, imagine I decide to add more capital into the fund. If I added 4,000, I cannot just say that my total NAV increased by 4,000 dollars without increasing my number of shares. Otherwise, this would just mean my performance would just spike up due to a capital injection, which isn't right.

Let me know if you need further clarifications

Hi heifien91,

Thanks for the explaination. Now I understand how to calculate NAV per share.

[cyclone]

STI started the year 2014 at 3167.43 and ended at 3365.15, a nice 6.24% gain, excluding dividends of about 3%+.

No activity in the month of December 2014. Just received some dividends from UMS Holdings and GP Industries. Hupsteel traded ex-dividend on 30 December 2014.

NAV per unit at the beginning of year 2014 was 1.297122 and ended at 1.272275 due to twice cash distributions to unit holders. If we assume the cash was left intact in the portofolio, NAV per unit would have gained 9.1%. Thanks Value Buddies for sharing the ideas.

As usual, fully invested, cash is minimal.

As at 31 December 2014, the portfolio consists of the following counters :
1. AZTECH GROUP
2. CFM HOLDINGS
3. CHUAN HUP HOLDINGS
4. CHINA MERCHANTS HOLDINGS (PACIFIC)
5. ELEC & ELTEK
6. ENVICTUS INTERNATIONAL HOLDINGS
7. FRASERS CENTREPOINT LIMITED
8. FRENCKEN GROUP
9. G.K. GOH
10.GLOBAL INVESTMENTS LIMITED
11.GP INDUSTRIES
12.HOTEL GRAND CENTRAL
13.HOTUNG INVESTMENT HOLDINGS
14.HUPSTEEL
15.IFS CAPITAL
16,KARIN TECHNOLOGY HLDGS
17.KEPPEL T&T
18.LOW KENG HUAT (SINGAPORE)
19.LUXKING GROUP HOLDINGS
20.METRO HOLDINGS
21.MICRO-MECHANICS (HOLDINGS)
22,NEW TOYO
23.PCI
24.PEC
25.SAN TEH
26.SIA ENGINEERING
27.SINGAPORE REINSURANCE CORPORATION
28.SINGAPORE SHIPPING CORP
29.SINGAPURA FINANCE
30.St****** CORPORATION
31.TAI SIN ELECTRIC
32.UMS HODINGS
33.WILLAS-ARRAY ELECTRONICS

[Jacmar]

Cyclone, you have way too many stocks in your portfolio. I have only half the number of yours! With so many stocks, you are as good as buying the mkt ie buy the STI ETF instead. Which are your 3 top conviction stocks and which are the 3 least conviction stocks? replace them and improve your portfolio performance and repeat the process till you struggle to do the same process, as that would be about the right number of stocks.

[BlueKelah]

Cyclone, you have way too many stocks in your portfolio. I have only half the number of yours! With so many stocks, you are as good as buying the mkt ie buy the STI ETF instead. Which are your 3 top conviction stocks and which are the 3 least conviction stocks? replace them and improve your portfolio performance and repeat the process till you struggle to do the same process, as that would be about the right number of stocks.

Haha was gonna say the same thing, but guess this is more of a diversified value index type portfolio...

Jacmar how many does your portfolio have?? Mine has about ten at the moment

-- via Xperia Z1 with tapatalk

[paullow]

Cyclone, you have way too many stocks in your portfolio. I have only half the number of yours! With so many stocks, you are as good as buying the mkt ie buy the STI ETF instead. Which are your 3 top conviction stocks and which are the 3 least conviction stocks? replace them and improve your portfolio performance and repeat the process till you struggle to do the same process, as that would be about the right number of stocks.

Haha was gonna say the same thing, but guess this is more of a diversified value index type portfolio...

Jacmar how many does your portfolio have?? Mine has about ten at the moment

-- via Xperia Z1 with tapatalk

Conviction is important. But if u ask me, one simple way is to give up those counters which don't pay consistent dividends, and focus on those which do.
This action itself will mitigate some downside risk of the portfolio and also help to improve existing cash flow which can in turn buy more dividend producing stocks.

[specuvestor]

Hi Cyclone,

I believe your calculations are wrong. When you distribute cash out, you are essentially cashing out some of your 30,000 shares in your fund. Meaning to say if at the point in time when you needed 4,000 dollars and your NAV per share is say 10, it means you have to liquidate 4000/10=400 shares. This way your NAV would not change as your share base would have decreased to mirror the fall in total NAV. Likewise, imagine I decide to add more capital into the fund. If I added 4,000, I cannot just say that my total NAV increased by 4,000 dollars without increasing my number of shares. Otherwise, this would just mean my performance would just spike up due to a capital injection, which isn't right.

Let me know if you need further clarifications

Hi heifien91,

Thanks for the explaination. Now I understand how to calculate NAV per share.

Cyclone your method is not wrong per se as units/funds can pay out dividends just as shares. But in that case you have to calculate TOTAL RETURN (ie in July you distributed 0.1333 per unit) when you compare against your beginning of year which can make it more complicated. Heifien suggestion will however end up with a lot of decimals and over time increase the price of your unit. Nonetheless this should be a cleaner and easier way to track your return over periods especially if u have a lot of inflows and outflows.

[yeokiwi]

Cyclone, you have way too many stocks in your portfolio. I have only half the number of yours! With so many stocks, you are as good as buying the mkt ie buy the STI ETF instead. Which are your 3 top conviction stocks and which are the 3 least conviction stocks? replace them and improve your portfolio performance and repeat the process till you struggle to do the same process, as that would be about the right number of stocks.

There are no banks, no telcos and not many property developers in the portfolio and so, this portfolio might not track STI closely.
The return of the portfolio is much more dependent on the purchase price of the stocks rather than the no. of stocks.
Some prefer to make black and white decisions but some may treat them as shades of grays. Those that are whiter will get higher allocation of fund while those less whiter ones will get less.
Those that are nearer to black should be avoided totally.

If the price is right, any good value stock is almost white.

[pianist]

Mine is 3 times more than cyclone, also no Telco no banks
Never impute the returns that way as no time.... won't say is a snow ball effect, prefer to make a ice kachang