Comments:
As I have (unfortunately) predicted, Sep-2020 was a month of pullback for the global market. It was inevitable after enjoying 5 months of non stop growth. My overall fund return rate for the month of September 2020 stands at -3.2%, essentially reversing all gains made in August 2020.
The United ASEAN led the pullback at -6.7% most likely because small & mid cap companies tend to over-react to market movements, especially to down trends.
I am quite happy that the Principal Greater China only retracted by -2.4% considering that the Hang Seng fell by -6.9% and the Shanghai Composite dropped by -5.5% in the month of September. In fact, this fund also beat my China-heavy StashAway fund which dropped -4.9%. The drop in Greater China stocks were mainly attributed to the deteriorating US-China relations with US imposing restrictions and bans on SMIC, TikTok & WeChat.
United Global dropped by -3.3% which actually beats the benchmark of the S&P 500 index that dropped -3.9% in September. Aside from the overdue correction, the drop in the S&P 500 was mainly due to the lack of financial stimulus by the US government.
Although Manulife REIT is still my overall worst performing fund, it only dropped by -0.6% this month. APAC REIT was never a popular stock with investors during this COVID19 season so there was never an issue of overbuying in the last 5 months. Hence, this fund never needed much correction.
My company stock suffered a hefty pull back this month (-4.7%). Half of it is actually due to the weakened EUR against the MYR.
I made a bold move by transferring my 6 month emergency fund (RM45k) from the RHB Cash (money market fund) to AmBond (bond fund). I have been contemplating this for a while and decided to just take the jump this month. With the constant OPR cut, money market funds in Malaysia are only returning 1.9%, barely enough to keep up with inflation. My cash kept in money market funds is actually depreciating in purchasing power! So I decided to take a bit of risk by placing my emergency fund in bond funds which has historically made about 4% - 5% p.a.
Forward Strategy:
I will continue to Value Cost Average (VCA) into my funds, keeping them at a fixed weightage (instead of a fixed monthly contribution amount). The revised weightage I have gone with is as follows; United Global Equity (20.0%), StashAway (20.0%), TA Global Tech (20.0%), Principal Greater China (15.0%), United ASEAN (12.5%) and Manulife REITS (12.5%).