Comments:
The month of Oct-2020 was initially looking like it was going to end in the green. However, the market came crashing down in the final week of the month mainly due to resurging COVID19 cases and uncertainties among investors due to the upcoming US elections in November 3rd. My overall fund return rate for the month of Oct-2020 stands at -1.0%, further falling from the August highs.
My Company Stock (Industrials based in Europe) suffered the largest drop of -7.6% and it has little to do with the company performance. The EuroStoxx 50 dropping -6% over the month shows that investors are aggressively pulling out of European stocks due to the huge spike of COVID19 cases in the region.
Manulife APAC REIT also got destroyed over the month of Oct-2020 by -6.9% as investors get jittery about the rise of global COVID19 cases. The two countries where this REIT stock heavily invests in (Singapore & HK) have seen almost no increase in COVID19 cases this month. However, investors may be looking at the impact of the rising global COVID19 cases to both these countries that rely heavily on international trade.
United Global which primarily invests in USA saw a dip of -3.1% which is very close to the S&P 500 October dip of -2.8%. I'd say the main catalyst for this drop is the lack of fiscal stimulus and the uncertainties of the upcoming US elections. While US has also saw a rise in COVID19 cases, its percentage rise is not as great as Europe. That and I don't think COVID19 cases does a lot anymore to affect investors in the states.
TA Global Tech drop of only -1.7% is quite welcomed if we compare it to the XLK ETF which dropped -5.0% over the month of October. I commend the fund for doing well to minimize downside loss. It is the same case for United ASEAN which went up by 0.7% but the KLCI index dipped by -2.0%. Great performance by both these funds despite their mooted gains/losses.
By far the biggest winner for the month of Oct-2020 is Principal Greater China with a 5.0% gain. The fund did exceptionally well compared to its benchmark (Hang Seng Index gained 2.8% only). The gain is mainly due to the speedy economic recovery in the Greater China region as they have properly gotten the COVID19 situation under control. China has been reporting only double digit daily new cases and they are all imported. In fact, the larger weightage in Asian stocks compared to the US helped the StashAway portfolio to stay afloat with a modest 1.4% increase.
Forward Strategy:
I will continue to Value Cost Average (VCA) into my funds, keeping them at a fixed weightage 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%).