Monthly Report - July 2021

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July 2021 mainly saw two halves of my portfolio at odds with each other. The earning seasons in USA has brought a lot of my funds into the green - United ASEAN (+2.9%), United Global (+2.5%), Manulife REITS (+2.5%) & TA Global (+2.3%). However, all that was badly hampered due to the regulatory rampage by the Chinese government on local big tech players. Two of my Greater China heavy funds fell hard - Principal Greater China (-4.2%) and StashAway (-3.7%). It was a hard enough of a fall to keep my July 2021 portfolio gains humble at just +0.4%.

   The KLCI continued its dip down -2.5% this month due to the rising local COVID19 cases. Hence, the United ASEAN did well to end in a respectable +2.9% gain. It is a welcomed change as this fund has been quite the underperformer this year (compared my other funds). The combination of the new delta variant and relatively slow vaccination rate in this region has dampened recoveries compared to its peers in Greater China, Europe & USA.

   The TA Global (+2.3%) grew in tandem with its benchmark XLK ETF (+2.48%), slightly bogged down by its Chinese big tech holdings.

   Despite the Principal Greater China being the worst performer this month (-4.2%), I do have to commend it for being able to stay well ahead of the Hang Seng index which fell -9.9%.

   Savings was great again this month (RM2916) as the spike in local COVID19 cases has put a significant downer on my spending mood.

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%).

Analysis - StashAway Reoptimization (July 2021)

StashAway Malaysia has decided to conduct another round of portfolio re-optimization amidst the changing environment. You can read their original article here but to sum it up, they believe that while the U.S. indices are skyrocketing right now, it does seem that inflation in the U.S. is starting to speed up from its current figure of 5.4% p.a. in June 2021.

   To paraphrase a page from the "Intelligent Investor by Benjamin Graham", when inflation shot above 6%, stocks stank. The stock market lost money in 8 of the 14 years in which inflation exceeded 6%; the average real return for those 14 years was a measly 2.6%. While mild inflation allows companies to pass the increased costs of their own raw materials on to customers, high inflation wreaks havoc - forcing customers to slash their purchases and depressing activity throughout the economy.

   So StashAway Malaysia has decided to re-optimise the aggressive 36% portfolio as follows:

• Consumer Staples (XLP), Energy (XLE), REITS (VNQ & VNQI), Precious Metals (GLD) & US High Grade Bonds (AGG): These stock types have historically proven to perform very well (vs the stock market) in times of high inflation. You will notice they are commodity or 'basic necessity' type of stocks.
• Australia (EWA): What better way to capture commodity returns than investing in a commodity-exporting country?
• Small Cap (IJR): This is more to do with capturing the momentum rather than the inflation returns. Value stocks have been in the shadows of growth stocks for a few years. Now that value stock is back in the spotlight again, they foresee this to trend for quite a while to make up for lost times (vs growth stocks).
• China Tech (KWEB): This is more to do with capturing the potential rather than the inflation returns. With a population of 1.4 billion, rapidly growing economy and laser focus on becoming a technology superpower, it only makes sense to keep invested in this ETF.

As for my opinion, I don't actually have one. I mean, I am pretty glad that they did not give up on KWEB despite their horrible run in year 2021. KWEB is a high risk, high reward ETF which I don't mind holding on for a while. As for the overall strategy, it does makes sense but only if their prediction that the inflation will continue to rise to uncontrollable levels comes true.

Monthly Report - June 2021

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June 2021 is another win for my portfolio! This month saw an overall +1.2% gains as US investors remain optimistic on the economic rebound due to a majority of the citizens have already been vaccinated. Investors are pilling into recovery stocks such as energy, industries & airlines. The further dip in treasury yield which prompted investors to return to tech stocks as TA Global Tech was up +5.1%. My Company Stock (Industrials in Europe) also enjoyed a +3.4% gains. Other modest gainers this month include the United Global (+1.3%) and Manulife REIT (+1.2%).

   That said, the winning funds actually underperformed their benchmarks. While the performance of TA Global Tech (+5.1%) was commendable, it failed to beat the XLK ETF which was up +7.2%. Even United Global (+1.3%) failed to beat the S&P 500 (+2.2%).

   My portfolio was slightly dragged down by the Asian related stocks this month. The United ASEAN (-2.7%) led the dip but luckily it did not go as low as the KLSE (-3.2%) which was badly impacted by the extension of the lockdown in Malaysia. While StashAway (-0.2%) and Principal Greater China (-0.1%) dipped, it was still not bad compared to the Hang Seng Index which dipped -1.1% due to resurgence of COVID19 in the country.

   Savings was up this month (RM3295) mainly due to the resurgence of COVID. We went out a lot less and we also had to suspend my child's trip to daycare.

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%).

Monthly Report - May 2021

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My portfolio survived May 2021 and even saw an overall +0.8% gains despite suffering from a massive sell-off in the middle of the month due to growing inflation fears. The Fed was quick to calm down inflation fears and the global market recovered accordingly. As a result, the S&P500 ended up +0.5% in the month. The Hang Seng was the main driver this month as the index ended up +1.5% mainly due to optimism on recovery from the pandemic. The KLCI however, struggled to keep up as ended down -1.1% due to the nation's struggle with the third wave of the pandemic.

   Principal Greater China (+3.2%) did very well versus the Hang Seng (+1.5%) which I believe is mainly due to the overperformance of the recovery stocks in the fund (industrial & manufacturing). Big tech definitely did not help much as they mostly ended flat versus the start of the month. Also following suit is heavily China/HK weighted StashAway (+1.1%). Sure the SPEM, AAXJ, IJR helped to buoy the fund but the main driver was actually the GLD (+7%)! Materials have been making a big comeback this month, however, it does not show much in portfolio because I barely hold any.

   My Company Stock (Industrials in Europe) continued its surge and ended at +1.9% this month. It fits the narrative that investors are continuously flocking to Industrial stocks. On top of that, the company also gave a ~2% dividend this month.

   United Global (+0.2%) expectedly continues to disappoint vs the S&P500 index (+0.5%) as the fund holds quite a bit of big tech stocks which underperformed this month. TA Global Tech was a testament to that fact as it ended -0.9% for the month. Note that XLK also fell -1.4% this month.

   United ASEAN expectedly fell -0.2% in line with the underperformance of the KLCI (-1.1%) and the ASEAN markets due to the resurgence of COVID cases in the region.

   Savings was up this month (RM2529) mainly due to the resurgence of COVID. We went out a lot less and we also had to suspend my child's trip to daycare.

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%).

Monthly Report - April 2021

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April 2021 saw ALL my funds having a positive month on month growth. The main driver was the growth of the S&P500 (+5.2%) attributed to stabilizing bond yields and optimism for a swift economic rebound. Tracking the S&P500, the Hang Seng (+1.2%) also managed to eek out a bit of gains despite being bogged down by China's clampdown on big tech. The local KLCI also gained +1.8% buoyed by renewed interest in glove counters due to rising COVID cases (India!).

   Big tech in general got a good boost this month after a pullback last month. The TA Global Tech was up +4.2% but did not do as well as XLK which was up +5.2%. The issue here is that TA Global has quite a bit of holdings in China big tech and they have been bogged down lately by China's regulatory clampdown.

   The Principal Greater China (+2.5%) did well to beat the Hang Seng (+1.2%) this month due to its larger weight in tech. StashAway's performance was as one would expect (+2.4%) which puts it right between the S&P500 (+5.2%) and Hang Seng (+1.2%).

   Investors can be seen flocking back into property & industrials from the rise of the Manulife REIT (+1.6%) and my Company Stock (Industrials in Europe +1.8%).

   United ASEAN was the weakest performer this month (+0.0%) and I do expect to see this trend continue on for a while as this fund has done exceptionally well in the past few months. It was definitely due for a bit of a pullback.

   The AmBond finally ended its 2-month slide by gaining +0.9% this month as the global bond yield stabilizes. That said it is still down overall by RM1,000 which is quite horrible considering that this is where I decided to park my emergency fund.

   I did not save much (RM900) as I had a few one-time expense to take care of this month; namely kid's daycare registration / deposit & car insurance renewal. My food expense is also a little on the high side this month as I was guilty of some 'revenge spending' at some nice restaurants.

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%).

Monthly Report - March 2021

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March 2021 was an overall poor month in terms of fund performance versus the major indices. Sure the Hang Seng (-2.1%) and KLCI (-0.3%) were in the red this month due to (1) the Asian investors selling off fearing that the stocks in this region are overvalued and (2) increase in COVID19 cases casting doubt of economic recovery. However, the S&P 500 did very well, going up +4.2% attributed mainly to the passing of the USD1.9t stimulus bill and improving US economic data. Despite that, my overall portfolio only went up by +0.6% this month signaling that my funds may be holding a bit too much growth stocks.

   My company stock (Europe based industrial) led the charge by gaining 11% in a month as sentiments of economic (and industrial) recovery strengthens. In second place, the Manulife APAC REIT gained a respectable +4.8%. The rise in these funds proves that the there is indeed a sector rotation going on from growth to value stocks.

   The United Global (+0.4%) did poorly compared to its benchmark S&P 500 (+4.2%). This could due to the fact that United Global held comparatively more growth stocks than the S&P 500. Hence, unlike the S&P500, the United Global was not able to greatly benefit from the sector rotation.

   I was pleasantly surprised to see TA Global Tech (2.0%) faring slightly better than the XLK (+1.6%). I thought the China tech holdings in TA Global Tech was going to greatly drag the entire fund down but looks like it held up just fine.

   Of course, we have to talk about the downers. The Hang Seng (-2.1%) had a lot going against it this month. From the sell-off due to overheated stocks to the increase in COVID19 cases and of course, the tightening rules by USA that affected some China-based big tech companies listed in USA. Principal Greater China (-3.3%) fell a bit more than the HSI as it held a greater percentage of tech stocks which were the worst affected by the sell-off. Although StashAway had more weight in the Asian stocks, it still ended up +0.3%. The US ETFs did well to keep the fund afloat.

   The United ASEAN (-2.9%) did not do so well this month compared to the KLCI (-0.3%) but I don't mind it since it has been doing very well for the past few months. A bit of correction is always healthy.

   The AmBond continued its dip this month by another -2.4%. For a bond fund, that is quite a severe drop. Bonds are still continued to be sold (causing rising yields) as investors seem to be optimistic about the economic recovery. Funds are being transferred from bond funds to value stocks. I may be starting to question my decision to park all my emergency cash here but I'm going to keep at it for a few months to see how it goes.

   I got about RM2,800 from my tax return hence I had a bit more saved up this month (RM 5,861). Yay!

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%).

Monthly Report - February 2021

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February 2021 was literally a rollercoaster for the global market. It went through a steep rally up due to the global vaccine rollout and general optimism for a swift global recovery. At the middle of the month, the markets went through an equally steep decline all the way to the end of month due to a large spike of the US 10 yr treasury yield that got investors worried about inflation in a time of a pandemic. That said, I cannot complain because my funds ended in slightly above positive territory (+0.3%) despite the volatility.

   The United ASEAN fund led the rally at +3.3% as investors are getting out of growth (tech) stocks and into value (property, energy, telco, etc) stocks. All of which this fund are invested in. This rotation is said to be due to the rising bond yields. It is getting more expensive to borrow money so growth stocks (that depend on borrowing money) gets affected. Investor then prefer to be invested in value stocks that do not borrow cash as much.

   The United Global did ok (+2.3%) though it did not fair as well as the S&P 500 (+2.6%) in the month of Feb-21. It could be due to United Global holding a bit more growth than value stocks hence is affected by the rotational play as described above.

   The TA Global Tech (+2.2%) did end up higher than expected despite the rotational play. It even did better than the XLK ETF (+1.37%). Upon closer look, we see that the TA Global Tech actually holds quite a bit of value stocks (semiconductors, IT services, hardware, etc) in its portfolio than XLK ETF. So the rotational play benefited TA Global Tech more.

   Performance of the Principal Greater China (0.0%) and StashAway (+1.4%) were disappointing if we compare them to the Hang Seng Index (+2.5%). This could be due to the funds holding a bit more growth stocks in their portfolio as compared to Hang Seng which has a good spread of growth and value stocks.

   My company stock (Europe based industrial) was the biggest loser this month (-8.0%). It is hard to put a finger on this huge decline. This company is far from popular tech names so there is very few articles or write ups on its stock rise & fall. We will just have to take it that it had a bad month.

   The rise in US Treasury yield is a result of oversold bonds. We can see this also takes effect in the local level as AmBond also dipped -0.9%. I have also reallocated about RM2k from my bond fund into my bank account. I had to urgently withdraw some cash for work expenses this month and realised that I may have set my liquid emergency cash a bit too low. So I decided to up my bank holdings from RM3k to RM5k. Live and learn.

   This was the month I contributed a lump sum of RM3,000 into my PRS fund for the year 2021 to take advantage of the tax benefits. That is why my savings was not much (RM554 only) despite receiving my bonus this month as well.

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%).