The Value Fund Portfolio Report FY 2023

1.  The year 2023 was slightly better than 2022 but I still failed miserably by my benchmarks. My TWR for 2023 was only 4.9% despite my best efforts. My valuefund portfolio diversification strategy reversed on me with large losses experienced for HK and SG portfolios. Complete disaster was only averted by the outstanding performance of my (smaller) US portfolio and a last minute (window-dressing) rally in SG. I suppose I should still feel thankful that I eked out a small positive gain but the capital losses in HK and SG still hurt.

2. My 2023 TWR & XIRR was 4.9% & 5.0% respectively. Ironically,  my portfolio diversification strategy prevented the [valuefund portfolio from riding the SP500 and Nasdaq bull for 2023. In the meantime, the schizophrenic China/Hong Kong markets and the interest rate pressures impacted my HK shares and SG Reits. SG Banks on the otherhand did reasonably well especially in terms of dividends.

3. The Value Fund performed poorly against the three benchmark indexes. It only did marginally better than than ES3 (+3.4%) but worse than SPY(+24.1%) and VT(+19.6%). I significantly missed my long term personal goal of exceeding ES3 by at least 5ppt .

4. The absolute gain was +$79.8K consisting of a realised gain of +$170.9K but offset with unrealised losses of -$91.1K. No thanks to the China/Hong Kong markets and SG Reits. In 2023, I entered the JP market for the first time.

5. In terms of capital injection, I continued to add siginificantly to the portfolio with my dividends, and leverage from wealth lending. I collected $90.4K dividends in 2023 based on pay date. Thus, total capital injection into portfolio was $352.4K for the year.

6. In summary for 2023, Total Stock Portfolio Value reached $2.18M for the reasons described above. 

7. Against my 2023 Financial Goals Scoreboard :

a. Achieve a Total Stock Portfolio Value of $1.85M - (Meet Target). Total Stock Portfolio exceeded my annual target with continuous dividend and capital injections in SG, HK, JP and US markets tp $2.18M. 

b. Raise dividends to $85K per annum.(Meet Target). Increased investments in SG & HK Banks and REITs lifted dividends. In 2023, I collected $91K which was a new high. My dividend snowball is building up! 

c. Maintain or exceed CAGR of 10%. (Hopelessly Fail Target).  I failed miserably with a +4.9% gain this year. Long term CAGR declined to 8.3%. Need to work harder for 2024.

d. Top-up Medisave on 1 Jan 2023 (Meet Target). I topped up my Medisave on 1 Jan 2023 and working towards hitting ERS limit in SA. Based on current trajectory, I should be able to reach ERS in 3 years at this compounding trajectory

e. Review and Refine Options & Risk Strategy to raise returns to USD2K per month (Meet Target). My total proceeds for Options & Risk Strategy has reached $33.4K which exceeded the annual target. 

8. For 2024, I plan to continue to execute my value based investment strategy (with wealth lending leverage) and supplement it with a options strategy. Meanwhile there is a need to manage the risks from leverage and options in the event of a recession and/or a further unexpected spike of interest rates. 

9. I am slowly getting the hang of using options to produce regular income by collecting premiums while balancing the risk exposure. My options have been exercised by buyers in some cases while I rolled some out into the future. At the moment, these proceeds are not added to the portfolio but used to cover expenses. I will continue to refine my risk management strategy in 2024 and plan to include options income as part of capital injections in 2025.

10. An additional note of caution to myself on future interest rates. Currently, everyone is cheering  that the Fed has paused and/or will lower interest rates from this point on. The truth is that the Fed (Powell) doesn't know and in fact "Nobody Knows!". 

11. Going forward into 2024, my increased investment goals are:

a. Grow my Stock Portfolio Value to $2.5M.

b. Raise dividends to $120K per annum. 

c. Exceed or Maintain CAGR of 10%. 

d. Top-up CPF Medisave on 1 Jan 2024. (Exceeded FRS and working towards ERS in SA)

e. Review and Refine Options & Risk Strategy to raise returns to SGD3K per month.

12. My current portfolio can be found at https://stocks.cafe/user/profile?username=thevaluefund

The Value Fund Portfolio Report 1H 2023

1. This is the first year I am doing a Half Year report. Previously, I was too lazy and only did annual reports. As the fund size and importance grows, i feel there is a need to be reflective and more changes to strategy if necessary.

2. The Value Fund had a muted performance. 1H 2023 TWR & XIRR was 3.1% & 6.1% respectly. Ironically,  my portfolio diversification strategy prevented the fund from riding the SP500 and Nasdaq recovery for 1H 2023. In the meantime, the doldrums of the China/Hong Kong markets and the interest rate pressures impacted my SG Reits. SG Banks on the otherhand did reasonably well in terms of dividends.

3. The Value Fund performed poorly against the three benchmark indexes. It only did marginally better than than ES3 (+1%) but worse than SPY(+17.5%) and VT(+14.3%). I missed my long term personal goal of exceeding ES3 by at least 5ppt significantly. Again.

4. The absolute gain was +$54.7K consisting of a realised gain of +$72.8K but offset with unrealised losses of -$18.1K 

5. In terms of capital injection, I had added siginificantly to the portfolio with my dividends, and leverage from wealth lending. Total capital injection into portfolio was $86K for the year to date.

6. For 1H 2023, Total Stock Portfolio reached $1.81M for the reasons described above. 

7. Against my 2023 Financial Goals Scoreboard :

a. Stretch target to reach Total AUM of $1.85M - (On Track). Total Stock Portfolio is on track to reach annual target with dividend and capital injections in SG, HK and US markets. 

b. Raise dividends to $85K per annum.(On Track). Increased investments in SG & HK Banks and REITs lifted dividends. It is currently $44.9K and projected to meet annual target. 

c. Maintain or exceed CAGR of 10%. (Off Track).  I failed miserably with a +3.1% gain. Need to work (or pray) harder for 2H.

d. Top-up Medisave on 1 Jan 2023 (Meet Target). I topped up my Medisave on 1 Jan 2023 and working towards ERS in SA. Based on current trajectory, I should be able to reach ERS in 3 years at this rate.

e. Review and Refine Options & Risk Strategy to raise returns to USD2K per month (Meet Target). My total proceeds for Options & Risk Strategy has reached $26K which exceeded the annual target. More proceeds are expected for rest of year.

8. For 2H 2023, I plan to continue to execute my value based investment strategy (with leverage) and supplemented with a basic options strategy. Meanwhile there is a need to manage the risks from leverage and options in the event of a recession and/or a further spike of interest rates.

9. An additional note of caution to myself on future interest rates. Everyone is cheering  that the Fed has pause and/or will hike 1-2 more times. The truth is that the Fed (Powell) doesn't know and in fact nobody knows. Based on most liquidity indicators and structural inflation trends, there is more than 50% chance it will take an interest rate of at least 6-8% by Fed/ECB to bring inflation down  to 2% target. 

10. My current portfolio can be found at https://stocks.cafe/user/profile?username=thevaluefund

The Value Fund Portfolio Report 2022

 1. The year 2022 was worse than 2021. My TWR for 2022 was -6.5% despite my best efforts. My portfolio diversification strategy mitigated the very large losses experienced in the HK and US markets. In general. I did better than most my fellow singapore investors on stockscafe, investingnote and youtube. I suppose I should feel thankful but losses still hurt especially in absolute amounts.  

2. The Value Fund had a mixed performance against the three benchmark indexes. It did worse than ES3 (+7.6%) but beat SPY(-19.1%) and VT(-19.0%). I missed my personal goal of exceeding ES3 by at least 5ppt significantly. :(

3. With a TWR of -6.5%, the absolute loss was -$104K. This was partially cushioned by a dividend haul of $63.4K.

4. In terms of capital injection, I had added siginificantly to the portfolio with my dividends, inheritance windfall(sad) and leverage from wealth lending. Total capital injection into portfolio was $442K for the year.

5. Going forward, I will switch from Total AUM (incl cash holdings) to Total Stock Portfolio (stocks only). This is due to the distortion from inheritance windfall and leverage while my cash cash/SSB/T-bill holdings exceed my leverage by multiple times. For 2022, Total Stock Portfolio reached $1.72M for the reasons described above. 

6. Against my 2021 Financial Goals Scoreboard :

a. Stretch target to reach Total AUM of $1.75M - (Failed). Total Stock Portfolio did not reach target due mainly to severe declines in US and HK markets.

 b. Maintain or exceed CAGR of 10%. (Failed). Some of my SG stocks recovered from the pandemic but this was more than offset by the declines in REITs & key stocks as global interest rates spiked. As the US and HK markets tanked, I failed miserably with a -6.5%. :(

c. Raise dividends to $60K p.a. (Success). Increased investments in SG & HK Banks and REITs lifted dividends significantly to $63.4K.

 d. Create Wealth Lending Account for shares to use leverage and abitrage between investment classes. (Success). I finally got off my lazy bum and also found a good relationship manager that helped educate and setup my wealth lending accounts. By transferring my core SG stocks to bank custody AND connecting it to foreign currencies, I could lever up my portfolio by arbitraging the interest rates across countries. Specifically, I borrowed in JPY(or CHF) with low interest rates, and bought good quality SG company shares. This should boost dividends and returns in the coming years but I have to watch central banks like a hawk.

7. Separately, I continued to practise an Option Strategy to earn kopi money every month by selling Covered Calls and Cash Covered Puts. I got assigned and unassigned a few times but only thrice which was reluctantly. Puts are a good way to accumulate shares for value investors while earning kopi money. However, I can only do this off and on as I trade options only in the US markets (most liquid). Averaged earnings was about USD1K per month.

8. For 2023, I plan to continue to practise my core value based investment strategy (with some leverage) but supplemented with a basic options strategy.

9. Going forward into 2023, my investment goals are:

a. Grow my Stock Portfolio to $1.85M.

b. Raise dividends to $85K per annum. (My 12mth projection is already at 80K and most my buys in 2022 paying out in 2023)

c. Maintain or exceed CAGR of 10%. 

d. Top-up Medisave on 1 Jan 2023. (Exceeded FRS in SA and working towards ERS)

e. Review and Refine Options & Risk Strategy to raise returns to USD2K per month.

10. My current portfolio can be found at https://stocks.cafe/user/profile?username=thevaluefund