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
