1. This is the second year I am doing a Half Year report. 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 similar to last year at the same time. For 1H 2024, TWR & XIRR was 2.9% & 5.7% respectively. Once again, my portfolio diversification strategy prevented the fund from riding the US, HK and JP market recovery as the SG market tanked, especially the SG Reits which I have sunstantial holdings. SGX you really CMI.
3. The Value Fund performed poorly against all the three benchmark indexes of ES3(+5.3%), SPY(+18.1%%) and VT(+13.2%). I am even further from my long term personal goal of exceeding ES3 by at least 5ppt significantly. Sigh.
4. The absolute gain was +$69.6K consisting of a realised gain of +$74.2K but offset with unrealised losses of -$4.5K. My arbitrage trades for GEH (GO) and DBS (SPLIT) played out well.
5. In terms of capital injection, I added siginificantly to the portfolio with my dividends, option premiums, salary bonus, and leverage from wealth lending. Total capital injection into portfolio was +$183.2K for the year to date.
6. For 1H 2024, Total Stock Portfolio reached $2.43M for the reasons described above.
7. Against my 2024 Financial Goals Scoreboard :
a. Grow my Stock Portfolio Value to $2.5M. (On Track). I am currently $70K from the goal at the half year mark.
b. Raise dividends to $120K per annum. (On Track). This is slightly behind trajectory due to poorer SG Reit distributions but Jul dividend/SG Bank anoucements is expected to restore the cumulative trajectory.
c. Exceed or Maintain CAGR of 10%. (Off Track) Complete fail on this one as degobalisation is making markets and economies diverge in substantially different directions.
d. Top-up CPF Medisave on 1 Jan 2024. (Meet Target). Done. All Medisave contributions are accuring in the SA as it climbs to ERS limit.
e. Review and Refine Options & Risk Strategy to raise returns to USD3K(SGD4K) per month. (On Track) . I have collected SGD5K of monthly premiums to date.
8. For 2H 2023, I plan to continue my value based investment strategy (with leverage) 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 or suprise spike in inflation. In terms of volatility, the 2H 2024 is expected to have higher structural risk due to elections in US, UK, France (second leg of EU) and SG, and the reversal of globalisation and international trade as countries become more protectionist.
9. An additional note of caution to myself on future interest rates. Everyone is cheering that the Fed is expected to lower rate by 1-2 more times. The truth is that the Fed (Powell) still 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
