Portfolio @ June 2018

June

Time flies, half of 2018 is over. As usual, its time for another portfolio update.

Current PortfolioPortfolio Value

Performance Indicators / Dividends

  • YTD Time weighted return: -2.20%
  • Dividends collected: $1,475.06
  • Upcoming Dividend Receipts:
    • Frasers Logistics & Industrial Trust: SGD 103.50
    • SingTel: SGD 652.70
    • Bank of America: USD 16.80
    • Visa: USD 11.76

Commentary

The battle between Bulls and Bears rage on

I was preparing my portfolio update with a slight tinge of fear as I felt June had not been great for me. To my pleasant surprise, my portfolio ended up approximately $200 month on month. Despite horrible losses in SingTel, Keppel Corp and Starhill Global REIT, it was made up for by gains in my tech stocks Amazon, Google and Spotify. This is illustrative of the fact that we always remember of our losers, not our winners, at least for me.

The current issues clouding the market include the global trade war (thanks Donald Trump), the flattening yield curve and to a temporary extent, the World Cup (don’t ask me why that is a thing). This resulted in a re-rating downwards of yield assets (creating the June Great Singapore Sale in REITs and dividend stocks) and a flight to US stocks with little Chinese exposure as seen by massive fund flows to the US and tech stocks.

Of the 3 issues, I personally fear the trade war the most and given the no-holds-barred way Donald Trump has been stirring the hornet’s nest, I decided to hold more cash now in anticipation for further downside in Singapore stocks. Chances to snag good dividend paying stocks and REITs on the cheap have emerged in June and if you are into income investing, this could be your chance to increase your portfolio yield.

June transactions

This has been a rather busy month on the transactions front due to the Great Singapore Stock Sale and my decision to hold more cash now.

  1. Sold Micron Technology for a small gain as my speculation thesis didn’t work out to the planned extent thanks to trade war fears.
  2. Sold half my Bank of America stake. Essentially, I took out most of my cost in Bank of America having returned 90+% since I bought the counter 2-3 years ago. Will leave the rest hanging in anticipation of further rate hikes.
  3. Sold Spotify and Amazon after the meteoric rise thanks to fund flows back to the US into these stocks. Too far, too fast for me and momentum was flagging for these 2 counters towards the end of the month. Given my need to raise cash, these were the ideal targets.
  4. Bought Frasers L&I trust as part of the preferential offering as mentioned previously and added more in the open market on slight weakness to round out my position to roughly $20k.
  5. Initiated a position in Yuexiu Transportation Infrastructure on weakness. Essentially, this is the toll road operator of the Guangdong government, with expressways pre-dominantly in the Pearl Delta region. Highly free cash flow generative (since its a toll road, literally), stable increasing dividend history and a proxy for China’s increasing logistics and domestic consumption. Key risks include government regulations and “Well, it’s China” risk.
  6. Added more Starhill Global REIT on weakness. Nothing much to say here, I just don’t think it is as bad as what the market is saying. With potential catalysts in 2H 2018 for it’s overseas properties and potential recovery in Singapore Grade A office rentals, I’m willing to add to my position at 7% yield.
  7. Initiated AIMS AMP Capital Industrial Trust. A steady Singapore industrial REIT that I’ve admired for some time. A REIT that did not tank despite the yield asset re-rating, goes to show investors’ confidence in the name. Yielding a trailing 7.4%, it felt like an appropriate time to initiate my position.

Second half of the year tends to be better in my short investment journey. Hopefully it plays out this year as well.

Happy Hunting,
KK

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