Portfolio Updates

Portfolio Update June 2023 – Another Month of Outperformance

Calvin Lo

June has been another good month for the portfolios, both of which outperformed the S&P 500 and Nasdaq 100. Looking at the 1-month S&P 500 heat map from Finviz, the outperformance might’ve come from Tesla (TSLA), Nvidia (NVDA) and Apple (AAPL) among portfolio holdings. Hope the party continues in July.

Markets seem to be brushing off the prospects of 2 more rate hikes, after an initial knee-jerk reaction. I think many now realise that the Fed pausing and reaching terminal interest rate level soon is probably bullish for stocks. Recessionary fears seem to have faded into the background for now. That said, the market might just be continuing to rally in absence of any bad news.

A lot of focus has been on how narrow the bull market has been so far, with the ‘Magnificent Seven’ stocks – Apple, Microsoft, Alphabet (Google), Amazon, Nvidia, Tesla, and Meta Platforms – accounting for the bulk of the S&P 500 YTD performance so far. That said, both portfolios are benefitting precisely because of these M7 rallying so hard (we hold 5 out of the 7). Likewise if they start to falter, both portfolios will suffer.

I’ve been buying more heavily in June for the Family Portfolio as we officially move into a bull market in the S&P 500. Although we might get a pullback in the short-term, I’m not one to go against the tide, especially with so much historical data showing that bull markets tend to outlast bear markets. Listen more on my thoughts on the bull market and why I’m buying in the video below.

On the fixed income front, SSB yields and T-bill yields seem have stabilised, at around ~2.8% and 3.8% respectively. In June, I applied and got $4k worth of T-bills, split between cash and CPF funds.

On the cash management front, fixed deposit rates continue to fall precipitously with most banks continuing to cut rates. I suspect that with attractive FD rates, banks might have too much deposits coming in, yet seeing softer loan growth so they’re unable to lend it all out. There was news of DBS having too much cash and having to park some with MAS recently, so that might be the reason banks are less interested in attracting more deposits.

In view of the bull market and strength of the US economy, I’m reducing my cash position and putting more money to work in the stock market.

See my thoughts on last month’s SSB issuance: Singapore Savings Bond (SSB) July 2023 – Yield Curve Normalising Slightly, Wait For Higher Yields

See also my Fixed Income Tracker and SSB tracker.

Last month, there was a new ETF introduced on SGX focusing on Southeast Asia + India Technology stocks. I reviewed it here: CSOP iEdge Southeast Asia+ TECH Index ETF (SGX:SQQ/SQU) Review

Last month, I continue to reflect on dividend investing and decided to share my thoughts on video below. I’m seeing more and more dividend stocks underperforming, partly also because tech is outperforming now. However, bottom-fishing stocks because of high dividend yield can be very risky. Holding onto weak performing stocks just because of its dividend is also a poor strategy. Focus on business fundamentals and long-term total returns (including reinvested dividends). Also, track overall portfolio performance including capital gains, instead of merely tracking dividends.

Read also: How Dividend Investing Can Potentially Wreck Your Portfolio

See my Portfolio page for more details on my portfolio value, holdings, and strategy.

Family Portfolio

  • Value as at end June: S$217K
  • June performance: +8.7% vs SPX +6.1% vs NDX +5.9%
  • YTD performance: +26.2% vs SPX +16.4% vs NDX +39.7%
  • All-time performance (since Aug 2016): +5.2% (+7.3% including dividends)
  • June dividends: S$408 (+54%)
  • Bought: VT, QQQ, ARKK, SGX:HST, LSE:VWRD, TLT, SGX:SRT
  • Sold: Astrea IV bonds (matured)
Family Portfolio as at 2 July 2023 (excludes Syfe portfolios and crypto)

May was pretty active, but in June I picked up the pace of buying further in view of the new bull market. Besides the usual RSP into VT, QQQ, ARKK and SGX:HST, II continue to manually DCA into LSE:VWRD. With no automatic RSP options for VWRD yet, I’ve stuck to VT and supplement with manual trades of VWRD. I’ve also added further to TLT (see my portfolio update last month for the rationale).

Read: VT vs VWRD – Vanguard World ETF Comparison

Read also: Automating Your Investments With FSMOne

The only other purchases I made were REIT funds, the CSOP iEdge S-REIT Leaders index ETF (SGX:SRT) and Syfe REIT+ portfolio. Both track the same index, the iEdge S-REIT Leaders index. S-REITs have been clobbered recently but staged a quick rebound, so I decided to put some money to work there.

Syfe managed portfolios is currently valued at $13.1k with total returns of +$19 (as at 3rd July 2023). No change to regular monthly contributions of $200 into each of the Core Equity100 and REIT+ portfolios, but I did pump an additional $4k into REIT+ last month.

I’ve yet to decide whether to start a position in Syfe Income+ or switch Core Equity100 to Core Growth, so that I can increase my exposure to bonds.

Read my reviews of Syfe Income+, Syfe REIT+, and Syfe Core Equity100.

No sales last month, just the Astrea IV bonds that matured (with 0.5% bonus, yay!). Only had the $2k from 5 years back, when we had much less to invest. Going forward, I don’t intend to buy any individual bonds since T-bills and SSBs are pretty attractive right now.

Personal Portfolio

  • Value as at end June: S$58.1K
  • June performance: +19.0%
  • YTD performance: +79.6%
  • All-time performance (since July 2020): +8.4%
  • Bought: TSLA
  • Sold: TSLA, PLTR
Personal Portfolio as at 2 July 2023

Tesla (TSLA) continues to rally strongly, up +22% in June, contributing to the bulk of the positive performance of this portfolio. Palantir (PLTR) has slowed down quite a bit, maybe reaching a consolidation phase, though still up a not too shabby +5.6% for the month.

Needless to say, this portfolio has been performing superbly this year, recovering all losses from last year and then some. Hopefully macro continues to be supportive for tech. Long term, I think both these stocks still have plenty of room to run. Short term however, they maybe prone to pullbacks given how drastic the upwards movements were.

I’m down on SQQQ position by more than -50%, but I’ve yet to cut any of it. I’m thinking that the risk of a correction in Big Tech is still pretty high, so unless we get that I’ll probably still hold onto these. Anyway, SQQQ has shrunk to only 4.4% of the portfolio. Also, recession risks have reduced but I don’t think we’re out of the woods just yet.

I continued to trim some PLTR, feeling that valuations are a tad too hot. As for TSLA, I’ve sold just whatever I had in Saxo with the intention to consolidate all my personal holdings into moomoo. With Telsa’s prospects improving, I might just have to buy back in at a higher price though.

Read my investment thesis on TSLA here.

How did your portfolio perform in June and what are your plans for July?

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Disclaimer: This is not financial advice. I am not professional financial advisor nor do I work in the finance industry. Anything I write here is purely my personal opinion. Please do your own research and due diligence before investing into anything. All investments come with associated risks. Best to consult a financial advisor if you’re still unsure.

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