December saw my net worth increase by 1%, mainly a result of gains in equities, pension funds, and foreign exchange movements during the month.
The value of my investment portfolio increased by around 1% with sharp falls in early December more than offset by increases towards the end of the month. There were also a number of larger dividends earned during the month and a large capital gain was realised. I've done a separate post summarising December's purchases & sales.
I updated the fx rates used to assess net worth, following a sustained strengthening of HKD/USD against GBP.
My pension fund unit values also increased around 1% despite weakness in early December
Property rental income was paid in full & on time.
Cash balances were higher, with investment sales exceeding purchases. Savings were also reasonable, despite some travel & Christmas related expenses.
Year to date net worth growth: 28%
Year to date savings rate: 64%
I'll follow this with a 2014 full year review post, and a separate look ahead to 2015.
Tuesday, 30 December 2014
December 2014 Investment update
During December i made a few purchases and one notable sale.
Purchases:
Continuing my recent trend of adding to existing ETF positions, i purchased additional units of IAPD.L (Asia Pacific high dividend) and VUKE.L (UK FTSE100 tracker).
The increase in IAPD was mainly to keep balance to the overall geographical mix of my portfolio, following a number of recent purchases of UK, Europe & Emerging Markets. The VUKE purchase was a little more opportunistic, following a fairly sharp fall in the UK index during early December. Both have been delivering solid reliable dividends over 4%.
The unit prices for these purchases were around GBP19.38 for IAPD, and GBP27.84 for VUKE.
Sales:
During the month i sold my entire holding of the 3049.HK (the CSI300 China index tracker). Following a very sharp rise in China equities over the last couple of months, i decided to carry out a long overdue rebalancing to reduce my overall exposure to China / RMB.
I currently have a reasonable holding of the HK Index tracker, along with a large amount of China government bonds. In addition, my HK pension fund is heavily weighted towards HK equities, which in turn are made up of both a large amount of China H shares, and companies heavily dependant on the China economy.
In selling my direct exposure to China equities, it reduces my the proportion of my investment portfolio allocated to HK / China to around 25%, making the overall portfolio roughly 50% USA, UK & Developed Europe, 25% HK & China, and 25% other Asia Pacific & emerging markets.
I sold for around HKD7.08 per share, realising around a 33% capital gain, most of which arose over the last couple of months.
Purchases:
Continuing my recent trend of adding to existing ETF positions, i purchased additional units of IAPD.L (Asia Pacific high dividend) and VUKE.L (UK FTSE100 tracker).
The increase in IAPD was mainly to keep balance to the overall geographical mix of my portfolio, following a number of recent purchases of UK, Europe & Emerging Markets. The VUKE purchase was a little more opportunistic, following a fairly sharp fall in the UK index during early December. Both have been delivering solid reliable dividends over 4%.
The unit prices for these purchases were around GBP19.38 for IAPD, and GBP27.84 for VUKE.
Sales:
During the month i sold my entire holding of the 3049.HK (the CSI300 China index tracker). Following a very sharp rise in China equities over the last couple of months, i decided to carry out a long overdue rebalancing to reduce my overall exposure to China / RMB.
I currently have a reasonable holding of the HK Index tracker, along with a large amount of China government bonds. In addition, my HK pension fund is heavily weighted towards HK equities, which in turn are made up of both a large amount of China H shares, and companies heavily dependant on the China economy.
In selling my direct exposure to China equities, it reduces my the proportion of my investment portfolio allocated to HK / China to around 25%, making the overall portfolio roughly 50% USA, UK & Developed Europe, 25% HK & China, and 25% other Asia Pacific & emerging markets.
I sold for around HKD7.08 per share, realising around a 33% capital gain, most of which arose over the last couple of months.
Monday, 1 December 2014
November 2014 Review
November saw my net worth increase by 1.6%, mainly a result of gains in equities and pension values during the month.
The value of my investment portfolio increased by around 3% with noticeable increases in China, along with recoveries in the UK & Europe indices. I added to my emerging markets exposure which is looking relatively cheaper at present.
My pension fund unit values also increased around 3% following a stronger month in equities markets.
Property rental income was paid in full & on time.
Cash balances were higher, with a good savings rate (despite planned travel) and lower underlying expenses more than offsetting the month's investment.
Year to date net worth growth: 27%
Year to date savings rate: 65%
The value of my investment portfolio increased by around 3% with noticeable increases in China, along with recoveries in the UK & Europe indices. I added to my emerging markets exposure which is looking relatively cheaper at present.
My pension fund unit values also increased around 3% following a stronger month in equities markets.
Property rental income was paid in full & on time.
Cash balances were higher, with a good savings rate (despite planned travel) and lower underlying expenses more than offsetting the month's investment.
Year to date net worth growth: 27%
Year to date savings rate: 65%
SEDY.L Purchased
Following my recent trend of re-investing in existing portfolio components, i added to my holding of the iShares emerging markets high dividend ETF earlier in November.
This ETF has been struggling with falls in some emerging markets along with adverse fx movements impacting some of the components. That being said, it has continued to be a solid dividend payer, consistently yielding well over 4%.
I'm trying to avoid adding new ETFs to my portfolio at present as it is already quite large and well diversified, so instead i'm looking to re-invest to (a) maintain a reasonably well balanced portfolio in terms of geographical / industry mix; but also (b) to opportunistically take advantage of market pull backs as buying opportunities, as was the case last month with investments in UK & Europe ETFs.
The unit price for this purchase was around GBP15.45, making it the cheapest tranche of this holding to date.
This ETF has been struggling with falls in some emerging markets along with adverse fx movements impacting some of the components. That being said, it has continued to be a solid dividend payer, consistently yielding well over 4%.
I'm trying to avoid adding new ETFs to my portfolio at present as it is already quite large and well diversified, so instead i'm looking to re-invest to (a) maintain a reasonably well balanced portfolio in terms of geographical / industry mix; but also (b) to opportunistically take advantage of market pull backs as buying opportunities, as was the case last month with investments in UK & Europe ETFs.
The unit price for this purchase was around GBP15.45, making it the cheapest tranche of this holding to date.
Thursday, 30 October 2014
October 2014 Review
October saw my net worth increase by 3%, with gains in property, equities & savings partly offset by lower pension unit values. There were also favourable fx movements in the month resulting in an update to my conversion rates.
The value of my investment portfolio increased by around 1.6% with steep falls in the beginning of the month more than offset by a stronger second half of the month & favourable fx movements. I added to my UK & Europe positions following market falls.
My pension fund unit values fell slightly, mainly from UK & HK equities exposure.
Property rental income was paid in full & on time. I increased the recorded value of my property by 5% following consistently increasing local valuations.
Cash balances were flat, with larger than average investments using up most of my savings in the month. Costs were better than average, excluding some planned travel.
Year to date net worth growth: 25%
Year to date savings rate: 65%
The value of my investment portfolio increased by around 1.6% with steep falls in the beginning of the month more than offset by a stronger second half of the month & favourable fx movements. I added to my UK & Europe positions following market falls.
My pension fund unit values fell slightly, mainly from UK & HK equities exposure.
Property rental income was paid in full & on time. I increased the recorded value of my property by 5% following consistently increasing local valuations.
Cash balances were flat, with larger than average investments using up most of my savings in the month. Costs were better than average, excluding some planned travel.
Year to date net worth growth: 25%
Year to date savings rate: 65%
VUKE.L & IDVY.L Purchased
Earlier in the month i looked to take advantage of some fairly steep falls in european equities markets with a couple of new purchases.
Firstly i added to my existing holding of the Eurozone high dividend ETF (IDVY) at around GBP13.88 a unit. There has been a lot of negative sentiment about eurozone growth (or lack of) but the sharp fall in equities markets looked on the face of it to be a bit of an over-reaction, or technical correction - there wasn't anything out there we didn't know already. To me this represented a good buying opportunity of a well diversified dividend payer.
In addition i increased my UK equities exposure, but instead of adding to my existing UK high dividend ETF (IUKD) i instead opted for the much lower cost Vanguard FTSE100 tracker. With costs of only 9bps compared to 40bps on the iShares high dividend ETF, i figured the cheaper cost would offset a lot of the dividend premium, whilst offering additional diversification against a wider basket of shares. As an index, the FTSE100 is a relatively high dividend payer anyway, so well see how it goes. The unit cost was around GBP28.7.
Incidentally i was tempted to buy the Vanguard europe index tracker (VERX) for similar reasons, but having only just been launched it didn't yet appear to be actively traded on my online broker platform, hence sticking with IDVY. This may instead be one to watch for the future.
Firstly i added to my existing holding of the Eurozone high dividend ETF (IDVY) at around GBP13.88 a unit. There has been a lot of negative sentiment about eurozone growth (or lack of) but the sharp fall in equities markets looked on the face of it to be a bit of an over-reaction, or technical correction - there wasn't anything out there we didn't know already. To me this represented a good buying opportunity of a well diversified dividend payer.
In addition i increased my UK equities exposure, but instead of adding to my existing UK high dividend ETF (IUKD) i instead opted for the much lower cost Vanguard FTSE100 tracker. With costs of only 9bps compared to 40bps on the iShares high dividend ETF, i figured the cheaper cost would offset a lot of the dividend premium, whilst offering additional diversification against a wider basket of shares. As an index, the FTSE100 is a relatively high dividend payer anyway, so well see how it goes. The unit cost was around GBP28.7.
Incidentally i was tempted to buy the Vanguard europe index tracker (VERX) for similar reasons, but having only just been launched it didn't yet appear to be actively traded on my online broker platform, hence sticking with IDVY. This may instead be one to watch for the future.
Property value update
I periodically review the value i record my investment property against the local market using valuation websites, local properties on the market and recent local sales.
According to all these indicators, local valuations are still increasing, so i've added an extra 5% to my recorded valuation. Despite the latest increase, i'm still holding it at 10% below the market as i remain somewhat skeptical about how sustainable the recent price increases can be.
Property remains by far and away my most successful asset class, generating high yield along with material capital gains.
According to all these indicators, local valuations are still increasing, so i've added an extra 5% to my recorded valuation. Despite the latest increase, i'm still holding it at 10% below the market as i remain somewhat skeptical about how sustainable the recent price increases can be.
Property remains by far and away my most successful asset class, generating high yield along with material capital gains.
Tuesday, 30 September 2014
AAPL Sold
I sold my small number of apple shares in August at around $99, realising a capital gain of over 60%.
This investment was one of my rare deviations away from the core portfolio of well diversified high income ETFs, bought more for curiosity and a sense of value following its steep fall in price in late 2012 / early 2013.
Having returned close to its historic highs i decided to sell & lock in a healthy profit, making it one of my more successful investments.
If only i'd bought more.....
This investment was one of my rare deviations away from the core portfolio of well diversified high income ETFs, bought more for curiosity and a sense of value following its steep fall in price in late 2012 / early 2013.
Having returned close to its historic highs i decided to sell & lock in a healthy profit, making it one of my more successful investments.
If only i'd bought more.....
September 2014 Review
September saw my net worth increase by 0.3%, with falls in investments and pension funds, along with larger than average expenses, offsetting most of the month's income.
The value of my investment portfolio fell by around 1.5% as equity markets fell, with a particularly sharp drop in HK following the recent political protests. My small amount of Apple shares were disposed of during the month, realising a large capital gain.
My pension fund unit values fell by around 1.5% in line with falling equities markets.
Property rental income was paid in full & on time with a small annual expense paid.
Cash balances were higher, with savings from income and a small investment disposal. Expenses were higher partly due to some IT upgrades.
Year to date net worth growth: 21.5%
Year to date savings rate: 66%
The value of my investment portfolio fell by around 1.5% as equity markets fell, with a particularly sharp drop in HK following the recent political protests. My small amount of Apple shares were disposed of during the month, realising a large capital gain.
My pension fund unit values fell by around 1.5% in line with falling equities markets.
Property rental income was paid in full & on time with a small annual expense paid.
Cash balances were higher, with savings from income and a small investment disposal. Expenses were higher partly due to some IT upgrades.
Year to date net worth growth: 21.5%
Year to date savings rate: 66%
Saturday, 30 August 2014
August 2014 Review
August saw my net worth increase by 1%, with gains in investments, pension funds and cash balances.
The value of my investment portfolio increased by close to 2% as equity markets continued their recent rally. I purchased small amounts of the HK Gov iBond along with standing monthly purchases of HK & China index trackers. These monthly purchases have subsequently been cancelled given the recent strength in these markets. A handful of dividends were also received.
My pension fund unit values increased by around 1% on the back of strong equities performance.
Property rental income was paid in full & on time and a renewal of the lease has now been signed. I expect a few renewal costs in the next month.
Cash balances were higher, with savings from income exceeding expenses & investments. Expenses were better than recent months although still tracking above plan.
Year to date net worth growth: 21%
Year to date savings rate: 67%
The value of my investment portfolio increased by close to 2% as equity markets continued their recent rally. I purchased small amounts of the HK Gov iBond along with standing monthly purchases of HK & China index trackers. These monthly purchases have subsequently been cancelled given the recent strength in these markets. A handful of dividends were also received.
My pension fund unit values increased by around 1% on the back of strong equities performance.
Property rental income was paid in full & on time and a renewal of the lease has now been signed. I expect a few renewal costs in the next month.
Cash balances were higher, with savings from income exceeding expenses & investments. Expenses were better than recent months although still tracking above plan.
Year to date net worth growth: 21%
Year to date savings rate: 67%
Wednesday, 27 August 2014
Taking a pause...
For the past 18 months or so i've been adding a regular monthly purchase of HK and China Index tracker ETFs to my investment portfolio.
Given the recent rallies in both markets and my growing exposure to them, i've decided to take a pause after this month's purchases & cancel the standing monthly orders. It is tempting to sell what i have and lock in some healthy gains, but the reality is there is nothing better to do with the cash at the moment.
Instead i'll hold what i have and see where the market goes. If there is a material pull back i may restart the purchases, if the rally continues i'll reassess whether it makes sense to lock in the gains and look for alternatives.
In general my cash balances are still probably too high, but it doesn't feel like the right time to be buying into equities at the moment. I am still considering potential property purchases as an alternative.
Given the recent rallies in both markets and my growing exposure to them, i've decided to take a pause after this month's purchases & cancel the standing monthly orders. It is tempting to sell what i have and lock in some healthy gains, but the reality is there is nothing better to do with the cash at the moment.
Instead i'll hold what i have and see where the market goes. If there is a material pull back i may restart the purchases, if the rally continues i'll reassess whether it makes sense to lock in the gains and look for alternatives.
In general my cash balances are still probably too high, but it doesn't feel like the right time to be buying into equities at the moment. I am still considering potential property purchases as an alternative.
HK iBond Purchased
Earlier this month i purchased 2 units of the new annual HK iBond, which was the maximum subscription amount given its popularity.
Whilst the amounts are small, this represents probably the best 'cash' return available for HKD, in line with the local rate of inflation.
It is frustrating that it is not possible to buy more, but given the relative health of the HK public sector finances, I can understand why there is no great desire to raise significant amounts of this relatively expensive debt.
Whilst the amounts are small, this represents probably the best 'cash' return available for HKD, in line with the local rate of inflation.
It is frustrating that it is not possible to buy more, but given the relative health of the HK public sector finances, I can understand why there is no great desire to raise significant amounts of this relatively expensive debt.
Friday, 1 August 2014
July 2014 Review
July saw my net worth increase by 2.4%, with gains in investments, pension funds & another increase in property value.
The value of my investment portfolio increased by close to 1% as equity markets rallied. The largest purchase in the month was an emerging market bond ETF. Both the HK and China tracker ETFs had healthy gains.
My pension fund unit values increased by around 1.5% with gains in the HK market in particular.
Property rental income was paid in full & on time with no additional expenses. I increased the value of my property again, by around 3% this time. I'm still holding it around 8% below market value as i don't think all of the recent increases are sustainable.
Cash balances were slightly lower with good income and average expenses offset by the bond ETF investment.
Year to date net worth growth: 19.8%
Year to date savings rate: 69%
The value of my investment portfolio increased by close to 1% as equity markets rallied. The largest purchase in the month was an emerging market bond ETF. Both the HK and China tracker ETFs had healthy gains.
My pension fund unit values increased by around 1.5% with gains in the HK market in particular.
Property rental income was paid in full & on time with no additional expenses. I increased the value of my property again, by around 3% this time. I'm still holding it around 8% below market value as i don't think all of the recent increases are sustainable.
Cash balances were slightly lower with good income and average expenses offset by the bond ETF investment.
Year to date net worth growth: 19.8%
Year to date savings rate: 69%
Thursday, 3 July 2014
SEML.L Purchased
I've just added SEML.L (an emerging market government bond ETF) to my investment portfolio, following a quick trawl through a list if iShares ETF yields.
This ETF contains a broad based holding of local currency denominated government bonds, with the largest holdings in Malaysia, Poland, Mexico, South Africa & Turkey, currently 14 countries in total. It currently has a distribution yield of around 5.6%, having seen the unit price fall over the first half of the year - i suspect this is more a result of depreciating local currencies than any specific credit risk concerns.
I currently hold a reasonable amount of emerging market equities ETFs, which have also fallen in value on weaker currencies. Rather than continuing to add to these, it seemed like a good opportunity to increase the fixed income portion of my investment portfolio instead & lock in a solid income stream.
Many of the countries within the ETF are not subject to the current US/UK/Eurozone style low interest rate enviroments, so i hope there would be less chance of material capital depreciation from rising rates. FX movements, however, would remain a risk going forward if the trends of the last year continue.
I paid around GBP48.7 per unit, the investment size was broadly comparable to most of my new ETF purchases.
This ETF contains a broad based holding of local currency denominated government bonds, with the largest holdings in Malaysia, Poland, Mexico, South Africa & Turkey, currently 14 countries in total. It currently has a distribution yield of around 5.6%, having seen the unit price fall over the first half of the year - i suspect this is more a result of depreciating local currencies than any specific credit risk concerns.
I currently hold a reasonable amount of emerging market equities ETFs, which have also fallen in value on weaker currencies. Rather than continuing to add to these, it seemed like a good opportunity to increase the fixed income portion of my investment portfolio instead & lock in a solid income stream.
Many of the countries within the ETF are not subject to the current US/UK/Eurozone style low interest rate enviroments, so i hope there would be less chance of material capital depreciation from rising rates. FX movements, however, would remain a risk going forward if the trends of the last year continue.
I paid around GBP48.7 per unit, the investment size was broadly comparable to most of my new ETF purchases.
Sunday, 29 June 2014
June 2104 Review
June saw my net worth increase by 0.1%, with gains in investments, pension funds & savings largely offset by an adverse fx movement following the periodical revaluation of my foreign currency assets.
In order to minimise volatility & keep my spreadsheets simple i tend to only revalue my foreign currency assets when fx rates move significantly. My largest exposure is GBP/HKD, and with HKD having gradually weakened over the past 6 months with a recent acceleration in this trend, i've recognised the full movement this month. The impact was a reduction in GBP net worth of just under 1%, which offset most of the underlying gains across asset classes for the month.
The value of my investment portfolio increased by around 1% before the fx revaluation, but fell after factoring this in. Dividends were very high, with a number of ETFs paying large dividends in the same month. There were no major purchases other than the usual standing monthly investments.
Likewise, my pension fund unit values increased by around 1% before the fx revaluation, but fell after factoring this in.
Property rental income was paid in full & on time with no additional expenses. I'm in the process of renewing the tenancy, although this is unlikely to see an increase in rental income this time.
Cash balances were slightly higher with good income but some travel expenses in the month reducing my typical savings rate.
Year to date net worth growth: 17.1%
Year to date savings rate: 70%
In order to minimise volatility & keep my spreadsheets simple i tend to only revalue my foreign currency assets when fx rates move significantly. My largest exposure is GBP/HKD, and with HKD having gradually weakened over the past 6 months with a recent acceleration in this trend, i've recognised the full movement this month. The impact was a reduction in GBP net worth of just under 1%, which offset most of the underlying gains across asset classes for the month.
The value of my investment portfolio increased by around 1% before the fx revaluation, but fell after factoring this in. Dividends were very high, with a number of ETFs paying large dividends in the same month. There were no major purchases other than the usual standing monthly investments.
Likewise, my pension fund unit values increased by around 1% before the fx revaluation, but fell after factoring this in.
Property rental income was paid in full & on time with no additional expenses. I'm in the process of renewing the tenancy, although this is unlikely to see an increase in rental income this time.
Cash balances were slightly higher with good income but some travel expenses in the month reducing my typical savings rate.
Year to date net worth growth: 17.1%
Year to date savings rate: 70%
Property: to buy, to sell or to hold...
I've been mulling over a number of decisions about property investments recently.
Firstly, the tenancy on my existing rental property is up for renewal so i took the opportunity to check the current sale value, which was materially higher than the value i'm currently holding the property at in my accounts. I was very tempted to sell & lock in the capital gain, especially given the steep rise in local valuations and the potential for these to fall back. However, i decided to hold on to it and continue to rent it out for another year, primarily as there are no obvious alternatives for investing the cash this would release at a comparable yield. I'm already struggling to manage down my excess cash balances so don't want to compound the issue further.
In addition to this i'm also looking at additional smaller property investments in a different location that has not seen similar price rises in recent years, and as a result offers more attractive yields. My current cash holdings are around 37% and whilst the overall cash balance yields just over 2%, incremental cash is earning closer to 1%. I'd therefore like to start managing this balance down, and the property investments i'm looking at could yield around 5%.
Given the high yield and lower valuations, i did also consider selling my existing property and buying on a much larger scale in the new location. However, for now this isn't attractive as (a) there's a chance i may return to the existing property location in the future so benefit from hedging against price movements there, and (b) i don't have experience of the market in the new location so will start small and see how it goes.
Firstly, the tenancy on my existing rental property is up for renewal so i took the opportunity to check the current sale value, which was materially higher than the value i'm currently holding the property at in my accounts. I was very tempted to sell & lock in the capital gain, especially given the steep rise in local valuations and the potential for these to fall back. However, i decided to hold on to it and continue to rent it out for another year, primarily as there are no obvious alternatives for investing the cash this would release at a comparable yield. I'm already struggling to manage down my excess cash balances so don't want to compound the issue further.
In addition to this i'm also looking at additional smaller property investments in a different location that has not seen similar price rises in recent years, and as a result offers more attractive yields. My current cash holdings are around 37% and whilst the overall cash balance yields just over 2%, incremental cash is earning closer to 1%. I'd therefore like to start managing this balance down, and the property investments i'm looking at could yield around 5%.
Given the high yield and lower valuations, i did also consider selling my existing property and buying on a much larger scale in the new location. However, for now this isn't attractive as (a) there's a chance i may return to the existing property location in the future so benefit from hedging against price movements there, and (b) i don't have experience of the market in the new location so will start small and see how it goes.
Saturday, 31 May 2014
May 2014 Review
May saw my net worth increase by 1.1%, with gains in investments & pension funds, along with moderate savings.
The value of my investment portfolio increased by around 1.5%. Purchases were limited to standing monthly purchases of the HK & China indices and an RMB bond ETF (using up my spare RMB cash), with quite a few dividends in the month.
My pension fund unit values increased by around 2%, with gains across most equities markets.
Property rental income was paid in full & on time with no additional expenses.
Cash balances were flat with good income but higher than expected expenses, with a number of social events in the month. Expenses are running well above plan this year, which is becoming a bit of a concern, albeit more than offset by higher than planned income. The was just one medium sized investment in the month.
Year to date net worth growth: 17%
Year to date savings rate: 73%
The value of my investment portfolio increased by around 1.5%. Purchases were limited to standing monthly purchases of the HK & China indices and an RMB bond ETF (using up my spare RMB cash), with quite a few dividends in the month.
My pension fund unit values increased by around 2%, with gains across most equities markets.
Property rental income was paid in full & on time with no additional expenses.
Cash balances were flat with good income but higher than expected expenses, with a number of social events in the month. Expenses are running well above plan this year, which is becoming a bit of a concern, albeit more than offset by higher than planned income. The was just one medium sized investment in the month.
Year to date net worth growth: 17%
Year to date savings rate: 73%
Tuesday, 29 April 2014
April 2014 Review
April saw my net worth increase by 3.3%, with positive movements in all major asset categories.
The value of my investment portfolio increased by around 0.7%. Purchases were limited to standing monthly purchases of the HK & China indices, with no dividends in the month. I am still in two minds about whether to continue increasing my exposure to China but the monthly investment is currently very small.
My pension fund unit values increased by around 2%, with gains mainly in western equities.
Property rental income was paid in full & on time with no additional expenses. I increased the recorded value of my property by another 5% following strong market increases & local sales. It is still held at around 10% below the implied market value, reflecting my skepticism around the sustainability of current valuations.
Cash balances increased with good income & average expenses. The month's expenses included holiday expenditure that had been budgeted for.
Year to date net worth growth: 15.7%
Year to date savings rate: 76%
The value of my investment portfolio increased by around 0.7%. Purchases were limited to standing monthly purchases of the HK & China indices, with no dividends in the month. I am still in two minds about whether to continue increasing my exposure to China but the monthly investment is currently very small.
My pension fund unit values increased by around 2%, with gains mainly in western equities.
Property rental income was paid in full & on time with no additional expenses. I increased the recorded value of my property by another 5% following strong market increases & local sales. It is still held at around 10% below the implied market value, reflecting my skepticism around the sustainability of current valuations.
Cash balances increased with good income & average expenses. The month's expenses included holiday expenditure that had been budgeted for.
Year to date net worth growth: 15.7%
Year to date savings rate: 76%
Wednesday, 2 April 2014
Property valuation
I was shocked again today to see how quickly some UK property prices are rising, particularly around the London area.
Whilst its only around 3 months since i last reviewed and increased the value i record my rental property in my personal finances, checking local valuations again today showed another material increase. The valuations appear to be genuine too, with a neighbouring (and almost identical) property just being sold for around 18% above the value i was holding mine at.
I have therefore decided to add an extra 5% to my property value in my assets and net worth calculations. While this still keeps it around 10% below 'the market', it does reflect the recent increases and allows a margin of error for some fluctuations going forward.
I am also keeping a close eye on potential capital gains tax changes which may determine whether i continue to hold or sell this property. Whilst it is tempting to sell now and realise a large tax free gain, my cash balances are already too large a proportion of total assets and the rental yield is double what i can earn on cash.
Whilst its only around 3 months since i last reviewed and increased the value i record my rental property in my personal finances, checking local valuations again today showed another material increase. The valuations appear to be genuine too, with a neighbouring (and almost identical) property just being sold for around 18% above the value i was holding mine at.
I have therefore decided to add an extra 5% to my property value in my assets and net worth calculations. While this still keeps it around 10% below 'the market', it does reflect the recent increases and allows a margin of error for some fluctuations going forward.
I am also keeping a close eye on potential capital gains tax changes which may determine whether i continue to hold or sell this property. Whilst it is tempting to sell now and realise a large tax free gain, my cash balances are already too large a proportion of total assets and the rental yield is double what i can earn on cash.
Monday, 31 March 2014
March 2014 Review
March saw my net worth increase by 9.2%, with a large lump sum income adding to cash reserves.
The value of my investment portfolio was broadly flat but paid higher than average dividends. Purchases included the RMB bond ETF and China equities. Whilst there was a lot of volatility during the month, the movements all generally offset each other.
My pension fund unit values fell by around 1%, mainly due to weaker HK equities.
Property rental income was paid in full & on time.
Cash balances increased materially with high income. Expenses were also high with a few personal treats but nothing too extravagant. March income tends to have a distorting impact on year to date performance and i expect my savings rate to drift back down as the year progresses.
Year to date net worth growth: 12.1%
Year to date savings rate: 79%
The value of my investment portfolio was broadly flat but paid higher than average dividends. Purchases included the RMB bond ETF and China equities. Whilst there was a lot of volatility during the month, the movements all generally offset each other.
My pension fund unit values fell by around 1%, mainly due to weaker HK equities.
Property rental income was paid in full & on time.
Cash balances increased materially with high income. Expenses were also high with a few personal treats but nothing too extravagant. March income tends to have a distorting impact on year to date performance and i expect my savings rate to drift back down as the year progresses.
Year to date net worth growth: 12.1%
Year to date savings rate: 79%
Wednesday, 26 March 2014
3139.HK Purchased
Earlier this week i added to my holding of the ishares RMB Bond ETF.
Although the underlying value has been fairly flat & dividend solid at around 4%, the price of the HKD denominated units have fallen around 3% as RMB has depreciated against HKD over the past few weeks.
Whilst there has been a lot of discussion in the media about RMB depreciation, widening of the exchange rate trading band & general confidence around China, my personal view is still to expect currency appreciation & growth albeit with some volatility along the way.
In the meantime i am happy to take a 4% yield on what should in theory be relatively low credit risk. Any additional pick-up from RMB appreciation will be an added bonus.
The additional units were purchased at around HKD43.1, and this has now become the largest individual holding in my investment portfolio.
Although the underlying value has been fairly flat & dividend solid at around 4%, the price of the HKD denominated units have fallen around 3% as RMB has depreciated against HKD over the past few weeks.
Whilst there has been a lot of discussion in the media about RMB depreciation, widening of the exchange rate trading band & general confidence around China, my personal view is still to expect currency appreciation & growth albeit with some volatility along the way.
In the meantime i am happy to take a 4% yield on what should in theory be relatively low credit risk. Any additional pick-up from RMB appreciation will be an added bonus.
The additional units were purchased at around HKD43.1, and this has now become the largest individual holding in my investment portfolio.
Lump sum income
I've been lucky enough to receive a reasonably large cash lump sum from my employment.
Whilst this is always welcome, it does compound my existing issues of a growing cash pile and a lack of risk appetite to invest material amounts in the financial markets given current volatility & valuations.
Whilst i do have a few luxury purchases in mind and have made a couple of initial investments, i am likely to sit on the cash pile for a while until i have a clearer strategy what to do with it.
My overall cash yield remains above 2%, which gives me some comfort that i'm not losing too much to inflation in the meantime.
Whilst this is always welcome, it does compound my existing issues of a growing cash pile and a lack of risk appetite to invest material amounts in the financial markets given current volatility & valuations.
Whilst i do have a few luxury purchases in mind and have made a couple of initial investments, i am likely to sit on the cash pile for a while until i have a clearer strategy what to do with it.
My overall cash yield remains above 2%, which gives me some comfort that i'm not losing too much to inflation in the meantime.
Monday, 3 March 2014
3049.HK Purchased
Following a long period of sitting on the sidelines, today i increased my holding of the China CSI300 tracker ETF.
China shares have taken a real beating over the last few weeks, with both declining values coupled with a depreciating currency.
I've been buying this ETF for around 8 months as part of a small but regular monthly investment with an average purchase price of around HKD5.7. Following the recent sharp drop, today I added to this position with the equivalent of around 3 months regular purchases, at an incremental price of HKD4.98.
Whilst there are obvious risks associated with China shares, and in particular the large index weighting to financials, i consider the current valuation sufficiently low to justify additional purchases. I intend to continue the small standard monthly purchase unless there are any developments that warrant a rethink of my China exposure.
China shares have taken a real beating over the last few weeks, with both declining values coupled with a depreciating currency.
I've been buying this ETF for around 8 months as part of a small but regular monthly investment with an average purchase price of around HKD5.7. Following the recent sharp drop, today I added to this position with the equivalent of around 3 months regular purchases, at an incremental price of HKD4.98.
Whilst there are obvious risks associated with China shares, and in particular the large index weighting to financials, i consider the current valuation sufficiently low to justify additional purchases. I intend to continue the small standard monthly purchase unless there are any developments that warrant a rethink of my China exposure.
Friday, 28 February 2014
February 2014 Review
February saw my net worth increase by 1.5%, with increases in my investments & pension funds, along with a higher savings rate.
The value of my investment portfolio increased over 2%, reversing most of the decline in January. Purchases were limited to standing monthly purchases of the HK and China indices. One notable increase was in gold, with the first move up for a long time. The China CSI Index ETF fell to a very low level by the end of the month, leading me to consider further purchases. Developed market ETFs generally performed better.
My pension fund unit values increased by around 2%, more than reversing the decline in January
Property rental income was paid in full & on time.
Cash balances increased with no major expenses or investments and a better savings rate of 58% for the month.
Year to date net worth growth: 2.6%
Year to date savings rate: 52%
The value of my investment portfolio increased over 2%, reversing most of the decline in January. Purchases were limited to standing monthly purchases of the HK and China indices. One notable increase was in gold, with the first move up for a long time. The China CSI Index ETF fell to a very low level by the end of the month, leading me to consider further purchases. Developed market ETFs generally performed better.
My pension fund unit values increased by around 2%, more than reversing the decline in January
Property rental income was paid in full & on time.
Cash balances increased with no major expenses or investments and a better savings rate of 58% for the month.
Year to date net worth growth: 2.6%
Year to date savings rate: 52%
Friday, 31 January 2014
January 2014 Review
January saw my net worth increase by 1.1%, with poor investment & pension performance offset by reasonable savings and an increase in my property value.
The value of my investment portfolio was down over 2% following sharp decreases in equities markets late in the month. Purchases were limited to standing monthly purchases of the HK and China indices. The recent movements in emerging markets equities and currencies are of concern, but i'm letting the dust settle on the recent falls before considering new purchases.
My pension fund unit values fell around 1%. Having started the month positively, values dropped significantly towards the end of the month
Property rental income was steady. I also increased the value i hold the property at given continued strength in the local market. My valuation is still lagging the actual market to maintain a conservative view.
Cash balances decreased following the payment of most of my income tax bill which was fully provided for. Savings were slightly below average as a number of Christmas and travel costs at the end of the year fell into January.
Year to date net worth growth: 1.1%
Year to date savings rate: 46%
The value of my investment portfolio was down over 2% following sharp decreases in equities markets late in the month. Purchases were limited to standing monthly purchases of the HK and China indices. The recent movements in emerging markets equities and currencies are of concern, but i'm letting the dust settle on the recent falls before considering new purchases.
My pension fund unit values fell around 1%. Having started the month positively, values dropped significantly towards the end of the month
Property rental income was steady. I also increased the value i hold the property at given continued strength in the local market. My valuation is still lagging the actual market to maintain a conservative view.
Cash balances decreased following the payment of most of my income tax bill which was fully provided for. Savings were slightly below average as a number of Christmas and travel costs at the end of the year fell into January.
Year to date net worth growth: 1.1%
Year to date savings rate: 46%
Thursday, 16 January 2014
2013 Annual Review
Looking back, 2013 was a very successful year financially. With headline figures of 39.5% net worth growth and a 69% savings rate, it has been my best year yet.
Asset performance:
My property investment continued to yield reliable high income, and the property value continued to appreciate. In 2013 (and going back long before) this continued to be my best performing asset.
My pension funds appreciated, with unit values increasing around 15% on top of continued monthly contributions. This benefited particularly from the exceptional UK and US stock market performance.
My investment portfolio grew materially with regular investments, but had mixed performance with developed equities outperforming emerging markets. Although many investments appreciated and paid regular high dividends, falling metals and some adverse fx movements saw the overall performance stay fairly flat.
Cash grew materially, both in dollar terms and as a proportion of total assets. This was a result of a high savings rate and a couple of big one offs. I did manage to maintain a reasonable cash yield over 2%.
Performance against 2013 objectives:
1) Reduce cash balances towards my medium term target of 20% of total assets.
FAIL, although i did continue to build up my investment portfolio to a reasonable size and maintain a healthy cash yield. I really need to give some thought as to my target asset allocation, as the more this builds up, the greater the effort will be to re-balance.
2) Maintain investment discipline.
Overall, i am happy with my performance here. 2013 was by far my most active year in the markets and i have built a portfolio that largely meets my investment objectives. One blemish early on saw a loss realised on some more risky pref shares from chasing yield.
3) Achieve a high savings rate.
This was a major success, and achieved whilst not making a conscious effort to hold back on any particular expenses. I expect this to drop in 2014, but still stay well above my target floor of 50%.
4) Improve fitness.
This was broadly flat, with ups and downs during the year. My gym membership was renewed and I will re-focus for the new year.
5) Improve work/life balance.
2013 was a very tough year for work, and whilst this started quite badly, i felt it did improve towards the end of the year. Realistically work will stay challenging going forward, but i feel i am doing a better job of making the most of time away from work.
Overall, i'm happy with what i achieved in 2013. That said, there are a number of things i'd like to work on in 2014 which i'll cover in a separate post.
Asset performance:
My property investment continued to yield reliable high income, and the property value continued to appreciate. In 2013 (and going back long before) this continued to be my best performing asset.
My pension funds appreciated, with unit values increasing around 15% on top of continued monthly contributions. This benefited particularly from the exceptional UK and US stock market performance.
My investment portfolio grew materially with regular investments, but had mixed performance with developed equities outperforming emerging markets. Although many investments appreciated and paid regular high dividends, falling metals and some adverse fx movements saw the overall performance stay fairly flat.
Cash grew materially, both in dollar terms and as a proportion of total assets. This was a result of a high savings rate and a couple of big one offs. I did manage to maintain a reasonable cash yield over 2%.
Performance against 2013 objectives:
1) Reduce cash balances towards my medium term target of 20% of total assets.
FAIL, although i did continue to build up my investment portfolio to a reasonable size and maintain a healthy cash yield. I really need to give some thought as to my target asset allocation, as the more this builds up, the greater the effort will be to re-balance.
2) Maintain investment discipline.
Overall, i am happy with my performance here. 2013 was by far my most active year in the markets and i have built a portfolio that largely meets my investment objectives. One blemish early on saw a loss realised on some more risky pref shares from chasing yield.
3) Achieve a high savings rate.
This was a major success, and achieved whilst not making a conscious effort to hold back on any particular expenses. I expect this to drop in 2014, but still stay well above my target floor of 50%.
4) Improve fitness.
This was broadly flat, with ups and downs during the year. My gym membership was renewed and I will re-focus for the new year.
5) Improve work/life balance.
2013 was a very tough year for work, and whilst this started quite badly, i felt it did improve towards the end of the year. Realistically work will stay challenging going forward, but i feel i am doing a better job of making the most of time away from work.
Overall, i'm happy with what i achieved in 2013. That said, there are a number of things i'd like to work on in 2014 which i'll cover in a separate post.
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