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.
Wednesday, 27 August 2014
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.
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