Monthly Review - July 2011

July was another bad month for investments, and with mark to market declines in asset values being greater than the gains from rental income, commodities and FX movements. Only a healthy savings rate resulted in a small increase in net worth for the month.

Equities and ETFs all declined during the month with a very small positive contribution from currency fluctuations, positive cash flow from the properties, commodity gains and a moderate savings rate being sufficient to offset the losses.

Here are the details:

1. my Hong Kong equity portfolio declined sharply either in line with the market or due to industry specific factors. During the month I purchased shares in Anhui Express, China VTM, Sino Oli & Gas and CCB. Only the latter is currently above the price paid;

2.my ETFs were down marginally in line with the local markets. I made a small addtion to my position in the Russia ETF;

3. my commodities rose, led by a gain in silver;

4. all of my properties are occupied, the tenants are paying on time. One overseas property has reached the point where a number of long term maintenance issues need to be dealt with. Fortunately the tenant (who has been there for over 7 years) is happy to stay while the work is being done. I had one repair bill this month (a new washing machine). I will have a larger repair bill at some stage on a Hong Kong property suffering from a persistent leak;

5. currency movements were very slightly positive, as the NZD and AUD appreciated against the HKD/USD;

6. my position in bonds remains small. I subscribed for HKD iBonds this month;

7. My only open FX derivative contract - short NZD/HKD - was exercised against me, but I still made a small profit on the transaction;

8. savings were moderate with high income and high expenses. My major expenses were for the en primeur wine season (again). Fluctuations in income is inherent in the nature of my remuneration package. Next month, the annual bill for my family's medical insurance falls due.

My cash position was slightly increased (in spite of the new investments). I currently hold 25.6 months of expenses in HKD cash or equivalents (compared to 26 months at the end of February).

For the month, my net worth increased by 0.19%. The year to date increase is 11.86%