Wednesday, March 01, 2017

February was another good month for the portfolio with small gains across the board producing a 1.69 percent increase in net assets.

For the year, the portfolio is up 4.22%. The adjusted change from when I retired in September 2013 is an 10.69% increase. Hong Kong liquidity stands at 32.5 months of estimated outgoings, well down on last month's 38.6 months due to new investments. 

Here are the details:

1. my Hong Kong equities increased. I added some additional shares in HSBC (HK:5) at HK$64.20 in February and opened a position in New World Development (HK:17) at 9.09. Trailing yields on purchase price are about 6% and 5% respectively and I expect the former to be sustainable given the share repurchase and the latter to grow slowly as new revenue streams come on line;

2. my AU/NZ equities appreciated slightly. I added a few more shares in Skellerup (HZX: SKL) to the portfolio. I am still looking for more investments in New Zealand to get a better match between income and expenses in that currency; equity ETFs were up (India, Hong Kong and China) in line with the local markets;

4. my position in silver rose;

5. all tenants are paying on time and both vacancies have been filled with one new tenant moving in last week and the other moving in this weekend;

6. both the NZD and thee AUD were more or less flat against the HKD/USD;

7. my position in bonds remains small;

8. expenses were at the low end of expectations with no travel costs or other large items to pay;

9.there were no transfers to Mrs Traineeinvestor;

10. there were no derivative transactions this month.

My HK cash position fell during the month due to the new investments in HSBC and NWD. I currently hold 32.5 months of expenses in HKD cash or equivalents.

I have spent more time thinking about total household gearing. Total liabilities (including accruals) is less than 10 percent of total assets but this is not calculated precisely because (i) one of my portfolio investments which involves the use of a margin facility is included in the balance sheet on a net basis and (ii) accruals for things like taxes and longer term expenses are included in liabilities. The 10% is a back-of-the-envelope number which I should track more closely. There is obviously plenty of capacity there to increase debt levels if I could find the right opportunity. Alternatively, if the right investments come along, I shouldn't be shy about reducing my HK liquidity number to something closer to 12 months of anticipated outgoings.

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