Monday, July 02, 2018

Financial Review – June, 2018

June saw a fall in net worth with declines in all asset classes (apart from small gains in Au and NZ equities in local currencies) compounded by adverse currency movements. The end result was a 3.85 percent increase in net assets.

For the year to date, the portfolio is down 1.08 percent. The adjusted change from when I retired in September 2013 is a 25.37 percent increase. Hong Kong liquidity stands at 38.96 months of estimated outgoings, significantly increased from the start of the year's 26.68 months due to net asset sales. 

Here are the details:

1. my Hong Kong equities fell. I made a small additional investment in Cheung Kong Holdings (HKEX: 001);

2. my AU/NZ equities were were down. I made a small additional investment in Colonial Motor Company (NZX: CMO); equity ETFs were down (India, Hong Kong and China) in line with the local markets;

4. my position in silver was down;

5. all tenants are paying on time and all properties are let. However, three tenants will move out in July. I have secured replacement tenants at slightly higher rents for two of the properties and the third is on the market;

6. the AUD and NZD were down against the USD/HKD;

7. my position in bonds remains modest. There were no additional purchases this month and one bond matured – proceeds were applied to a partial repayment of my margin facility. Recent interest rate increases have pushed the holding values of some of my bonds to  below par - since I intend holding to maturity (other than a solitary perpetual) this is not a problem. I have a margin facility in place and my carry trade is doing its thing and generating a small amount of additional income;

8. expenses were high as I paid for an air ticket for a recent trip to New Zealand later this year and some of the expenses for our family's summer holiday;

My HK cash position fell slightly during the month. I currently hold 38.96 months of expenses in HKD cash or equivalents (up from 26.68 months on 1 January). 

Total household gearing ((debt+accruals)/assets) is 8.81% of total assets. Property prices are as at 1 January, 2018 and will not be marked-to-market until year end and I do not net off cash. With a mark-to-market of equities, bonds and FX this number will fluctuate even if the amount of debt is being slowly amortised. 

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