Friday, July 01, 2011

Monthly Review - June 2011

June was a very bad month for investments, and with mark to market declines in asset values being large enough to result in a reduction in net worth. This is the third month in a row that equity values have declined.

Equities, ETFs and commodities all declined during the month with a very small positive contribution from currency fluctuations, positive cash flow from the properties and a moderate savings rate being insufficient 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 (separate post to follow). During the month I purchased shares in Sino Oil & Gas and China Blue Chemical; ETFs were down marginally in line with the local markets;

3. my commodities declined, led by a big drop 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. While I had no repair bills this month, I will have a large 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 appreciated against the HKD/USD;

6. my position in bonds remains small. There were no purchases this month;

7. I entered into an FX derivative contract - short NZD/HKD;

8. savings were moderate with high income and high expenses. Fluctuations in income is inherent in the nature of my remuneration package. The additional expenses this month were due to the en primeur wine campaign;

9. I transferred some money to Mrs Traineeinvestor.

My cash position was slightly increased (in spite of the new investments and the transfer to Mrs Traineeinvestor). I currently hold 21.4 months of expenses in HKD cash or equivalents (compared to 26 months at the end of February).

For the month, my net worth decreased by 0.09%. The year to date increase is 11.65%


CCK stock said...

Amazing good return in 2011! I found many famous funds are losing money. You got more than 11%+. Would you share with us your asset allocation in % then we can learn from you more? Thanks.

traineeinvestor said...

CCK Stock

Thanks for dropping by.

The 11% is the change in net worth for the year (excluding changes in property values) - returns on equity and commodity investments, dividends, interest, rent and savings. It is not just a return on investments.

I haven't isolated the effect of each asset class, but equities have had a pretty mediocre year so far and have probably gone backwards in terms of value. The increase in net worth has come from rents, dividends, interest, savings and FX fluctuations.