Tuesday, September 11, 2012

Top ten individual equities

Back in March I posted on my top ten individual equities. A lot has happened over the last six months so here is what the top ten currently looks like:

Rank Company Code Allocation
1 CNOOC 883 1.6%
2 China Gas 384 1.4%
3 Henderson 12 1.4%
4 Sinopec 386 1.3%
5 Hutchison 12 1.2%
6 CCB 939 1.0%
7 Fairwood              52 0.9%
8 Cosco Pacific 1199 0.9%
9 Sinotrans 368 0.8%
10 China Blue Chemical 3983 0.8%

A few details:

1. As with the previous list, the allocations are the current value of each shareholding as a percentage of net household assets including properties at estimated current market prices.

2. The "top ten" have increased from 10.2% of household net assets to 11.3%. The portfolio has become more concentrated.

3. Five stocks have dropped out of the top ten: CKI, Hua Han, Westpac, HKR International and GDI. Of these, CKI, Westpac and GDI are trading higher today than they were in March (and have paid dividends). HKR International has gone sideways and Hua Han has fallen a little bit.

4. Seven of the top ten are showing meaningful positive returns (after allowing for dividends and transaction costs). Three are at our about break even (CCB, Sinotrans Shipping and China Blue Chemical). None are showing a meaningful loss.

5. The next eleven largest individual equities are not much smaller and have allocations ranging from 0.8% to 0.6%. Of these,nine are trading at well above cost, one at about break even (HKR International) and one at a meaningful loss (China Metal Recycling). (Eleven because there is very little difference in value between #19, #20 and #21 and a bigger drop down to #22.)

6. Of the five stocks which narrowly missed the March top ten, Fairwood has been one of the star performers and is no #7, K Wah (#17) has appreciated, CMR (#18) has fallen somewhat, Yanzhou Coal has fallen sharply (outside the top grouping) and Sino Oil & Gas has been an unmitigated disaster (outside the top grouping and currently in the "too small to be meaningful" category).

7. The accumulation of dividends has been an important contributor to total portfolio return.

In a sense I have been fortunate in that, as a group, the more profitable investments have had higher weightings and the less profitable or loss making investments have had smaller weightings.

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