Thursday, November 30, 2017

Financial Review - November, 2017

November was another positive month for the portfolio with small positive movements in all asset classes offsetting small declines in the AUD/NZD producing a 0.98 percent increase in net assets.

For the year, the portfolio is up 18.21 percent. The adjusted change from when I retired in September 2013 is a 26.01 percent increase. Hong Kong liquidity stands at 27.37 months of estimated outgoings, well down on January's 38.6 months due to new investments + transfers to New Zealand.

Here are the details:

1. my Hong Kong equities increased. There were no new investments this month;

2. my AU/NZ equities were mixed with Australia being marginally ahead and New Zealand falling slightly. I sold my shares in PG Wrightson (NZX: PGW). PGW has been a good performer and pays high dividends but I have doubts about sustainability. As part of my review of the smaller investments in the portfolio, I sold my shares in Specialty Fashion (ASX: SFH), the worst performing share in the portfolio having finally lost any residual faith in the company's management. I should have sold years ago. I purchased some additional shares in Grange Resources (ASX: GRR) on the huge uplift in the premium iron ore pellets are receiving over fines. I currently have too high a proportion of my New Zealand assets in cash; equity ETFs were up slightly (India, Hong Kong and China) in line with the local markets;

4. my position in silver rose and my small position in platinum recovered slightly;

5. all tenants are paying on time and all properties are let. Unusually, there were no repairs at all in November but I have received another irritatingly pointless mandatory window inspection scheme notice;

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

7. my position in bonds remains modest. 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 low.

My HK cash position fell slightly during the month. I currently hold 27.37 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 9.85% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio. With a mark-to-market of equities, bonds and FX this number will fluctuate even if the amount of debt is being slowly amortised.

I would like to make some additional investments but am struggling to find good value in the markets I follow. With expectations of further rises in interest rates muted, I remain tempted by the carry trade and would do one or two more should the right offers be available. I am reviewing some of the smaller investments in the portfolio with a view to either exiting or adding to my positions - too many very small investments are taking up a disproportionate amount of time to monitor.

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