Wednesday, August 29, 2018

Monthly Review – August, 2018

I am running the end-of-month numbers two days early due to travel schedules.

August saw a decline in net worth with losses in all asset classes compounded by adverse currency movements. The end result was a 1.71 percent decline in net assets.

For the year to date, the portfolio is down 0.38 percent. The adjusted change from when I retired in September 2013 is a 26.38 percent increase. Hong Kong liquidity stands at 43.1 months of estimated outgoings, significantly increased from the start of the year's 26.68 months due to net asset sales and a new mortgage loan. 

Here are the details:

1. my Hong Kong equities fell. I made additional purchases of CK Holdings (HK:1) and opened a position in China Everbright (HK:257) when the stock fell after announcing a heavy rights issue. I also sold the underperforming Anhui Express (HK:995) and reinvested the proceeds and a bit more in Yue Xui Transport (HK:1052) which appears to have better growth prospects;

2. my AU/NZ equities were were down slightly. I purchased some additional shares in NZ Refining (NZX: NZR); equity ETFs were down (India, Hong Kong and China) in line with the local markets;

4. my position in silver was down. I am considering selling my silver and investing the money in equities for additional income;

5. all tenants are paying on time and all properties are let;

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. 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 (again) as I put down a deposit on a car – which I don't need but would like.

My HK cash position rose during the month due to the new mortgage loan being greater than the new investments. I currently hold 43.1 months of expenses in HKD cash or equivalents (up from 26.68 months on 1 January). 

Total household gearing ((debt+accruals)/assets) is 9.39% 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. The increase from last month's figure is due to a combination of the new mortgage loan and a fall in asset values.