Portfolio Update Q1 2023
This month marks the end of the 1st quarter of 2023. Thus it's definitely a good time for me to record the performance of my portfolio to track how it has been.
To recap, I started my SG Dividends Portfolio in late 2017, and I began tracking the dividends and all reinvestment done starting 2018. To date, my SG Dividends Portfolio consist of banks, REITs and defense technology. On the other hand, I only started the US Growth Portfolio in late December 2021. Currently, my US Growth Portfolio consist of mainly big tech names, bank and exchange traded funds (ETFs).
Being a relatively conservative investor, I prefer to dollar cost average (DCA) into the market to slowly build up my portfolio. The advantages of using Interactive Brokers to buy the US shares via DCA are undoubtedly the low fees and ability to buy fractional shares of mega-cap technology shares like Alphabet and Tesla. The latest FED meeting in March showed that the FED will unlikely pivot in 2023 because despite inflation falling from above 9% to currently 6.0%, the CPI numbers in the past 3 months showed how sticky inflation is, and is likely to remain elevated in time to come. This basically remains as a main pressure keeping in check the general market sentiments, especially with the 10-year bond yield 'flirting' around the 4% mark. As such, this past couple months are rather volatile for my portfolio, with share prices of banks, financial institutions, REITs and technology companies going through a wild roller-coaster ride.
This is made worse by the news of a 'bank-run' situation at Silicon Valley Bank (SIVB), which led to its collapse on 10th March 2023, in addition to the collapse and liquidation of crypto-bank Silvergate. The financial worries were widespread, causing the Financial Select Sector Index IXM to plunge by 10% in 5 days. Major banks and financial institutions were not spared either, with JP Morgan falling by 6.9% and Bank of America plunging by 11.7%. This is worsened by the 'buy-over' of Credit Suisse by UBS, which is seen as the route taken by Swiss regulators to prevent bankruptcy of Credit Suisse. This event definitely brought back memories of the fall of Lehman Brothers in late 2007, and fears of a larger scale collapse linger among the investors. The latest worry that arises in the market is the spike in the credit default swap rates of Deutsche Bank, the major bank in Germany. These combined effect of rising interest rates and the worry of more major banks possibly failing (black swan event) is going to depress the market for some time to come.
A possible breather from all the madness in the past month surprising comes from the big technology firms. It seems like the worries of possible further bank-run caused retailers to move their monies from bank deposits to other assets like cryptocurrencies and big technology firms like Apple, Google, Microsoft, Meta, Nvidia etc, boosting their share prices over the past month. This reiterated the importance of diversification for myself. In the last quarter of 2022, financials were the saving grace from the tech rout, while currently, things have turned around 180 degrees, with tech firms being the saving grace from the financials.
Despite the redness in portfolio value, dividends collected in the first quarter has been satisfactory, at SGD 3,681.50 from quarterly dividends from Mapletree Family REITs, and semi-annual dividends from Capitaland Integrated Commercial Trust and Parkway Life REIT. The positivity is that this amount is doubled the amount of dividends collected in the first quarter of 2022. This good news is coupled with the great news of a bumper dividend payout by Oversea-Chinese Banking Corporation and Hong Leong Finance in the next quarter. These news will help me to achieve my Barista FIRE goal at a faster pace.
For this month, the total portfolio market value rose slightly to approximately SGD 474k in this quarter, including a capital injection of SGD 2.4K, which is an increase of about 1.6%. This is definitely a consolation that the portfolio value did not plunge given the volatility this month, thanks to the consecutive green candles on the last few trading days of the month. Currently, I just hope that the banking crisis will soon be a thing of the past, but that will be dependent on the FED's decision in May and June this year. If they continue to raise interest rates, I believe the pressure on banks will return swiftly. Nonetheless, I am looking forward to the upcoming quarterly reporting, to assess the impact of current high interest rates on the distributions per unit of the REITs that are in my portfolio. Barista FIRE, here I come...!
SG Dividends Portfolio
US Growth Portfolio
Total Portfolio Value: SGD 474,272.73 (USD 1 : SGD 1.3310)
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