Portfolio Update for January 2025

This will be a relatively short post, just to update on the transactions for the month.

For the month of January, it is a rather volatile month.  The first half of the month was the extension of the mood back in December which was rather pessimistic.  The main reason lies with the worries of sticky inflation stemming from potential policies to be implemented by incoming US President Donald Trump.  This was worsen by the December US Payrolls, which grew by 256K, exceeding expectations by a huge margin.  In this period, good news is bad news, as the strength of the US economy means that the FED has no reason to cut interest rates in 2025 in the face of possibly looming reignition of inflation.  This is clearly shown in the bond market as the 10-year treasury yields shot up above 4.75% and reached a high of 4.817%.  All these caused the markets to pivot and began its downward movement.  Thankfully after the release of the Producer Price Index (PPI) and Consumer Price Index (CPI) numbers, sentiments improved slightly and markets stabilized, with slight retreat in the 10 year yields.

However in the final week of January, market turbulence returned due to the news released over the weekend from a China AI company DeepSeek, whose AI capabilities were on par with those from OpenAI, but had built their model on older chips and at a fraction of the cost.  This news were ground-shaking for top US AI technology and chips companies like Nvidia, TSMC, AMD, Microsoft and Google.  Indeed, once market opened for trading on Monday, these companies' share prices fell by between 2% to 17%.  These events inevitably caused my US Growth Portfolio to fluctuate.  To limit my exposure, I sold all my shares in Nvidia (for a small profit) and Palantir (to retain all profits earned to date) before trading hours to secure my profits.  Nvidia, in the short term at least, will be negatively impacted greatly as they may no longer command the premium they charge for the high end chips that they make, and if whatever DeepSeek does is replicable, then tech companies have no reason to spend massive amounts to buy the high end chips.  Palantir, on the other hand, may not be directly impacted by this news but solely because it is overvalued, I think this is a good time to realize my profits.  Looking back, decision made was great move for Nvidia but not really for Palantir, but all these are on hindsight.  Profits in the pocket are always great.

At the same time, after the sale with profits in pocket, I hope my portfolio can be a little more diversified, and move away from the tech-heavy situation.  As such, I initiated positions in VTV ETF, which is the value ETF with larger focus on financials, healthcare, industrials, consumer discretionary and consumer staples, which provides great diversification from my technology-concentrated portfolio.  With this reallocation of funds, being diversified between tech, banks and ETFs, I am comfortable with the volatility and not too worried about any possible decline in value moving forward.

Closer to home, I have done a lot more rebalancing this month to reduce my exposure to individual underperforming REITs, and the REITs sector overall.  The details of the rebalancing 'exercise' and the rationale behind the sale and purchase has been explained in this post.  With this rebalancing done, I believe I will just reinvest dividends along the way and probably not injecting any more capital into my portfolio this year, unless opportunity arises again.

In addition, some REITs and Trusts have reported their quarterly earnings, which means I can look forward to more juicy dividends in the coming months!  Performance by Mapletree REITs have been disappointing.  For Mapletree Logistics Trust (MLT) and Mapletree Pan Asia Commercial Trust (MPACT), distribution per unit declined by 11.1% and 9.1% year on year respectively for the quarter due to lower revenue from China and Hong Kong properties and higher expenses.  Thankfully, Mapletree Industrial Trust (MIT) has performed slightly better has their distribution per unit increased slightly by 1.5% year on year for the quarter due to increased revenue and net income.  CapitaLand Ascott Trust has also reported a decent set of results, with slight decline in distribution per share due to non-periodic items like repayment of foreign currency bank loans and medium term notes.  For now, I shall continue to wait for other REITs and Banks to release their results to see how much growth in dividends I can expect for 1st quarter 2025.

For this month, I injected approximately SGD 1.7K capital into the portfolio, and I used the proceeds from the sale of shares to buying the following shares:

SGX:    CapitaLand Ascott Trust

             ComfortDelgro

             Development Bank of Singapore

             United Overseas Bank

US:       Microsoft

             VOO ETF

             VTV ETF

On the other hand, I have sold the following shares:

SGX:    Frasers Logistics and Commercial Trust

             Mapletree Industrial Trust

             Mapletree Logistics Trust

             Mapletree Pan Asia Commercial Trust

             ParkwayLife REIT

US:       Nvidia

             Palantir

Total Portfolio Value has climbed slowly by approximately 1.3% to around SGD 635K including capital injection to reach a new all time high.  Moving ahead, I am happy with my current portfolio allocation, and will just hold on for the remainder of the year, and when opportunity arises, I will attempt to reinvest the dividends to compound my portfolio.  Seems like currently REITs are being hated by investors and of the 7 REITs I own in my portfolio, only CapitaLand Integrated Commercial Trust and ParkwayLife REIT's share prices remain at healthy levels, and others are lingering around 52-week lows.  As such, I will probably just not buy or sell any more REITs till the picture is brighter.  For now, looking forward to more announced dividends!