A New Asset Class…

leesoonkie
Mar 9, 2018
1 min read

Usually boring but in recent days heart stopping.

Given the excess liquidity from redemptions of our high yield portfolio, excess monies were deployed into the stock market. The first investment was made in end August last year. Total number of stocks varied between 12 to 15.

Total return achieved was 11.33% flat from 31st Aug to 13 Feb 2018. In comparison, the STI, excluding dividends was 4.19%. The comparison is not really valid given the short gestation period and also the shares were bought over a period of time. As compared to our high yield loan portfolio, IRR p.a. was commendable at 40.23% p.a.

While the performance was encouraging, it is unlikely to be sustained over a period of time. We were fortunate as some stocks hit our target price just before the stock market correction and we exited the positions accordingly. Valuations are more realistic now given the corrections and hopefully we can build up our new asset class.

One other piece of good news, the expected dividend income from our stocks covers the company’s operational costs now.

However it is exhausting as a self-managed fund, the sheer amount of information and reports to be read and analysed is challenging with conflicting analysts reports and news. While we save on management fees, custodian, dividend handling fees and what-not fees, we may look to work with professional fund managers in future when it becomes too much to handle.