STE Smart Beta Update : 30th Aug 2017
Time flies , It has been more than a year after my first published of STE Smart Beta concept and bench-marking against STI Index.
FYI , I have started my STE Smart Beta on 28th Aug 2016 with capital of $100K with equal weighted investing in 14 stocks which fall under the criteria of PE<10 or Dividend Yield >5%.
You may find the detail in this link (here ).
Now , let’s look at the result of STE Smart Beta vs STI Index from 28th Aug 2016 till 25th Aug 2017 :
It seems that STE Smart Beta has out-performed the STI Index by 5.7% exclude dividend.
YZJ Shipping clearly out-performed others with outstanding returned of 103% and follow by GLP (75%) , DBS (35%) , UOB (31%) and OCBC (27%).
Banking stocks have shown good returns in 2017 till YTD which have greatly contributed for this better performance vs STI Index.
SPH and Star Hub were among the worst which require no further explanation as we knew very well on their respective challenges.
Re-balancing of STE Smart Beta Portfolio :
As expected , total stocks selected under the STE Smart Beta criteria reduced to 9 only as compared to 14 previously in view of better performance from banking counters which made the 3 Big Banks being excluded from the index.
With the inclusion Jardine Matheson into STI Index in Sep 2016 and the PE of 7 at current price level make it into the list of STE Smart Beta Index. The other counter included into the list will be CapitalLand with PE of 9.6 in view of better earning sighted in 2017.
As usual the total value from the portfolio will be equally distributed among these 9 counters in this re-balancing process.
Let’s see how it turn out next year , will it be able to beat the STI again in 2018 ?
“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently.” By John Bogle