4th Qtr 2020: Dividend and Portfolio Update

 

Time flies and we are in the last month of the year 2020 and I think most of us (investors) are busy calculating how much passive income or dividend we will be receiving in 2020. As we are still surrounded and suffered from Covid-19 pandemic and just have little hope on the vaccine’s development recently, market sentiment has improved slightly.

This year is not a good year for so-called “value investors “as most of the companies had either reduced or suspend their dividend pay-out due to economic recession caused by Covid-19. I guess most of us are suffering from getting lower dividend income but you will be happy if you are a “growth investors” with full of tech stocks in your portfolio as some of these tech stocks have gone up much by few hundreds % e.g  (Zoom Video+692%),(Salesforce.com +149%), (Fastly +400%), and also EV manufacturers ( Tesla +615%), (NIO +1467%), (Xpeng +640%) etc.

 As a value investor, my portfolio still in RED and underwater, guess the only thing I can do now is just keeps “waiting “…. as I have blogged about it previously :

 

A "Waiting" Game August 28, 2020


Some analysts predicted that there will be a sector rotation shift from “Growth to Value “in the coming years once the economy starts to recover from the pandemic. If that happens, it will be good for “value investors” like me, but I do believe that  tech stocks will continue to do well because of increasing middle-class population and demand for tech products/services.

Just look at below chart on how Semi-con and Chips maker’s performance for the past 10 years. I am sure demand for chips will continue to increase in coming decades, of course, there will be a dips from time to time.


<Image credit : YCharts.com>

You may notice that I seldom ( or rather lazy to ) update my blog post since past few months and in fact, I don’t have much to update, I am not a day trader who needs to stare and look at the screen to monitor the price closely. Since rebalancing my portfolio in early April, it remains almost the same except increasing a bit more to my current positions and adding two more counters ( i.e GSK PLC and Legal & General Group PLC ) into my portfolio.

 Even I am not writing any blog post, but from time to time, I will be posting some articles or videos on my Facebook Page just for reading and info.

 Please do follow me by clicking the Like Page button on the side panel(left) of my blog or simply click below link to access my page.

 

Like & Follow Me on Facebook <Like Page>

 

https://www.facebook.com/STEsg50

 

Below are just a few examples of articles and videos I have posted in my Facebook Page which I think is good for our info and reading. The topics would cover from personal finance, macroeconomic policies or some other matters related to value investing.

 

How Unusual Is The Current Drought For The Value Factor? <source: capitalspectator.com>

   

Is The Fed Stuck With "Forever Stimulus"? <source: zerohedge.com>

  

Investors Need to Become More Comfortable With Volatility in Their Portfolios <source: awealthofcommonsense.com>

 









Market Update :




Along with other world market indexes, STI rebounded strongly from Oct by around +15.6% after a series of good news on Covid-19 vaccine development, as usual, increase mainly contributed by SG 3 Banks. STI is still slightly below -1SD, which is not high in long term valuation but of course not as “cheap” as in March 2020 where it hit close to -2SD. If the market situation continues to improve, we may see STI moving up to the long term mean level which is around +19% from the current level. Of course, nobody knows, let’s hope for the best to come !! stay positive :D

As for FTSE ST REIT index, since it had rebounded strongly earlier from March low, for this round, it only up by around +7% from Oct 2020, moving quite closely towards long term mean level.











Nobody knows where the market will be heading next, some will be very pessimistic and some are optimistic, depending on how one sees the future and things develop post-Covid-19 era. Some may still hold much cash in hand and they might be right as market is “random”, millions of possibility that could affect the markets movement, not only news from Covid-19.

Your risk tolerance and assessment of the future will determine how much cash you would like to hold, till the “tipping point” that allows you to sleep well at night.




<Image credit : Azquotes.com>



4th Qtr 2020 Dividend & Portfolio Update.




Total dividends received in 4th Qtr 2020 = $29,678.5 which is lowest since 2013 and vs $41,435 in the same period last year.

Dividend in 4th Qtr mostly from Banks and REITs from the SG market as you can see from my top 5 dividend stocks in my portfolio. Also, there is advance distribution received from Capital Retail China Trust & ARA Logistic prior EFR ( Equity Fund Rising ) and clean up distribution from Capital Comm Trust of total $3988.3 ( which I am not supposed to receive in this Qtr).

 

Total Dividend & Interest receive in 2020 = $172,068 ( vs $184,906 in 2019)  which is about -7% reduction from last year.

Total Dividend by Market :

SGX ( $100,830) = 58.6%

HKEX ( $57,56 ) = 33.6%

LSE ( $10,206 ) = 5.9%

KLSE ( $3,276 ) = 1.9%

 

Majority of my dividend income still come from SG market as this form the base of my portfolio ( stocks like REITs + Banks ), about 36.8% ( excluding HKG and China Banks ) of my total portfolio.

Although dividend collected from SG REITs & Banks been reduced substantially but overall it had been mitigated by stable dividend from HKEX counters as most of the property/utilities and banks are either maintain or reduce slightly on their dividend pay-out. Of course, one thing to take note is that dividend from HKG stocks some are for-profit from FY 2019 which pay in mid-2020 after FY closed in Mach 2020. Dividend from HKG may reduce in 2021 given poor financial result in FY2020.

The overall dividend only reduced by -7% as compared to some market projection of -10% to -20% also partly because of more fund injection into equity from my bond holding in 2020, as I am now having less than 5% of cash/bond in my portfolio.

Having a diversified portfolio across different sectors and regions is important to mitigate any shortfall or correction from a certain industry. Of course, during such global pandemic which affects every sector of industries, all company will be affected, but at least the scale will be different, some worse, some lesser. Some may still be able to maintain the dividend pay-out if their business been affected least and with strong balance-sheet (e.g without much debt).

I know some may think that having 60 stocks is too many, as studies have shown that any diversification more than 20 counters will have” diminishing return “ effect on the overall effectiveness of diversification. OK, I am a bit “Kia-shu” and “Kia-Si” in that sense…… :D

On the other hand, if 1 or 2 counters in my portfolio went “kaput”, think I am still ok …







Top 30 Holdings ( 78.3% of portfolio value )




31-60 Stocks ( 20.3% of portfolio value )



Remaining 1.4% = HK Tech ETF

 

Congratulations !! for those invested in TECH / EV sectors in 2020, you must be sitting with very good profit YTD if you are one of them.

I still have quite low Tech or growth stocks in my portfolio which I intend to increase eventually as you may notice that demand for e-commerce/tech services still growth in double digits percentage. The biggest challenge in investing in tech for me is the “ huge fluctuation” on the share price of these stocks ( my heart can't take it ), and  also for such companies, the “failure-rate” is quite high and eventually, it may have just a few “winners take all” companies that survive like current MAAF+G after the dot-com bubble burst in 2000. Therefore, I would rather go in with ETF into this sector, like (3067 -HKEX ), ( KWEB-AMEX, which I bought before the launch of TECH ETF in HKEX ). I am also considering to add semi-con ETF ( iShare SOXX ) in future.

 

OCBC launches first (HKG) tech ETF in Singapore <source: funselectorasia.com>

 

For those who do not have access or do not want to invest directly into HKEX, above is good news as you will be able to buy similar ETF which track the HK Tech Index via ETF to be listed on SGX on 10 December. But please DYODD, this is not a recommendation to buy or sell, please invest base on your risk profile and tolerance.

 

 

Cheers !! Till next update, hope we will have more and more good news on vaccines and therapeutic in regards to Covid-19 pandemic, so that our life will return to normal soon.

 

Stay Safe & Stay Healthy !!

 

STE

 

 

 

Investing is about “ Long Term “ and the “ Power Of Compounding “






Comments

  1. Wow $172K dividends in one of the most difficult year after the great recession, respect ... don't play play!

    ReplyDelete
    Replies
    1. Hi Yaruzi,
      Thanks , but overall portfolio still in RED as dividend not be able to cover the lost on capital...this year will be the year for " growth investing " !! :D
      Cheers !

      Delete
    2. Every dog has it's day, I'm also rebalancing my portfolio so it captured opportunity in growth, dividend payers vs turnaround.

      Delete
    3. Yes, indeed , it is important to have both value and growth stocks in our portfolio...and yah.. hope our day ( as value investor now) will come sooner rather than later... :D
      Cheers !

      Delete
  2. I think your portfolio tanked the covid19 pandemic very well. Your annual dividends is amazing!

    ReplyDelete
    Replies
    1. Hi MIM,
      Thanks, yah the dividend received help to some extent , but overall still not be able to cover the losses caused by this pandemic... :(
      Anyway , let's hope things may improve and recover soon.. :D stay positive !
      Cheers !!

      Delete
  3. Amazing gains despite Covid! Just to side track would you be looking at hospitality assets in the next 1-2 yrs to leverage its recovery (if any)?

    ReplyDelete
    Replies
    1. Hi JL ,
      Thanks for the comments , for time being I will still avoid hospitality assets/reits , it could be a very good " recovery play " ... but since I am not sure how the hospitality sector will perform in 2021 as vaccine roll out may take times and could be much longer than we expect. In view of such uncertainty , I will still avoid it for time being.
      Cheers !

      Delete

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