Portfolio & Dividend Update: 6 September 2025

 Hi ! everyone, it’s time for my September 2025 portfolio and dividend update, as most of my HK/CHN stocks have already announced their 1st half 2025 results by the end of August, and I’m excited to share the latest developments in my investment journey. The markets have been a wild ride this year, with some pleasant surprises and a few sobering reminders of the need for patience. Before diving into the numbers, I want to take a moment to reflect on some timeless wisdom from one of my investment heroes, Howard Marks, whose latest memo, *The Calculus of Value*, offers a masterclass in navigating today’s lofty markets. After that, I’ll break down my portfolio performance, dividend updates, and some thoughts on the road ahead. Let’s get started!

 

 Howard Marks and *The Calculus of Value*: A Lesson in Stock Valuation <Link>

 

I’ve always admired Howard Marks, the co-founder of Oaktree Capital, for his ability to distil and digest complex market dynamics into clear, actionable insights. His memos are like a guiding light for investors, blending philosophy with practicality. His latest memo, *The Calculus of Value*, published in August 2025, is no exception. It’s a deep dive into the interplay between price and value, and it resonates deeply with my own approach to investing—focusing on fundamentals while staying mindful of market psychology.

 

Marks starts by defining the essence of investing: value is what you get when you buy an asset, driven by its long-term earning power, while price is what you pay, often swayed by investor sentiment. He argues that value acts like a “magnetic” force on price, pulling it back toward reality over time. In the short term, prices can fluctuate wildly due to fluctuations in optimism or pessimism, but in the long run, fundamentals ultimately prevail. This is a reminder to stay grounded, especially when markets get frothy, as they are now.

 

In *The Calculus of Value*, Marks expresses concern about today’s elevated U.S. equity valuations. He points to metrics like the S&P 500’s forward P/E ratio hovering near 23, well above historical averages, and the Buffett Indicator (market cap-to-GDP ratio) hitting record highs. Stocks are trading at 3.3 times sales, another all-time peak. These numbers suggest that the market is pricing in a lot of optimism, particularly around AI and the “Magnificent Seven” tech giants—Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla—which accounted for over half of the S&P 500’s 58% return in 2023-24. Marks also notes the resurgence of “meme stocks” and tightening credit spreads, signalling high risk tolerance among investors, which he sees as a warning sign.

 

Yet, Marks stops short of calling this a bubble. He contrasts today’s market with the dot-com era, noting that the current rally lacks the “nutty” speculative frenzy of 2000, and also, current tech stocks are generating decent cash flow and doing substantial share buybacks. Still, he describes the market as having moved from “elevated” to “worrisome.” His advice? Shift toward a defensive stance—what he calls an “Investment Readiness Condition” (INVESTCON 5), inspired by the Pentagon’s DEFCON system. This doesn’t mean selling everything, but rather tilting portfolios toward safer assets like credit investments ( for us, maybe more on fundamental strong value/dividends stocks), which offer contractual returns and lower volatility compared to stocks. He warns that high valuations often lead to low future returns, citing historical data showing that S&P 500 returns drop to 0–2% annually when valuations are this stretched.

 

For me, Mark’s memo is a call to discipline. It’s tempting to chase momentum in a roaring market, but overpaying for assets can erode long-term returns. His emphasis on value over price aligns with my strategy of seeking fundamentally strong companies with reasonable valuations and steady dividends. It’s a reminder to stay patient and avoid getting swept up in the FOMO that’s driving some of today’s priciest stocks

 

Portfolio Performance: A Stellar Year, But Staying Grounded

 

Now, let’s talk about my portfolio. As of 6^th September 2025, my portfolio has delivered a year-to-date XIRR (internal rate of return) of +20.35%, which I’m thrilled about. Before currency impact, it’s even stronger at +25.4%, largely because the Hong Kong dollar weakened this year. This performance has outpaced most major indexes, which feels great, but I’m keeping my expectations in check. Returns like these are exceptional and won’t happen every year. Investing is a long game, and I’d rather focus on consistency than chase one-off wins.

 

The standout driver of my portfolio’s performance has been the Hong Kong market. The Hang Seng Index (HSI) is up an impressive +26.7% year-to-date, and since over 60% of my portfolio is allocated to HK stocks, I’ve ridden this wave. After years of underperformance, the HSI seems to be experiencing a reversion to the mean. Looking back, my five-year annualised return for HK stocks is just +6.61%—not exactly stellar. This year’s surge feels like a reward for patience, but I’m not banking on it lasting forever. The HSI may still have room to climb toward its long-term mean, so I’m holding steady and staying patient.

 

In Singapore, the market has been a pleasant surprise. The Straits Times Index (STI) is up +13.7% year-to-date, buoyed by strong performances from the banking sector. DBS, one of the key components in the STI Index, has risen by +16.2%, reflecting the resilience of Singapore’s financial giants. Conglomerates like Jardine Matheson Holdings (JMH), Keppel Corp, Sembcorp Industries, and ST Engineering have been the real stars, posting gains of 20–30%. The REIT sector has also perked up, thanks to expectations of lower interest rates, which should ease borrowing costs and boost property valuations. I’ve been adding selectively to REITs & REIT ETF , focusing on those with strong balance sheets and sustainable yields.

 

The UK market, however, has been a bit of a laggard. The FTSE 100 is up a respectable +12.7% year-to-date, but my major holdings—BHP (+2.7%) and Shell (+6.1%)—have underperformed due to weakness in commodities like oil and iron ore. This has dragged down my UK portfolio’s returns, but I’m not too worried. Both companies are fundamentally sound, with strong cash flows and attractive dividend yields. I’m happy to hold them for the long term, as commodity cycles tend to turn eventually.

Portfolio Breakdown by Sectors and Market:

Overall YTD Return XIRR: +20.35%

( Exclude currency impact = +25.4%)

 Since Inception XIRR: +14.2% ( up 0.7% YoY )

Top 50 Holdings :

** I consolidate and combine various HK ETFs like 2800 Tracker Fund/  3070 Ping An Div HK ETF/ 3437 BOS CSOE ETF, and 3416 GX HSCEI CC ETF into one, hence you may see that the HK/CHN - value& Dividend  ETF became my top holding now.

Top 50 Holdings Returns YTD:

51-114 Holdings:

I sold 75% of my Bright Smart Securities (with a profit of around $68K) since the price has gone up by almost 500% (at peak) after ANTs took over as the major shareholder, and deployed some of the capital into other dividend stocks. Added 9 new stocks as above. From SGX ( Amova-STC AP ex Jpn REIT), LSE ( LionTrust AM, Polar Capital AM), HKEX ( PW MedTech 01358, Kingworld 01110, China Feihe 06186, Golden Throat 06896, Haitong UT 01905 and FE Horizon 03360 ).

 Dividend Update: Steady Income in a Volatile World

 

Dividends remain the bedrock of my portfolio, providing a steady income stream that helps me weather market volatility. In 2025, my dividend income has grown substantially vs last year as YTD has surpassed last year's total by +8.7% to $206,245.60, driven by higher payouts from Singapore banks / REITs and select HK holdings. Another "milestone " that my dividend has surpassed $200K mark, the first time in my record. We still have one more quarter to go, but since the 4^th quarter is a low quarter for me in terms of dividends received, overall dividends for 2025 may still increase by +12 to 15% based on last year’s payout trend. My overall portfolio yield is approximately 5.5%, which I’m comfortable with, as it strikes a balance between income and growth potential. I’ve reinvested some of these dividends into undervalued opportunities, particularly in HK / SG and UK dividend aristocrats. Net capital flow for my portfolio YTD 2025 is around +1.7%.

 

The beauty of dividends is their reliability. Even in years when capital gains are lacklustre, like the past five years in Hong Kong, dividends keep the cash flowing. This income has allowed me to compound my returns without relying solely on market appreciation. I’m sticking to my strategy of prioritising companies with strong fundamentals, those with consistent earnings, manageable debt, and a history of dividend growth.

Remember this chart I forwarded before? In the long run, the dividend received (right chart) is the one that keeps increasing and accumulating over time, while the paper's gain or loss will fluctuate according to market sentiment. In some good years, you may see it increase substantially, but drop significantly during a crisis. So, this year is just another so-called "good year", but it may drop again if another crisis hits, and one must be mentally prepared for that to happen.

Final Thoughts: Patience Through Market Cycles

 

Looking back at 2025, I’m grateful for the strong returns, but I’m not getting carried away. My overall XIRR since inception is 14.2%. While this lags behind the S&P 500’s performance in the last 5 years, I’m satisfied. My focus on value-oriented investments and higher dividend yields suits my risk tolerance and long-term goals. The U.S. market may dazzle with its tech-driven gains, but I’m content building wealth steadily through undervalued, fundamentally strong companies.

The Hong Kong market’s recovery is a reminder that investing requires patience. After five years of lacklustre returns, the HSI’s rebound shows how markets can turn when you least expect them. Howard Marks’ wisdom in *The Calculus of Value* reinforces this: focus on intrinsic value, avoid overpaying, and let time work its magic. Whether it’s HK stocks, Singapore banks, or UK commodity giants, picking the right companies and sticking with them through market cycles is what drives long-term success.

 As we head toward the end of 2025, I’m staying cautious but optimistic. Valuations are high in some pockets, particularly in the U.S., but opportunities still exist in undervalued markets like Hong Kong and Singapore. My plan is to keep hunting for quality companies, reinvest dividends, and maintain a defensive tilt, as Marks suggests. The market will do what it does; my job is to stay disciplined and let fundamentals guide the way.

 Hope everyone will have a fruitful end to 2025 and beyond! Stay invested, stay patient, and keep learning. What are your thoughts on the markets this year?

 

Cheers! Till next update ….

 

STE