Wednesday, December 11, 2013

2013 Portfolio Rebalancing (11 Dec)

Christmas sales is here (or at least for the Singapore market)! The STI is currently undergoing a broad-based correction, as stocks retreated to bargain level. SingTel and StarHub are approaching near $3.5 and $4. ST Engg closed at $3.8, while SGX is below $7. REITs are in a bad shape as expected due to concerns on impending rising interest rate, with industrial REITs bearing the brunt due to the current over-supply of industrial REITs. Cache closed at $1.06 (a level unseen since July last year), AIMSAMPI REIT is closing near $1.4, while Sabana REIT is at $1.035.

I took the opportunity/risk to rebalance my portfolio and trim off some of my underperformers. I divested SPH and reduce my exposure for Sabana REIT by half. I liked SPH for its stable dividend payout, but expect the yield to return to its historical average yield of around 5% without the special dividend paid this year for its SPH REIT spin-off. As for Sabana, I have concerns with the vacancy on its properties and management divestment of their stakes.

In place of the divested stocks, I have added QAF and AscendasHT. I have always wanted to have exposure to food-related counters, as I think they seems more defensive in nature (people still needs to eat during recessions, rite?). QAF has a long history with its Gardenia brand bread and pays consistent and increasing dividend. Based on my entry price at $0.825, yield should be at 6%. I decided to enter AscendasHT to diversify my REIT exposure across different sectors. With the addition of AscendasHT, my REIT sector would now include Industrial, Healthcare and Hospitality.

With the year 2013 drawing to a close, this may well be my last changes to my portfolio for the year. Going forward, my strategy will be to try to fix and hold the counters entered from past years, unless there is fundamental changes to the reason of my position entry.

I am also contemplating changes to the format to display my future portfolio updates. As I may be trading around invested positions in my portfolio from time to time, the accuracy of my average entry price and dividend yield might not very accurate. (For example, I entered a counter and received a dividend payment, but later divested and re-enter the same counter at different price.)


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