Portfolio Optimisation
September was a rather non-eventful month in the stock market. However, I have continued to optimise the SRS Fund in its transition from a finance and REIT-heavy fund to an all-weather fund with less volatility.
The SRS Fund is up 4.75% year to date versus the STI negative 1%. With the normalisation of the yield curve especially on the long end starting to work its way up, I expect volatility to heighten as we enter into October.
The SRS fund recorded 2 notable transactions in the month of September. First, is a new foray into the manufacturing segment with Venture Corp. Venture is not a new name on the scene and has a proven track record of delivering respectable high return on invested capital. With a strong balance sheet and an experienced management team, I trust that Venture’s investment me
Second, I have cut half of the Funds position in SATS. Despite being bullish on the revenge travel theme, I quickly realised a mistake was made in position sizing. Statistically most mergers fail and this is especially so for a company that made an acquisition that is much bigger than itself.
Portfolio Segments
Investors can see the diversification in the works. Despite being heavily invested in local banks, the SRS fund managed to trim its REITs position decisively when Mr Market was in a good mood. This reduced the REITs composition to less than 20% of the SRS Fund under the property segment thus reducing the drag on performance.
Dividends
The dividend received at the end of Sep stood at $5253.30 and is comparable to the same quarter in 2022. The SRS fund is on course to receive record dividends with no reduction in portfolio value which not many investors can boast about in this climate of rising interest rates.
SRS Fund Value
The SRS Fund shrank slightly to $373,241.15 in the month of September. Weakness in the general market continues to soften the fund as of this writing. I expect the fund value to remain at current levels until the end of the year. With Q3 earnings reporting coming up, I would again expect local banks to announce stellar results with REITs further cutting DPU and businesses trying to pass on cost inflation to their customers.
Cash Levels
Cash level rose after selling half of the fund’s position in SATS. I will look out for further opportunities to cash out underperforming positions as the rise in long-term interest rates is starting to offer a compelling alternative like holding cash in the portfolio.
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MYNEST.SG 