My investing strategy 2021

Earlier this year, I wrote an article describing my investment strategy for 2020. With this year coming to a close, let’s review its performance, lessons learnt and how I will position my portfolio for 2021.

Bogleheads’ Core Portfolio anchored around VWRA

In my core portfolio, which make up almost 60% of my total investment holdings, the majority of my holdings lie within VWRA – as described in why VWRA it’s my favourite ETF using Interactive Brokers as the cheapest brokerage available.

It is a total market stock index fund domiciled in London for maximum tax efficiency, has no bias towards growth/value stocks nor towards any specific region. In other words, it’s as neutral as it gets to just track the market portfolio.

I am going to use Google Finance to show you its performance this year:

On the bonds side, because the market plunged heavily in the earlier part of the year, I did not add more to bonds but instead added to stocks to take advantage of the cheaper prices.

The decision turned out to be excellent and the market rallied heavily over the next several months for a phenomenal return. I’m now looking to rebalance my bond allocation towards my target.

Overall, this bogleheads portfolio remains a core strategy that will be unchanged going into next year where simplicity really shines when it comes to investing.

Satellite portfolio with Endowus

I also set aside funds with Endowus in both their advised portfolio (60/40) and a fund smart portfolio with an Asian-tilt (also 60/40).

Despite my heavy DIY allocation, I like their portfolios because they are denominated in SGD – and they provide a good hedge against the rapidly depreciating USD in my other portfolios.

Rapidly depreciating USD against SGD. Source: XE

Furthermore, the total expense ratio – around 1% inclusive of advisory fees – when managing funds with them remain low compared to many alternatives, plus you get access to many great funds at lower cost.

Overall, the portfolio fared worst during the crash, but also recovered much swifter in recent weeks compared to my DIY portfolio – I suspect it’s the small caps/value stocks in their portfolios that had been underperforming at the start of the year but playing catching up now.

Going into 2021, I’ll continue to allocate funds to both my Endowus portfolios and their Cash Smart as a saving/war chest and use this to balance my lack of bonds in my other portfolios to add some stability in the prices.

Singapore REITs portfolio

S-REITs remained quite resilient despite the whole coronavirus situation threatening their existence.

I believe the government’s policies to subsidise rental rebates to tenants have played a part in stablizing the risks of tenant non-renewal to the REIT portfolios.

As we head into 2021, the risk is that if these subsidies run out and the situation does not improve, we can expect rents to fall further, further driving downward pressure on the prices of REITs.

They continue to pay out between 4% to 5% in dividends yearly and I like them for their recurring income that’s used to offset some of my monthly expenses like insurance premiums.

Since they don’t have much appreciation ability against stocks, I will continue to limit my exposure to REITs to 15% to 20% of my total portfolio value. I use FSM One (review) to dollar-cost-average into REITs every month.

Fun/Crypto portfolio

In the fun portfolio section, I’ve closed most of my single-stock positions including JD.com where I took profits off the table to re-align to my long-term investment strategy of broad diversification.

The alpha in my portfolio comes from the crypto market, where I have a portfolio with mainly BTC/ETH/PAXG and stablecoins farming tokens in various projects.

These tokens are stored in a mix of centralized lending and decentralized lending markets and going forward, I am expecting to maintain constant exposure to crypto at around 10%-20% of my assets (including stablecoins).

CPF investing with Endowus

So far, most of my investments with Endowus have been in cash portfolios. That’s because I’ve done CPF OA to SA transfer and have been accumulating capital for housing needs.

Now that Endowus has CPF portfolios with CPF OA which launched earlier this year, I am able to take measured risks with my CPF OA funds without irreversibly transferring them to my SA (supposedly for retirement too).

I published my mum’s CPF OA journey with Endowus earlier this year and also provided a second update in July.

Here’s another update on its performance:

The 60/40 portfolio did well enough to ride out the volatilty over the year, returned 7.72% year-to-date, far outperforming the 2.5% in OA despite the stock market volatility.

She’s stopped contributing funds as she still wants funds in her OA that’s not invested. So the flexibility in investments is really good, and I am going to utilize a similar strategy (probably 40/60 since I need funds for housing) going into 2021.

Concluding thoughts

Overall, there isn’t much change to my investment strategy going into the new year. Given this year’s stock market volatility and eventual recovery has reinforced the success of my investments strategies, next year will be even more interesting.

In a subsequent post, I will share some other strategies to grow personally (outside of finances – although finances still remain critical as an enabler for a better life).

Maybe you’ll be seeing more spiders walking alongside on this journey too, as I want to also talk more about other topics such as personal growth and entrepreneurship.

Sometimes the best ways to invest could be in yourself. More on that soon 🙂

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4 comments
  1. Just curious on:

    1. the allocation of the endowus part as u have 60% in vwra, 20% in SREIT and 20% in crypto?

    2. Why u have endowus advised portfolio of 60/40 since u have vwra already? I can understand the asia tilted portfolio.

    3. Also, u dont have any sti but only SREIT? R u buying REIT etf or individual REIT? If is etf, isnt syfe’s REIT+ a better option.

    4. On crypto, can share more on PAXG? I reckon GLD should be a betted option? On stablecoins, i am kind of interested in usdc, where do u stake yr stablecoins on?

    Happy 2021!

    1. 1/2. Endowus 60/40 as I like their SGD-hedged portfolios and if I find the markets a little high for me I like to put money here (it’s psychologically easier for me too). So if I add Endowus portfolio and VWRA together it’s closer to 75/25.

      3. I do have STI from long ago which I haven’t sold. Very small allocation here as it’s also SGD denominated and dividend paying (4%). I prefer REITs for dividends though. I am buying a REIT ETF. Syfe’s REIT+ is good but I prefer having custody of my REITs for the long-term, personal preference here.

      4. PAXG is tokenised gold held in trust by Paxos (regulated by NYDFS) and backed 1:1 in London vaults. I’d say GLD is ok too, but GLD has an annual expense ratio of 0.4%. PAXG has no custody fees, instant settlement 24/7 on the Ethereum blockchain and allocated via serial number to your Ethereum address. It also allows me to borrow on my Gold holdings.

      On stablecoins, I like USDC too, and PAX – both have trusted central counterparties. I either store them on lending platforms like BlockFi/Nexo or stake them in Curve.Fi.

      Happy 2021 too! 🙂

      1. 1/2. Does sgd-hedged really matter here? I do see usd going downward trend on long term basis although it is still the perceived safe heaven during crisis (relatively speaking).

        3. I often thinking abt STI and SREIT as i see it as more of a dividend income as well. The reason i stick with STI is that i also have big 3 banks for dividends and in 2 yrs time, REITS will likely make up 25-30% of STI.

        4. Sounds interesting, i will look into it in more detailed.

        5. PAX is new to me, i probably will just spread among 2 platforms for easy maintenance.

        Cheers!

        1. 1/2. You’re right, but if you want to retire in Singapore I don’t know if taking too much FX risk is a good decision. With that said that’s why I also retain both currency exposures.

          3. Yeah good point. But who knows how long banks will survive? You can bank without banks in future 🙂

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