The first three months of 2019 has seen global equities rebound significantly following last December’s sharp sell-off, driven by a less hawkish Fed and perceived progress made in trade talks between the United States and China.
With geopolitical tensions and mixed economic data threatening to grind the decade-long bull run into a halt, I have decided to positioned my assets to be slightly more defensive in nature – scooping up larger stakes in SSBs, adding a little bond allocation from the recent SIA 3.03% issuance and building a larger recurring income portfolio while cutting new injections in global growth oriented portfolios.
- Continued building my SSB ladder each month – this will continue until I have six continuous month of interest income
- Continued my StashAway, STI ETF and VWRD monthly allocation strategy
- Invested a small sum in SIA 5-year 3.03% retail bonds – might divest this for REITs some time down the road
- Added Frasers Property Ltd and reduced my CapitaRetail China Trust allocation slightly – this is to reduce the China overweight in my portfolio and also include developers in my real estate mix
This has given my portfolio a slight defensive tilt with broad-market ETFs driving a greater percentage of my overall returns.
I will only include ETF portfolio performances in the review as part of my new asset allocation strategy from 2019.
If you’ve read my earlier posts on building a sustainable and long term ETF portfolio, my strategy includes a mix of global and local ETFs.
1) Freedom Fund at 36% risk level
- 6.7% (time-weighted)
2) Balanced Fund at 20% risk level
- 5.3% (time-weighted)
- 7.15% (time-weighted)
Of course, most of the returns was driven by the recovery of US equities markets.
With further uncertainty in the markets – Brexit, US-China trade war, US yield curve inversion, weak inflation and slowing economic growth – markets are expected to trade with greater volatility. By stocking up more defensively while remaining invested in risk assets, this bar-bell strategy can help position myself effectively in times of depressed prices.
I plan to continue dollar cost averaging into my ETF portfolios while injecting additional cash into these portfolios when they drop by more than 5%.