Sorry UOB, you launched the wrong China ETF

 

Just saw a finfluencer website doing an advertorial for UOB's A-share ETF. All I can say is sorry UOB, you launched the wrong China ETF. As for the website they are partnership with, they have to go along with the advertising copy and not mention that A-shares are severely underperforming vs HK/China ETFs. Everyday there is news of some a Chinese company like Xiaomi, BYD or Baba releasing some great AI or tech innovation in China. Any guesses whether these companies are listed in HSI or whether they are A shares? Looks like Lion-OCBC had the right idea when they launched their HSI Tech ETF though frankly, I find tech ETFs to be way too concentrated.

As I have mentioned in this blog. I have been doing regular monthly RSP of 2800/2801/3010 HK ETFs for the last few years because I don't want to look at my losses 😅, so best to just automate the buying process. Thanks to the recent rally, I don't mind looking at my China portfolio now as I should be able to break even soon. I bought more 2801.HK yesterday as well just in case there is a trade deal rally.

It's pretty obvious from this YTD chart that 2800.HK and 2801.HK are outperforming their A-share counterpart 2823.HK

Part of the reason can be found in this FT article. Mainland Chinese are buying more HK listed shares rather than A shares!

Sold my small CISCO holding

I initiated a small position in CISCO during the Pandemic. In other words, I picked the wrong video-conferencing stock as Zoom did much better. Nevertheless the profit for CISCO was decent and including dividends nett of withholding tax, the total gain since 2020 was about 40%. I'm doing some portfolio cleaning and it just doesn't make sense to hold US dividend stocks for the long term because of the withholding, so I sold them tonight and bought Vanguard Dividend ETF (VHYD) instead.

The next US dividend stock to unload will be McDonalds. I'm sitting on decent capital gain but withholding tax on dividends means I should exit all US dividends stocks as quickly as possible.

Posting this as a reminder to myself! 

Recording my CISCO purchase: Previous blogpost

 

Mid-Year Review

Since I was free, I manage to prepare the mid-year review of my portfolio and my health, so I decided to release it early. Maybe the market will crash right after this 😅

Portfolio: Doing well. Hit the 10% mark for the first time this year.

I've created a new category of "Xtra-Large size" holdings. Currently, only ETFs and SSB fall within this category. The closest individual stock to X-Large is LLOY.

T-bills have been removed and replaced by Fullerton SGD Money Market Fund and LionGlobal All Seasons (Standard) Fund

Cholesterol and Triglycerides: Good. LDL can improve further.

VO2 Max: Superior (at the borderline, so it fluctuates depending on whether I have a good set of workouts that week or if I'm tired)

Healthy weight. Focus now is on body fat.

Pimco Income Fund (any good?)

With T-bill interest rates going down, I had written earlier about my thought process in purchasing LionGlobal All Seasons (Standard) unit trust. 

To recap, I have a sizeable amount of cash and non-cash. Apart from maxxing out my SSB at $200k, I have cash in money market funds like Fullerton as well as cash in bank account. Finally, as I am almost at young senior status, I should start considering my CPF funds (above FRS) as near-cash (or at least a 5 year bond to hold between age 50 to 55).

So when my T-bills continue to mature, I should be on the look out for good replacements. Maybe a little more risk for a little more return.

Kyith in Investmentmoats has done multiple articles recently on PIMCO Income Fund. Not exactly sure why the love (or hate) for this fund in particular, but I guess it is a super popular fund so many readers will either be vested or thinking of investing in it.

I had never considered the fund before but his article piqued my interest so I went to have a deeper look. You can read Investmentmoats for more details on what the fund invests in, but after doing my own due diligence, I have decided the fund is not for me. 

Fundamentally, there's the issue of my portfolio construction. I'm not sure how to fit such a fund into my portfolio. It's basically asking me to pay the fund manager a bit more (1.05% expense ratio) and to accept more risk in the hope for better return. My view of fixed income is that it should be the lower volatility part of my portfolio, to compensate for the potential wild swings in the equities portion, so on that note, the PIMCO fund doesn't fit the bill for me.

As a second order issue, the data from FSMOne shows that its 3-year Annualised Volatility as well as Sharpe Ratio is worse than the LionGlobal fund. This is rather embarrassing for PIMCO. How can an actively managed fund be so volatile? 

As you can read from Kyith's article, a 6 month difference in when you entered the fund (buying in Jan versus July 2017) resulted in what could be 2.5% p.a. over 8 years turning into 1.35% over 8 years! This is not the type of volatility you want from a fixed income fund.

Conclusion?

I'm on the lookout for a lower volatility fund with decent sharpe ratio. I don't think the PIMCO meets those requires as its metrics are worse than the LionGlobal All Seasons fund. So I will stick with LionGlobal for now, but when I hit a certain amount of holdings, my usual practice is to diversify into a second fund, so I'll keep looking

 🐧🐧🐧

PIMCO Income Fund E Class JPY hedged and Admin Class  SGD hedged are two of the five best-selling fixed income funds on FSM

Comparing the SGD hedged class, it loses out to the All Seasons Fund in two critical metrics: Annualised Volatility & Sharpe Ratio

Higher Sharpe ratio means better risk adjusted returns. Lower volatility means exactly that, less volatile.

Buy stuff when they are on sale

 

Really good deal. Bought another pair as a spare. Their replacement, the VF4 is not as suitable for beginners as the VF3, with 5mm less cushioning and a more aggressive carbon plate shape.

When there's a genuine sale, you need to be decisive and press buy. Applies to stocks and also to shoes. 😎

FLCT: Time to buy?

 

Apart from the Frasers Centrepoint preferential offering, I haven't added to my REIT holdings for some time as there were more attractive offerings. After taking stock of the latest price moves and interest rate curves, I think its about time to get back into REIT buying. There is more upside than downside from here. 

So I've bought more today at $0.845, taking advantage of FSMOne's $8.88 flat rate commission and free level 2 data.

Australian beef and food products are just as good if not better than USA. If China finds USDA Prime more expensive due to tariffs (which are still there) than Australian Angus, it makes sense for them to buy more from Australia. I suspect increased trade between Australia and China will help the logistics sector which FLCT is heavily exposed to.

While I am a big fan of REITs, in Feb 2025 I felt that everything else was more attractive and more likely to move versus REITs which would be one of the last to move. As you can see from my blogposts, I have been focusing on the overseas market more. Now that everything else has started to move and become relatively more expensive, SG REITs are starting to look relatively more attractive. By the way, anyone who bought BABA in Feb 2025 (I didn't, though I have indirect exposure via 2800 and 2801) would be sitting on very nice returns.

Trade War ended before it really started?

 

I changed some HKD and used it to buy some 2800.HK last week, "just in case" China and USA actually agreed to a trade deal. 

They didn't agree to a deal, but reducing (not even removing) tariffs seems good enough news to move the markets.