3070.HK AI guided portfolio reorganisation

   

I have a large position in First State Regional China using CPFIS since the GFC. In 2008, there were not many options for CPFIS. Most of my money went to STI ETF but since I wanted to diversify, unit trusts with FSMOne seemed to be the only option. Due to inertia and the fact that I can't use my CPF for anything else, I have left it there. As long as it returned more than CPF interest, I guess I am content. 

However, as I have reached the 50 year milestone, CPF is looking more like 'real money' that has to be managed properly.  I am looking at an 80/20 allocation of equities/fixed income-near cash and CPF at age 50 is pretty close to cash, maybe equivalent to a 5-year fixed deposit?

At the end of the day, Martin Lau, the famous fund manager for First State, is not getting any younger and its inevitable that someone will have to replace him. Given the 1.73% expense ratio of the fund, it's time to take steps to exit. Should have done it earlier, but better late than never.

This means that I will sell the fund and the cash is refunded into CPF-OA, while I use my cash to buy a China focused ETF to replace it. I told Claude.AI what I was holding, including another existing dividend ETF 3110 and asked it about 3070 and to generate various comparison tables and analyse their holdings. Given that 3070 and 3110 most interestingly do not duplicate each other (their top 10 holdings are totally different), Claude concluded that they are complementary.

While 3070 has a slightly higher expense ratio of 0.77% compared to 3110's 0.68%, its manageable and 3070 holds the Chinese Banks whereas 3110 seems to be focused on industrials, and I am always a fan of financials (even though China banks may be called upon to do national service by bailing out State Owned Enterprises). The infographic above shows the reasonable P/E (the 'SOE effect'?) but more importantly the totally reasonable dividend payout ratio which implies that dividends will be sustainable.

So I am gradually selling my First State Regional China bit by bit and buying mainly 3070 but I will increase my monthly RSP of 3010 and 3110 as well.

Time in Market > Market Timing

 

Just recording today's headlines as an illustration of why time in market > market timing. As I have mentioned in my earlier posts on crash buying, I started buying the moment the market started moving downwards. It is impossible to time the bottom so those influenzas who have been advocating waiting for a big crash will probably have missed the boat, or at least missed the 5%+ upswing in one week. And as the previous studies have shown, missing the initial market upswing greatly reduces one's total returns, hence the saying time in market > market timing.

Sometimes it also helps to be lucky. Thanks to the Astrea 6 redemption proceeds of $50k+, I am deployed more cash into equities than I would normally have done.

Dividends Collected: March 2026

 

Dividends collected YTD ahead of 2024 and 2025. The key test will be how much I collect this month versus 2024 when I collected 25k.

April 2026: Holidays and a relief rally.

 

Advance Holiday Planning Bears fruit.

I have gone for my first Japan trip of 2026 though it was too early to see Sakura. I still enjoyed. My next trip in April will be after the peak Sakura season on a redemption ticket (redeemed during the sale) but there should be some left to see (I was also in Japan in mid April 2025). Thereafter, I have 3 more trips to Japan and Australia. Since I have booked/redeemed/paid for all the tickets, I fortunately do not have to pay the additional fuel surcharges that have since been introduced. I also wonder if the fuel surcharges will reduce the number of tourists visiting Japan but I'm not so confident of that because of the substitution effect. Many in the region may not want to fly to Europe because of the increased cost and/or perceived risks, and may choose to fly to Japan instead.

Hopefully the situation and prices will stabilise soon, because I still need to book  a couple more year-end holidays. 

Relief Rally? TACO?

Trump as expected TACO and announced that the war will end in a few weeks, which triggered a relied rally. I bought on Monday S&P500 ETFs listed in London before the US market opened and rallied hard. Notwithstanding that jump, I bought more today. As I have mentioned before, I feel that if my warchest is of a healthy size, I shouldn't stop buying the moment the market turned. Even though the price is going up, it is still lower/same as early March so I should still buy more because the market should be up further than today at end 2026.

Endowment Fund

 

ST Reference: Endowment Fund

TL:DR, a Doctor in her will gave $2m to a charity to set up an endowment fund. ST explains that:

An endowment fund is a pool of donations that organisations, such as universities and charities, invest for long-term financial support. The initial sum is preserved, and only the returns are used by the organisation.

I am posting this here for my reference so I don't lose this link as the idea of an endowment fund where the principal is forever preserved and you spend only the returns is obviously attractive to me and matches my own investment/retirement strategy of only living off my passive income.

What I found interesting was that this couple was obviously passionate about charity and had very little spending needs. Why did she wait till death to start giving away her $20m fortune? One hint can be found in this part:

The couple, who had no children, owned properties in Singapore and overseas. Despite their significant assets, Mr Chia said his wife lived frugally so their money could be used to help others.

They saved and invested their sizeable incomes in illiquid properties. So they probably had modest liquid assets suitable to their frugal lifestyles but a lot of property wealth. It may be a stereotype but the elderly seem to find it really difficult to 'sell property' (whether to downsize to a smaller more appropriate home or otherwise). So have to wait until they pass away before the property is sold.  

March 2026 Crash Strategy Part 2

 

Dow and Nasdaq are in correction territory, but S&P500 not yet. As I mentioned in my earlier post, I have been spending my $50k+ Astrea VI refund last week to buy various counters, so my main 'warchest' is still intact and ready to be used once S&P500 also hits correction territory, maybe next week. Because my bank accounts have daily fund transfer limits, I am going to do some fund transfers over the weekend so that my trading accounts will be ready for action on Monday.

I don't discount the possibility of Trump trying to make some sort of announcement to soothe the market, but the market might ignore it, especially with S&P 500 valuations still on the richer side.

I bought some ON Holdings because the price crashed so I am even more exposed to the sportswear market. But my main buys will be VWRD and VUSD/LSPU ETFs. I will probably initiate a position in Amazon next week since the price has corrected. As the saying goes, buy what you know (at a good price) and I have Amazon Prime and buy quite a lot of stuff on Amazon.

CPF account check

I have used some of my CPF to invest since 2008. By far the largest item I have purchased is STI ETF, which has done well of late and has been giving regular 3.5%+ dividends every year, which is higher than the 2.5% CPF-OA interest rate. I also have 3 unit trusts, all by First State: Bridge, Asia Growth, and Regional China, and 2 stocks in CPF: Frasers Centrepoint Trust and Comfort Delgro

Back in 2008, there weren't many options and I used unit trusts to diversify, otherwise I would be SG concentrated with STI ETF and stocks. If I had to start all over again, it doesn't make sense to buy any product with more than 1% expense ratio, but inertia has prevented me from doing house-keeping of my CPFIS account.

For 2026, my resolution is to reorganise my CPF holdings and to exit these high cost unit trusts which have done their job in that their CAGR is well above the CPF 2.5% interest rate. So before I clean up my CPF investments, I did a calculation of my CPF total: OA+SA+MA+CPFIS:  $1.68m.