Feb2020 wrapup.

I bought S$48k worth of shares in Feb 2020 as prices looked attractive. In line with my New Year's resolution, I focused on building up my WQDV and VHYD holdings. At the same time, financial stocks appeared to be on sale, and I view them as less risky than hospitality/travel stocks on sale.

It is the first trading day of March 2020, and STI ETF remains above $3. So while this might be a correction, it is hardly a crash if STI ETF doesn't fall through $3. I'm still waiting to queue for ES3 at $2.99.

The FTSE100 level is attractive and I picked up some VUKE in Feb. I'll continue to buy more VUKE this month

Covid19 Crash

In my last post I thought I was done buying for the month, but the market has gone into correction mode. STI is still above 3,000 at end February, but I am preparing for it to go this level next week.

I have been buying a little bit of various counters this week, but at the same time sticking on my resolution to focus on ETFs, so more or less from Tue to Friday I have been adding small amounts of WQDV & VHYD via Stanchart.

I have added Sembcorp and Comfort Delgro as they both went under $2. While Sembcorp continues to freefall, Comfort Delgro's price is more resilient, underscoring its defensive qualities. European banks/financials also look attractive and I picked up more LLOY, Aviva, ING, and SAN. As the FTSE100 itself looks attractive, I added VUKE. Going forward, I think I should focus on VUKE instead of individual UK stocks.

If markets continue to fall next week and STI goes below 3,000, it would be fair to say that this is the sale that I have been waiting for. I will draw up a plan to buy at STI ETF at $2.99, $2.89, $2.79 and so on, probably exhausting funds at $2.00.

I'm using the same spreadsheet on google docs that I used in 2008-2009, so I can see my earlier workbooks recording my buying decisions then. Of course a few things have changed since 2008-2009:

• I have cheap access to foreign stocks via IBKR, SCB, FSMOne
• I have built up my passive income and paid off my housing loan, giving me a measure of financial security.
• My CPF funds have grown since then, providing an emergency warchest.

Strategy: Feb 2020

It isn't mid-February yet but I have continued my buying. In particular, I am looking at ramping up my position in Shell (B Shares). Shell price went down because of poor results but the investment thesis seems intact. The oil and gas sector is likely to be disrupted but I believe that Shell is in a good position to transition into an energy company (we'll always need energy even if we might not always need oil) rather than an oil company that dabbles in other types of energy.

I bought WQDV at the start of the month and just bought VHYD. So I'm glad I manage to stick to my plan to regularly DCA these 2 ETFs monthly. My 2800.HK RSP with FSMOne seems to be working. The account indicates that the RSP money has been put on hold but the units have not been delivered to the account yet, I guess that occurs after T+3.

Apart from this, I added a little bit of Sembcorp, Frasers HT, Comfort Delgro, and HSBC.

While N-Cov will certainly have an impact on earnings on companies in affected countries, the market is not crashing, perhaps buoyed by the US market which seems to keep on going up. While there is no sudden crash, a stock market adjustment to lower earnings (and likely lower dividends) should logically be inevitable, once there is a clearer idea of how badly earnings are affected.

So while I will occasionally top up small amounts of SG shares, my focus will be international shares and ETFs. I'll still buy STI ETF if it drops below $3, but I'm not counting on it. 

Dividends: Jan 2020

I report iShares/Vanguard Quarterly dividends in Jan/Apr/Jul/Oct for consistency. Some years the dividend is in late Dec, some years its in early Jan.

HK$ and A$ dividends also paid out in Jan but I follow previous practice in only graphing the 3 top currencies and subsequently, the total value in S$ terms.

Jan 2019 dividend was slightly higher due to a US$489 BHP special dividend. Excluding this special dividend, Jan 2020 saw a small dividend increase.

Jan 2020 report: Novel-Coronavirus

N-Cov is a worry for people as well as the markets. Everyone should take sensible precautions; though sensible precautions may translate to lower consumer spending as people spend more time indoors.

I carried out my plan to increase my ETF purchases. While I did buy individual stocks, I also started my regular ETF and accumulated the following ETFs this month

• VUKE  VanguardFTSE100 
• VDPX  Vanguard Developed Asia
• VHYD  Vanguard World High Dividend
• WQDV iShares World Quality Dividend
• VDCP  Vanguard US Corporate Bonds

Next month I will add the 2800.HK ETF to the list when I begin RSP via FSMOne.

My plan to do dollar cost averaging of ETFs every month is not affected by N-Cov. However I still have a "warchest" ready to be used if STI somehow falls below 3,000. But I'm not counting on it. 

On the individual stocks front, I decided to buy a little bit of Spanish Bank BBVA to further diversify my bank holdings and added more Telefonica.  Vodafone was hit by the bad news of the Indian Supreme Court upholding a huge fine. Still, I'll keep on holding it for the dividends.

Strategy: Jan 2020 (FSMOne RSP)

For 2020, I will be focusing more on ETF purchases and have identified a few ETFs that I plan to purchase monthly. 

VHYD Vanguard World High DividendYield

WQDV iShares World Quality Dividend

VDCP Vanguard USD Corporate Bond

LQDE iShares USD Corporate Bond
VDPX Vanguard Asia Pacific

2800.HK HKSE Tracker

The first 5 are in US$ and monthly purchases of US$1k each would add up to US$60k a year. The last ETF is in HK$ and I will apply via FSMOne to RSP about S$900 a month.FSMOne RSP appears to be very attractive - minimum HK$5 comms for monthly RSP means that small purchases of 2800.HK become very feasible. 2800.HK is a bit annoying when it comes to regular trading because it has a larger lot size of 500. FSMOne's RSP ignores the lot size and will even allocate you fractional amounts of 2800.HK.

There are a few other ETFs that I plan to top up on a quarterly basis. Other than that, the rest of the free cash I guess is for picking individual stocks and/or timing the market.

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More on FSMOne RSP
I really have to congratulate FSMONe with coming up with such an innovative low cost product. It is really amazing how they are able to cater on the same platform to (i) investors who don't mind paying platform fees but presumably want a 'high touch' service as well as (ii) cost conscious investors who go for the cheapest option. 

FSMOne ETF Regular Savings Plan allows you to buy a small amount of selected ETFs like the Tracker Fund 2800.HK and pay only a min comm of HK$5 (plus GST/exchange fees).  There are no other hidden costs to this and there is no lock in period. You can terminate the RSP anytime. Furthermore there are no penalties for failed RSP. 

For example, if you don't have enough money for a particular month in your account, the RSP simply doesn't take place that month but the plan doesn't terminate. It will carry on the next month unless the RSP is unable to deduct for 3 months. There is no penalty imposed. 

Some may complain that the selection of ETFs is limited (there are 38 that are eligible for RSP), but to me, this is still a good start and I'll be applying for 2800.HK RSP. If this is popular, I hope that more ETFs will become eligible for RSP.

2019 Interactive Brokers Portfolio Performance

Usually by this time people will be publishing their portfolio returns in the forums, but this year seems to be quieter. 

I guess many investors are quiet because they failed to beat MSCI World or equivalent World index  - including myself (the graph above shows my IBKR performance in comparison to Vanguard Total World Stock Index - because IBKR doesn't have an MSCI World comparison). 

Because I am overweight UK, someone even asked me how much money I lost due to Brexit. So perhaps I should count myself lucky that I didn't lose money this year. 

My interactive brokers graph shows a sharp rise in December due to the UK election result that helped narrow the gap but it was not enough

My 2020 resolution will be to buy more ETF and less individual stocks in order to reduce volatility