Sunday, April 12, 2015

Modest Gain in my Unit Trust Portfolio

I seldom keep track of my Unit Trust portfolio as I have spent extensive time to construct it at the onset. It is engineered to pay monthly dividends as a form of consistent profit taking and ideally, the $600k portfolio should be paying 5% dividends and having 0% growth. It was constructed with a balance portfolio in mind, diversified between equities and fixed income; invested across different currencies, geographies and having negative correlation with different asset classes such as US treasuries, equities and soft currencies. 

By and large, the portfolio exhibits low volatility month on month basis. I am actually please to see negative positions as this means that there are some form of negative correlation within the funds. I will be worried if everything is positive (or negative!). 

The investment horizon for the Unit Trust  portfolio is for extended period and rebalancing is not required (ie selling underperformers and buying more winners) as I ignore market noises and continue to receive the monthly dividends. I will opt for dividends reinvestment should a bear market comes. 

The Unit Trust portfolio excludes my CPF and SRS funds. I still hold a concentrated portfolio of Singapore equities comprising of 12 stocks.