It’s been 2 months since my last post on the aggressive portfolio that I’ve started in May’13. And below is the snapshot of the latest holdings allocation and the performance each fund.
In summary, the overall aggressive portfolio has gotten me 15.29% return since May’13, about 7 months.
In terms of assets allocation, ~55% is equities, ~21% is fixed income and ~22.2% of cash. The reason for the cash holding to be such high is mainly due to the strategies employed by fund managers to avoid fixed income securities which has performed poorly in the 2nd half of 2013. Perhaps, it was partly due to the fund manager to realize gains from small-mid cap equities that have had a great bull run in the year.
2013 was a year of bull on small-mid cap equities, and PRUSCAP:MK alone has given me a return of 42.12%. And it would have given me 64.01% positive return if I’ve started holding since Jan’13.
On the other hand, fixed income securities face a strong bearish pressure in the 2nd half of the year, and this is evidently by the return of RHBIBND:MK. I believe this is mainly due to the news of possible Fed tapering on QE3 since May’13. It has only given me a mere 1.28% return in 7 months. On the side note, I would continue holding it based on 2 simple reasoning:
- QE3 tapering has started, the emotional fears and market sentiments have already priced in since the major pull down on fixed income, the price will eventually rebound.
- Moreover, this is an Islamic market (non entertainment, gambling..etc), its focus of companies would most likely benefited by the global market rebound and purchasing power of consumers have returned.
For OSKSBAL:MK, which I’ve chosen to increase my holding in Aug’13 has done pretty good, giving me 11.04% return in the same period of time. In Nov’13, the cash holding is 43.16% (RM 5.05 million) and I believe this is a measure by the fund manager to avoid the unattractive fixed income market with unnecessary purchase of fixed income securities. I’m currently waiting to see its latest report and what the management has done with the 43.16% of cash since Nov.
Finally, the only RED in my portfolio, OSKKIDS:MK. Based on its report at end of Nov’13, it has 30.17% of fixed income in its portfolio and 16.79% of cash holdings. This can be the very reason why its performance has been lagging so much to other funds. I’m curious to see what the fund manager has done with these fixed income and cash holdings in the next report. This would help me to decide to continue holding it or not.