The strategy for 2025 has more or less stabilized. There are a few key segments in tracked portfolio:
1. Income-Earning Stocks (Primarily Banks)
The first segment consists of income-earning stocks, mainly banks. These stocks have strong earnings and pay attractive dividends, making up more than half of the portfolio’s allocation. Currently, they are relatively cheap given the present risk levels. Whether this will change in the future depends on technological or regulatory impacts, if any.
The main position here is DBS, which has performed well so far this year. OCBC has been somewhat muted but remains a reliable dividend payer. Both positions may be reduced during rebalancing. Each time this happens, the overall dividend yield is affected, as replacements typically offer lower yields. There is a cost to this approach.
2. REITs
The second segment is REITs. While there are several REITs in the portfolio, only two have core allocations: FCT and MIT. Both are defensive and strong dividend payers. Interestingly, MIT has been offering high yields for some time. In recent rebalancing, some bank stocks were sold to increase FCT holdings, primarily to mitigate risk. While their earnings can't compete with banks, their businesses are much more stable.
3. US Big Tech
The third segment focuses primarily on US Big Tech. These companies generate substantial earnings, and I expect their stocks to consistently outperform the SGX market over the mid to long term. As mentioned earlier, this is a "peanut butter" strategy, with the latest acquisition being Apple (AAPL). Allocation to this segment has increased to over 13%, with a 15% target in mind, depending on available funding.
Within this segment, weightings vary based on the probability of success. For example, Microsoft offers consistent growth expectations, while Nvidia offers explosive, but less predictable, returns. With six stocks in this category now, I have built a solid US Tech foundation. Now, it's a matter of seeing which "horse" will race towards the inner circle!
4. Other Opportunities
The final segment is the "Other" category, which is more opportunistic and focused on trading income. Among all segments, this one will see more rebalancing and churns whenever opportunities arise. From past experience, the Big Tech segment doesn’t perform well in this trading strategy, which has driven my cost structure relatively high. Biggest winner in this category is Keppel. Poor decision is Sheng Siong which i sold off too early.
The Gold ETF is in a bottom-building phase. BABA SDR is another holding I like, as it avoids the need for currency exchange, though returns have been disappointing. Both positions are small and mainly serve diversification purposes. I am still exploring or waiting for the return of iBit.
Performance and Lessons Learned
Year-to-date, the portfolio has achieved an XIRR of 5.3%, using December 31, 2025, as the end date. The income segment remains strong, and I hope the market will be kind enough to allow additional funding for US Big Tech.
One key lesson learned is that it is not meaningful to keep large amounts of USD in the account due to currency exposure. The USD has been weakening for the past few months and is unlikely to strengthen in the near term. Therefore, it’s important to invest available funds in stocks whose price appreciation can offset currency depreciation. As a result, US Treasury and US income stocks are less logical for this portfolio. As of today, US Tech stocks, even after accounting for currency weakening, are showing solid five-digit profits.
Hope you enjoyed my sharing!
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2025-0705
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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.
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