Another relatively quiet week in June as the world gets ready for a Northern Hemisphere summer break – which they sorely need after all the Covid-19 lockdowns! The portfolio is still gyrating each day with a 1% move up and then down but slowly we hope to see the payoff with the companies selected taking turns in doing well. What matters is that the overall results are building up positive gains due to the benefits of diversification. The two screenshots do have a slight value difference between them because the first one is from Interactive Brokers (the real account below). What’s important to look at is probably the “Net Liquid” column of $111,963, relative to the $110,000 initial deposit there, which tells me we are about $1,963 ahead now. What I find strange is how inconsistent they often are with two different values shown for the USD investments (i.e. Tesla) of $6,155 at the top “Market Value” section, and then $6,170 “Mark Value” below the “Positions” section?
Not showing the orders as the only recent addition was Austal (ASB at target price of $2.01) because they have been sold off more than I think they should of and therefore it could have a bounce back to more reasonable values. It has already moved higher but let’s see what happens in future?
The second screenshots (using the ANZ / CMC system) allows me to both research and control the portfolio better – including dealing with the accounting aspect. Note the primary difference is the way I keep track of the Newcrest Mining (NCM) shares due to the share option being exercised. We are mainly down due to Gold being sold off recently but I still believe that it will be an asset that will protect us if inflation does go higher than the Central banks expect due to having interest rates very low (again due to Covid-19’s effect on the global economy). Of course, we will not get much warning until it actually happens and that’s why it’s important to have it now – just in case?
In comparison with the above two brokers, the Bell Direct system looks quite good and I am pleased with their presentation ways. Good news is that we are close to recovering the fees charged by the broker and managers in a relatively short period. Let’s hope they continue their performances so that we can enjoy other things in life and let them focus on managing investments that we would struggle with – especially overseas!
This week I promised to give more details about these funds and the reasoning behind the selections. So it’s important to note that each fund has unique code issude by the ASX which is similar to how they manage shares in companies. They are as follows:
ACA01 = AMP CAPITAL FUNDS MANAGEMENT LIMITED AMP CAPITAL EQUITY INCOME GENERATOR – they are solid performers in the local share market dealing with larger and mature and dividend paying companies. They tend to do well throughout the cycle as many investors like the income aspect but also when caution becomes important because of inflation fears. So as small companies were recently sold off, these companies do better. Naturally, when interest rates go down (with inflation fears), these are not as attractive as smaller companies with their expected growth benefits (as they generally don’t pay any dividends).
ACA04 = AMP CAPITAL FUNDS MANAGEMENT LIMITED AMP CAPITAL GLOBAL PROPERTY SECURITIES FUND – as the theme of global economic recovery gains momentum, inflation always helps property markets too. Of course, instead of us trying to find properties ourselves, it’s much better to leave it to professionals that have people searching for these on our behalf. These managers can search accross Asia, Europe, USA and other countries and generate good returns if they do well. Of course, only time will tell but they have a good track record.
IAA = ISHARES ASIA 50 ETF ISHARES ASIA 50 – this Exchange Traded Fund (ETF) replicates the top 50 Asian companies which are well poised for the global recovery. We hope this does well over the next year or two and may then take profits, if it does too well, because there are always some setbacks (i.e. something is eventually bound to go wrong).
UAM14 = UBS ASSET MANAGEMENT (AUSTRALIA) LIMITED UBS EMERGING MARKETS EQUITY FUND – as the name says, these managers focus on emerging companies in any country. It’s very difficult to try to find an investment in say Vietnam, South America, Indonesia, or other places from where we are. However, there are often many great opportunities there for us but currency risks becomes another issue to deal with. For example Malaysia (and some other countries) have very strict currency controls and it’s difficult to invest there. These managers have the ability (through their size and regulatory approvals) to do things that we cannot. So it’s best to let them handle these and diversify our investments even more. Again, there may be times when these will not do so well and we need to think about the global outlook then monitor the managers carefully throughout the year if things are changing from what we expected.
Finally, there’s very little happening with crypto’s and it seems they are going nowhere. I think we could be waiting months before there’s any real action again in this area (maybe after summer?). Naturally, it’s when things go quiet that we could suddenly see it move up again and become “hot news” because those who recently lost money are probably sulking. However, we need patience and time to work in our favour.
