My retirement portfolio. Please read Disclaimer.
To view portfolio return and updates, scroll down to the comments of this page and click the links that you are interested in.
Objective
- Saving for retirement
Time frame
- 25-30 years
Risk Tolerance
- I’m comfortable with 75% Equity and 25% Fixed Income.
Asset Allocation
Click to view full size (in pop-up window).
- 75% Equity
25% US
20% Europe
05% Japan
10% Asia Pacific Ex Japan (APEJ)
10% REIT
05% SGX stocks
- 25% Fixed Income
10% Global fixed income
05% Asia fixed income
10% Singapore fixed income
The above percentage numbers are derived from the ratios I use below. They are rounded to whole numbers.
- Equity Asset Allocation Ratio
Core : Supplementary = 80 : 20 = 100%
Core = US : EU : JP : APEJ = 45 : 30 : 10 : 15 = 100%
Supplementary = REIT : SGX = 15 : 5 = 20%
- Fixed Income Asset Allocation Ratio
Global : Asia : SG = 40 : 20 : 40 = 100%
Fund Allocation
Using Cash and CPF-SA. Prefer one fund per asset class for simplicity.
- Cash
Equity
US – Vanguard Total Stock Market ETF (VTI)
EU - iShares MSCI Europe ETF (IMEU)
JP – Lyxor Japan (TOPIX) ETF (JPN)
APEJ – Lyxor Asia Pacific Ex Japan ETF (AEJ)
REIT – REIT stocks in SGX
SGX – <Few old holdings from the past. Stop adding currently>
Fixed Income
Global fixed income – Legg Mason Global Bond Trust
Asia fixed income – ABF Pan Asia Bond Index ETF
SG – SGS Bond Ladder
- CPF-SA
Fixed Income
SG fixed income – CPF-SA money
A composite index comprises 75% of Growth Composite Index and 25% of Moderate Growth Composite Index. Both indexes include reinvested dividends and gains, and are available from Vanguard.
Rebalancing Guidelines
I use the rebalancing guidelines from the book “The Bogleheads’ Guide to Investing”.
- Use cash in-flows to rebalancing. Avoid rebalancing by selling funds if possible.
- To reduce transaction cost, consider delaying the rebalancing until you have held the asset for more than 12 months.
- The lower and upper limit for both equity and fixed income allocation is minus and plus 5% absolute to the target allocation, respectively. For example, if equity allocation is 70%, then the lower and upper limit is 65% and 75% respectively.
- The lower and upper limit for subclasses allocation within equity or fixed income portfolio is minus and plus 25% relative to the target allocation, respectively. For example, if 50% of equity portfolio is US equities, then the lower and upper limit for US equities is 37.5% (50% X 0.75) and 62.5% (50% X 1.25) respectively.
17 responses so far ↓
Portfolio allocation, December 2006 « The Mamak Stall Investor // Sunday, 24 December 2006, 8:47 pm at 8:47 pm |
[...] Portfolio [...]
Weisbrot Dov // Sunday, 7 January 2007, 5:56 pm at 5:56 pm |
Good day to you
Very very good blog, just doing the same since November 1999 Using Vanguard index funds and I’shares ETF’s.
I have one question for you.
I have a U.S broker, as we all invested for 40 or more year after my son will have to pay estate taxes. I wants to move my account outside from the U.S.
What do your think about U.S estate taxes.
Thank you very much
Painblanc
Portfolio return, year 2006 « The Mamak Stall Investor // Monday, 8 January 2007, 12:16 am at 12:16 am |
[...] return year 2006 = 5.97% Benchmark return year 2006 = [...]
choozm // Wednesday, 10 January 2007, 10:57 pm at 10:57 pm |
Hi Weisbrot Dov,
Thank you for your comment. Yes, U.S estate tax is a tricky issue. You can use term life insurance to cover the estate tax, as described here: http://tinyurl.com/ymmmju
Also make sure your portfolio is well diversified so that when estate tax is due and market crashes at the same time, hopefully the portfolio value will still be enough to pay the tax. Otherwise… read the horror story of Mr Tan whose concentrated portfolio (mainly US tech stocks) burst in the tech craze just after his estate tax is due, see: http://tinyurl.com/yhkc2w
Cheers.
Journeyman // Monday, 19 November 2007, 11:39 am at 11:39 am |
Do you not consider that at 27% you’re not overweight on US Equities. Two reasons I’d suggest; the likely continuation of a weak/subdued dollar combined with probable lacklustre US market performances for some time to come?
Journeyman
Singapore
choozm // Monday, 19 November 2007, 7:00 pm at 7:00 pm |
Hi Journeyman,
Thanks for your reply. The equity allocation is made according to the market capitalization. It is considered by some as overweight, may be because everyone is talking about weak dollar and coming weak US market. I don’t know… I don’t know much about economics, so better try not to make any forecast. Stick to the plan.
wayHOW // Sunday, 24 February 2008, 1:13 pm at 1:13 pm |
Hi choozm,
Firstly, I would like to thank you for your efforts in sharing your knowledge with budding investors. It might mean little to you, but websites like yours provide a little guiding light amidst the noise in the market.
I would like to ask you a question: From your portfolio, I notice that your equities are allocated by region (cap weighted). In your opinion, is that sufficient, without further diversifying into small and large cap funds?
choozm // Monday, 25 February 2008, 1:01 pm at 1:01 pm |
Hi wayHOW,
Welcome. The fund for each region is either a total market fund (large+small) or a large cap fund. So, VTI (total market fund) covers US large and US small. EUN, Lyxor Asia and Lyxor Japan covers large cap of Europe, Asia Ex Japan and Japan respectively. They are all cap weighted.
I prefer total market fund (e.g. VTI) and use large cap fund (e.g. EUN) when it is not feasible to get an equivalent total market fund.
Whether to over-weigh small cap (i.e. to allocate more to small cap and deviate from market cap) is up to you. This question is asked quite often, and I have given my comments in the two posts below:
http://forums.sgfunds.com/viewtopic.php?p=162711#162711
http://forums.sgfunds.com/viewtopic.php?p=193922#193922
choozm // Friday, 11 July 2008, 2:10 am at 2:10 am |
Portfolio review for 2007
Click HERE to view.
Ashwin // Wednesday, 6 August 2008, 3:28 pm at 3:28 pm |
Hi Choozm
I notice that you have Lyxor APEJ and Lyxor JP as well as Vanguard EM ETF. Isnt there an overlap? Also, if I were to treat Vanguard EM ETF as the only EM fund, is it right to assume 25% of portfolio (based on mkt cap) can be allocated to this
US – VTI – 45%
EU – EUN – 30%
EM – VWO – 25%
Am i missing something (e.g. NASH countries) in the VWO that I need to account for?
Thanks
choozm // Thursday, 7 August 2008, 12:55 am at 12:55 am |
Hi Ashwin,
I used Vanguard EM ETF because there was no EM index funds in Singapore. This allocation omitted the NASH countries. After Lyxor introduced APEJ and JP ETFs, I use them to include NASH countries and to reduce the US estate tax issue, and have stopped adding Vanguard EM ETF. This will omit some emerging markets. Yes, there is some overlap but not significant because my Vanguard EM ETF holding is small. I have posted the changes and my reason in Portfolio asset allocation update.
EM market cap is about 10%. So you have to decide whether to allocate 25% to EM. NASH countries and JP is not included in your allocation above. For global market cap distribution (2007), see this post One-liner for my global equity allocation.
Cheers.
Serendib // Friday, 19 September 2008, 10:02 am at 10:02 am |
Hi Choozm, have you ever had issues buying Vanguard funds or ETFs as a foreigner? I tried to buy VTHRX (Target Retirement 2030) thru Optionsxpress and was told by OX that the order was rejected by Vanguard and that the fund is closed to foreign investors. Appreciate your advice
choozm // Friday, 19 September 2008, 12:43 pm at 12:43 pm |
Hi Serendib, I have only bought Vanguard ETF through Optionsxpress and other brokers – no problem with that.
As for Vanguard mutual funds, I asked optionsxpress in 2006, they replied: “Singapore accounts are not able to purchase mutual funds. ” It looks like that it remains so. You might want to check with other brokers as well as with Vanguard.
panther // Friday, 30 January 2009, 8:52 pm at 8:52 pm |
Hi Choozm,
May I ask how you handle dividend paymout for
Lyxor Japan and Lyxor Asia Pacific Ex Japan. CDP would mail the dividend in USD cheque. Do you claim the USD check as SGD or deposit in some USD account to be used for future investment. I got a USD check from CDP and not sure which is the best way to claim it. Thanks.
choozm // Sunday, 1 February 2009, 11:27 pm at 11:27 pm |
Hi panther,
You can open a USD current account with most of the banks here to deposit the cheque. But they have a minimum balance requirement of USD 1000 – 5000.
I deposited the cheque from Lyxor Japan into my SGD savings account because the amount is very small and not worth the trouble to maintain USD 1000 in a USD current account.
My cheque was cleared at UOB on 23-Jan with a forex rate of 1.4938.
panther // Tuesday, 3 February 2009, 1:50 pm at 1:50 pm |
Choozm,
Thanks for your feedback.
As I had USD400 in cash with me (due to business travel), I finally decided to open USD account at UOB. I topped up the balance in SGD to meet USD 1k min requirement. I think, in long run, it is worthwhile to hold USD account for investment purpose. I have also decided to open an account at Saxo Capital with USD as the base currency. I plan to use Saxo Capital only for ETFs that are in USD. In this way, I think I will not get subjected to currency conversion when I get dividend payment and when I sell ETFs. Then, I will probably use DBS Vickers or some other brokerage to buy other ETFs in SGD.
choozm // Tuesday, 3 February 2009, 9:11 pm at 9:11 pm |
panther, thanks for the info. FYI, SGX stocks/ETFs bought through Saxo Capital are held in Saxo, not in CDP. So you can only sell them through Saxo.