My 2007 Investment Strategy
Despite stock markets in the region being at record highs, and some sort of global correction looming, I've decided to put some money in unit trusts. It's forced saving, as I told F. today. If I lose money, I'll have to hold on to the investment longer, which means I postpone cashing out and spending the money -- which is (voila!) saving.
The problem is: What funds should I buy? After careful and serious consideration, I've decided to go with the countries at the top of my Beari Index -- a ranking of regional countries according to how cute the bear-chubs there are. I selected the funds for each country with expert advice (well, from Fundsupermart.com, a great site everyone). Over the months, I'll be tracking the returns to show that you can, indeed, construct an investment strategy based purely on boyish looks and BMI.
My "Beari Index" Portfolio
1. JAPAN (Henderson Japanese Equity - $1,500)
The Henderson Japanese Equity fund has beaten its benchmark index, which is the MSCI Japan Index, for every calendar year from 1999 to 2004 (except for the year 2000). It is one of the top five performing funds for the year 2004 and enjoyed consistency in terms of performance for the past 4 years. The performance of the fund tends to be less volatile as a substantial portion is invested into large Japanese companies.
Valuations of the Japanese companies still remain relatively attractive in comparison to historical valuations. The valuation for Japan tends to be higher than other regions such as the US and Europe due to lower interest rates in Japan. As over 65% of Japan’s economy relies on domestic consumption, the solid recovery in consumer confidence since last year may constitute further upside potential. Nevertheless, exports could still be affected by a possible slowdown in global demand and strengthening of the yen. We would recommend investors to include a Japanese fund in their portfolio to remain globally diversified.
2. TAIWAN (Lion Capital Taiwan - $1,500)
We expect the Taiwan market to experience short-term volatility due to the increased inflow and outflow of foreign funds. However, we like Taiwan due to its relatively low valuation, and also because it has a strong exposure to tech-heavy stocks, such as the semi-conductor foundries (UMC and TSMC). With the increase in global demand for technology products, Taiwan's electronic exports are expected to continue seeing strong growth.
3. HONGKONG (HSBC Chinese Growth - $1,000)
The HSBC Chinese Growth fund is the best performing fund in the past 4-year, 5-year and 6-year periods ended April 2006. The annualized performance of the fund for the past 3 years was 35.5% as at April 2006. In 2003, when the Chinese market experienced a run up, the fund delivered a 100% return, placing it as the best performing fund in the China equity fund category. Last year, the fund outperformed many of its competitors delivering a 38.64% returns as at end of April 2006.
This fund mainly invests in companies listed on the Hong Kong Stock Exchange with underlying business in China. With further market liberalization in next few years, the quality of companies is expected to continuously improve.
4. SINGAPORE (Aberdeen Singapore Equity - $1,000)
The Aberdeen Singapore Equity fund has been consistently ranked among the top three Singapore equity funds over the last few years. It has outperformed its benchmark every year since its inception in December 1997. From April 2003 to April 2006, the fund gained an annualized return of 27.8%, demonstrating strong consistency in performance. In addition, the fund outperformed its peers during periods of market slump. In particular, from March 2002 to March 2003, the fund fell by 21% as compared to other Singapore equity funds that fell by 29% on average. The market capitalization of the Singapore stock market is relatively small compared to that of other global stock markets and can be volatile.
5. KOREA (Lion Capital Korea - $1,000)
Lion Capital Korea has been among the best performing single country equity funds over the last year due to the appreciation of the Korean Won and capital gains of the underlying stocks. The fund returned 64.0% last year as at April 28, 2006. This fund has also shown strong and consistent performance against its peers over the years. Over a three-year period as at 28 April 2006, the fund delivered an annualized return of 38.7%. Samsung Electronics, one of the top 10 holdings in the fund, has delivered strong performance over a number of years and the outlook is bright given the global demand for electronic products. Valuations of Korean stocks are still attractive as compared with historical levels. Domestic spending in Korea has also strengthened, which is another factor that would push up corporate earnings.
The problem is: What funds should I buy? After careful and serious consideration, I've decided to go with the countries at the top of my Beari Index -- a ranking of regional countries according to how cute the bear-chubs there are. I selected the funds for each country with expert advice (well, from Fundsupermart.com, a great site everyone). Over the months, I'll be tracking the returns to show that you can, indeed, construct an investment strategy based purely on boyish looks and BMI.
My "Beari Index" Portfolio
1. JAPAN (Henderson Japanese Equity - $1,500)
The Henderson Japanese Equity fund has beaten its benchmark index, which is the MSCI Japan Index, for every calendar year from 1999 to 2004 (except for the year 2000). It is one of the top five performing funds for the year 2004 and enjoyed consistency in terms of performance for the past 4 years. The performance of the fund tends to be less volatile as a substantial portion is invested into large Japanese companies.
Valuations of the Japanese companies still remain relatively attractive in comparison to historical valuations. The valuation for Japan tends to be higher than other regions such as the US and Europe due to lower interest rates in Japan. As over 65% of Japan’s economy relies on domestic consumption, the solid recovery in consumer confidence since last year may constitute further upside potential. Nevertheless, exports could still be affected by a possible slowdown in global demand and strengthening of the yen. We would recommend investors to include a Japanese fund in their portfolio to remain globally diversified.
2. TAIWAN (Lion Capital Taiwan - $1,500)
We expect the Taiwan market to experience short-term volatility due to the increased inflow and outflow of foreign funds. However, we like Taiwan due to its relatively low valuation, and also because it has a strong exposure to tech-heavy stocks, such as the semi-conductor foundries (UMC and TSMC). With the increase in global demand for technology products, Taiwan's electronic exports are expected to continue seeing strong growth.
3. HONGKONG (HSBC Chinese Growth - $1,000)
The HSBC Chinese Growth fund is the best performing fund in the past 4-year, 5-year and 6-year periods ended April 2006. The annualized performance of the fund for the past 3 years was 35.5% as at April 2006. In 2003, when the Chinese market experienced a run up, the fund delivered a 100% return, placing it as the best performing fund in the China equity fund category. Last year, the fund outperformed many of its competitors delivering a 38.64% returns as at end of April 2006.
This fund mainly invests in companies listed on the Hong Kong Stock Exchange with underlying business in China. With further market liberalization in next few years, the quality of companies is expected to continuously improve.
4. SINGAPORE (Aberdeen Singapore Equity - $1,000)
The Aberdeen Singapore Equity fund has been consistently ranked among the top three Singapore equity funds over the last few years. It has outperformed its benchmark every year since its inception in December 1997. From April 2003 to April 2006, the fund gained an annualized return of 27.8%, demonstrating strong consistency in performance. In addition, the fund outperformed its peers during periods of market slump. In particular, from March 2002 to March 2003, the fund fell by 21% as compared to other Singapore equity funds that fell by 29% on average. The market capitalization of the Singapore stock market is relatively small compared to that of other global stock markets and can be volatile.
5. KOREA (Lion Capital Korea - $1,000)
Lion Capital Korea has been among the best performing single country equity funds over the last year due to the appreciation of the Korean Won and capital gains of the underlying stocks. The fund returned 64.0% last year as at April 28, 2006. This fund has also shown strong and consistent performance against its peers over the years. Over a three-year period as at 28 April 2006, the fund delivered an annualized return of 38.7%. Samsung Electronics, one of the top 10 holdings in the fund, has delivered strong performance over a number of years and the outlook is bright given the global demand for electronic products. Valuations of Korean stocks are still attractive as compared with historical levels. Domestic spending in Korea has also strengthened, which is another factor that would push up corporate earnings.
posted by rookcub at
6:02 PM
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