I haven’t updated my unit trust investment portfolio for quite some time for various reasons. Last week, when Gold price spiked sky high, I thought it would be good to take a look how my investment portfolio has performed. Then on June 26th, after every NAV figure updated, I was surprised to see the profit level of my portfolio has recorded a profit of RM 15,784.44.
I was surprised partly because my current portfolio is set ultra conservative started with 3% equity exposure at the beginning of the year. Then it was slowly moving up to 5%, 8% and the latest is 12% now when I saw market was not as bad as expected.
Bond Fund Outperforming
Initially, I was expecting to exceed RM 10,000 profit level within a year, if I were to invest totally with fixed income fund. But little did I know, fixed income funds, particularly bond funds have been gradually outperforming their past. At the beginning of the year, they were just performing at an annual return rate between 4.5-5.5%. But today, they have increased as high as 9-13%.
Secondly, the increase rate of exposure to equity fund from initial 3% to 12% has helped the rate of return accelerated without doubt. Gold related funds have increased dramatically last week due to gold price spike even though my exposure was not significantly large. But it has contributed partly to the cause nevertheless. I have some small exposure to US equity funds as well. US equity funds were also performing very well at the time when I updated my portfolio.
All these factors have helped the overall performance. I am glad to see unit trust investment has proven its reliability and consistency once again. Even though it does not provide us with that kind of blissful high feeling like stock investment, but as long as it is consistent, we will win in a long run. The astonishing compounding effect will be on our side when time goes on.
Importance of Consistent Return
Speaking about consistency, I must admit that I have not really achieved it totally. I am still striving to minimize losses as much as possible. By the ending of last calendar year 2018, global stock markets caught every investor off guard and swallowed up big money throughout the whole world due to the effect of intensifying trade war between the US and China.
Many of them are still leaking their wounds and refuse to enter market even until now. I wasn’t able to be exempted among those registered with heavy casualties too. My lost was about RM 10,000 that time. But when I considered Mr. Market has rewarded me with RM 30,000 profit in its previous good year 2017, I could easily forgive his cruelty.
But the loss happened at the end of the year, I didn’t have the time to recover. As a result, I planned to recover within next year purely using fixed income because the loss was not that large relatively speaking. Little did I know that God blessed me with a time shorter than what expected.
With such an uncertain market condition, cum with lack of clear direction, with potential high volatility some more, I do not expect to have a colorful return for this year. A return higher than fixed deposit should be sufficient to make us happy and satisfied.
I pray that this rate of performance will continue until the end of this year. If it happens, my goal of outperforming investment mammoths will be achieved by then.
How about your investment performance for this year? I do hope you are doing much better than this and share with us how you did it, so that we can learn from one another.
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Disclaimer The view and opinion expressed are personal views of the author and are subject to change based on market and other conditions. This write up does not constitute sole advice for an investment decision. Investors are advised to do further reading and research to conclude individual decisions.