April 2022 Portfolio Update: FLY VIP

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April 2022 Portfolio Update: FLY VIP

Disclaimer: These prices were based on the 10th of April. The content below does not represent FLY: Malaysia and should not be misconstrued as financial advice. This article is simply for educational purposes only.

How is our Portfolio doing?

   

Month on Month, our portfolio in both regions is up 

Our US portfolio is up: 7.9%

Our Malaysia portfolio is up: 1.2%

For reference, an image of all our (virtual) holdings is at the bottom.

Now, a few of the members of FLY VIP have shared their thoughts on their holdings and some other musings on the happenings of the stock market. 

 

Cheong Hien 

Berkshire Hathaway B-Class (up 10.55%)

Your investment a month later, any thoughts? 

So far so good. Berkshire Hathaway has proven to be an outperformer in times of market uncertainties. Despite seeing similar uncertainties in the market moving forward, I am still confident with my Berkshire pick. Although prices in Berkshire seem to have gone up quite a bit, I won’t be adding more shares at this level. However, I am more than happy to hold this excellent business!

Is there anything else that you’re looking at stock wise?

Quality tech stocks. I have personally bought some shares in Apple and Google after the rate hike day as certainty has returned to the market but I am still sticking to high-quality tech. 

 

Muhammad Bahari

AXReit (down 0.53%)

Your investment a month later, any thoughts?

Well, it certainly did not beat inflation for this month. However, in regards to my personal portfolio, I am happy to have received a dividend of RM0.0038 per unit. While largely negligible considering the small sizing, I am excited for its growth in the future due to the compounding effect.

The dividend yield currently is 4.64%, at a cost basis of RM1.87. However, if the price rises as a result of business expansion/increased growth to say an arbitrary value of RM2.50, a 4.64% yield for me would actually be a 6.2% as my costs have remained the same.

On an interesting note, a way of valuing stocks under those who believe in the efficient market hypothesis are concerned with these variables; 

R: referring to the rate of return 

D:  the dividend yield

P: stock price

G: the long term growth rate

 

The implication is that stock prices are effective by the premium of holding stock over bonds, dividend yield and the long term growth rate, henceforth implying that new information related to an asset is a key driver of its price.

Recent market trends of note

In general, the broad market index has seen huge dips recently, with the market (referring to the S&P 500) hitting the 4200 level multiple times but ultimately bouncing back. We can’t predict the future of where the stock moves, however, if the 4200 level breaks in the future, we could see broader psychological market sentiment fall where 4000 will be a key level for investors to watch. 

(Source : TradingView)

 

Jih Yih

ITOT (up 0.78%)

Your investment a month later, any thoughts?

ITOT essentially tracks SPY500 closely and the return is as per expectation. Although there are still a lot of market uncertainties, I will maintain my pick moving forward as I foresee a strengthening of the US dollar and global capital inflow in the U.S. amid the Russo-Ukrainian  conflict. 

(Source : TradingView)

Is there anything else that you’re looking at stock wise?

Perhaps the financial sector, healthcare and possibly commodities ETF (i.e., gold and metals ETFs). Instead of attempting to capitalise on the interest rate hike environment, defensive sectors could provide stability and solid returns amidst market uncertainty. Personally, I am looking at the financial sector such as Maybank as financials perform strongly in a rising interest rate environment and Maybank’s considerably high dividend yield (avg dividend yield at 7.53%) has strengthened my consideration to increasing my personal cash flow in the short term.

 

Kng Fen Ying

Revenue (Down 9.58%)

Your investment a month later, any thoughts?

Revenue price fluctuated recently due to the digital bank licence which was expected to be announced in March but has yet to be announced. The purchase price of RM1.67 is considered to be high so there is currently a 10% loss. However, if it can successfully get the digital bank licence, I believe there will be a price surge. Hence, the digital bank licence announcement is crucial for Revenue’s short term price movement. Although its usual company operations will continue to run smoothly if it does not obtain the digital bank licence, its price momentum might be affected. As a result, I will re-evaluate my Revenue portfolio following  the upcoming digital bank announcement. 

Recent news related to the markets of your interest 

Foreign funds are entering the markets of Southeast Asia and other developing countries. Southeast Asia as a whole is relatively insulated from geopolitical tensions elsewhere in places such as Europe, where the war in Ukraine has kept investors on edge over the region’s economic outlook, analysts from Goldman Sachs and JPMorgan Asset Management have told CNBC. In Malaysia, foreign investors posted their highest monthly net buy value of Malaysian equities since January 2018 in March 2022 when their net purchase value of local shares rose to RM3.3 billion from RM2.8 billion in February 2022. So, I believe the Malaysian market will be quite good this year, compared to last year. 

 

Final Thoughts

That’s all for this month’s update. Feel free to comment if you have questions, or if there’s any recent happenings in financial markets that you feel is worth talking about, and we’ll cover that next month!

Our Malaysian Portfolio 

Our US Portfolio 


Researchers (FLY VIP’s Team): Cheong Hien, Muhammad Bahari, Jih Yih, Kng Fen Ying

Reviewers: Muhammad Bahari

Editors: Mindy Liew

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