SINGAPORE (Dec 25): We started the Singapore Market Portfolio in our first issue of 2017 (Issue 761, Jan 9) with $200,000 in notional capital and a plan to draw inspiration from The Edge Singapore’s reporting on the local corporate sector. As at Dec 19, there were 17 stocks in the portfolio, bought at a total cost of $166,266.50. The total market value of these holdings was $182,613.50. The portfolio also held a cash balance of $45,334.62. That adds up to $227,948.12.
So, for 2017, the portfolio generated a total return of $27,948.12, or about 14%, on the initial sum of $200,000. During the year, the portfolio collected $3,335.87 in dividends from its holdings. Hence, the return from dividends alone was 1.7%, while stock price gains contributed 12.3%.
While an individual investor might be quite pleased with this return, a professional money manager would probably hang his head in shame. During the same period, the Straits Times Index chalked up a gain of 20.4%. Yet, it should be noted that the STI’s gain this past year was unusually high. According to the Singapore Exchange’s investor education portal, My Gateway, the STI has delivered an average annualised gain of 6.2% over the last 32 years. This does not include the STI’s dividend yield, which has averaged 3.5% since 1999.