03 Sep Singapore Permanent Portfolio Update – Aug 2013
Equity investors got to gloat over the good run in equities in the first half of 2013 while those invested in gold panicked. In Aug 13, there was a slight change in fortune as we see equities corrected all over the world. As usual, the media associated the tapering of QE and the pending attack on Syria as the causes for the correction.
Currencies like Indian Rupees, Indonesian Rupiah, Malaysian Ringgit and Aussie Dollar weakened. On the contrary, USD strengthened and Gold prices recovered.
Singapore Permanent Portfolio performed well in the above scenario. Not in terms of returns, but the volatile market condition has not affected the volatility of the Singapore Permanent Portfolio. While the equity market declined 10%, our flagship Singapore Permanent Portfolio only dropped 0.6% from Jul 13. Permanent Portfolio investors would have been sleeping very well. See the chart below. STI ETF has pared the gains while gold recovered. This change in fortune was unexpected but it was a symbiotic relationship which result in lowering the Permanent Portfolio’s volatility. Of note, the Singapore Government Bonds did not do well in Aug 13 too. It declined from $92 in Jul 13 to $89 in Aug 13. But nothing to be worried about even if it continue to drop further. Permanent Portfolio investors should just re-balance the portfolio when the opportunity arises.
As at 30 Aug 13, the Permanent Portfolio weightage is as shown below:
None of the component has hit 15% or 35% of the total portfolio value and hence, no re-balancing is required. Let’s continue to track the performance of the Singapore Permanent Portfolio in these ever uncertain times.