My Portfolio Performance in 2021

“I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over.” — Warren Buffett

As we are entering the year of 2022, it might be a good idea for me to write about my portfolio performance in 2021.

I do not expect myself to beat the market and making an average market return is good enough for me. As long as I make consistent return every year, I should be on my way to retire by 2025.

Good thing about ETFs/ index fund investing, I am no longer having sleepless nights when the market crashes because I know eventually my portfolio value will go up again. Actually I was happy when the market made a few small corrections ( about 1.5-2%) in 2021 because these were the times for me to load up my ETFs.

Performances of the Benchmark

Before I go thorough my portfolio performance, let us have a look at performances of a few well-known markets/ indexes. ( Year to date performance up to 24/12/2021)

If you like to know the differences between MSCI World index and FTSE All-world index, you can read my post HERE.

1. KLCI ( FTSE Bursa Malaysia) -6.81%
2. STI ( FTSE Straits Times index) +9.30%
3. S&P 500 +27.70%
4. Nasdaq index +23.27%
5. FTSE All- World Index +15.69%
6. MSCI World Index +19.21%

As you can see here, since emerging markets especially China market performance was lagging in 2021, MSCI World index ( which only include developed markets) returned an impressive 19.21%, outperformed FTSE world index return of 15.69%.

KLCI ( Malaysian stock market ) performance is the worst performer so far in 2021 compared to all other markets with a negative return of 6.81%.

STI ( Singapore stock market) clocked a return of 9.3% up to date, much better than KLCI but still lags far behind S&P 500’s YTD performance of 27.7%!

For the first half of the year 2021, Nasdaq and ETFs that tracks it namely QQQ consistently outperformed S&P500, however, the tide has been reversing for last few months. At the time of writing this post, Nasdaq underperforms S&P500 by more than 4%.

My Portfolio Performance

As you have known so far, I invest in broad market ETFs, my asset allocation is 85% in equities and 15% in bonds ETFs. If you happen to read my early post on my USD index fund portfolio HERE, I allocated 65% in VUSD, 20% in VWRD and 15% in VDTY.

However, people change all the times, after going through a few investment books, I decided to change my strategy and buy more VWRD and IGLO instead of VUSD and VDTY, you can read the post HERE and the reasons behind the change.

If you remember from my previous post ‘When Can I Retire?’, the retirement graph is based on a yearly return of 5% only, I hope to get a consistent yearly return of 7-8% and I will be very thankful if the return hits above 10%.

Now, let us have a look at my USD-denominated portfolio return in 2021.

The percentage of each ETFs that I hold is shown as below,

As you can see, since my equities ETFs have gone up in value a lot in 2021, I am still trying to buy more bonds ETFs ( IGLO) to get the percentage to 15% ( current level is 10.63%+ 3.68% =14.3%). Actually my initial plan was to hold VWRD and VUSD at 42.5% each. Since for the last 18 months, S&P 500 index ( and thus VUSD) has gone up more than 60%, I have stopped buying VUSD for long time.

For the next few months, I need to make some adjustment so that my asset allocation will be back to my desired percentage ( 42.5% VUSD, 42.5% VWRD and 15% bonds ETFs). At this moment, I will not buy anymore VDTY but only IGLO.

More than 20 percent return

It comes as a total surprise my USD portfolio clocked an impressive return of 20.94% and it outperforms VT ( Vanguard Total World index) by 3.4%!

And remember, I just need an average of 5%-7% of yearly investment return to hit my retirement number by 2025! I am totally excited about my portfolio return in 2021.

However, my Singapore REITS and banks returns are heart-breaking, due to my wrong decision to buy Lippo Mall REITs and First REITs many years ago, I am still sitting on losses.

So if I combine my USD and SGD investment, I roughly make a return of 10%, and this number is good enough for me.

Conclusion

Investing in ETFs is one of the easiest and surest thing you can do to make money in stock market. No matter what direction the market goes, all you need to do is loading up whenever you have spare money. Invest according to your asset allocation, you can’t go wrong investing in broad market ETFs!