Genesis
The 15HWW Permanent Portfolio was built during late 2016 with a capital of around $140,000 and I started tracking it from Jan 2017.
The aim of a permanent portfolio is to create a liquid portfolio with low volatility and a respectable return. A comparative benchmark is the CPF SA return of 4%.
To keep the portfolio as simple as possible, there is neither rebalancing nor injection of funds.
Purpose
Personally, I view many components of this portfolio as a form of emergency fund. For example, the cash and bonds are invested in very liquid and safe instruments and can be sold and cashed out within a matter of days.
Another reason is that by showcasing and regularly updating this humble portfolio, I hope it will inspire confidence in some readers to take some risk, invest and build wealth steadily with a low-effort portfolio.
December 2024 Update
Annualised Return: 8.9% p.a. (Jan 2017 to Dec 2024)
This has become a theoretical portfolio as I have sold off all my STI ETF sometime in 2023. Good call actually, even though the STI ETF is up ~20% in 2024. It has underperformed Gold slightly and Berk B significantly, even after accounting for dividends.
I was actually quite surprised that even with such a small allocation (5%) to Bitcoin and Ether as recently as 2021 and 2022, they have contributed greatly and dragged the portfolio to a 8.9% annualised return over the past 8 years. Definitely lends credence to a barbell portfolio if you are thinking of setting one up.
8.9 % is also more than double the CPF SA’s return of 4%. And yes, I am not a supporter of topping up CPF accounts, especially if CPF balances are already a big part of your networth.
I also know that we are currently in the midst of a bull market so I will be fair and remember to do another update in the depths of the bear to see if this 15HWW Permanent Portfolio is still outperforming CPF SA.
Short personal update: Baby 15HWW is turning 3 soon and I have learnt to carve out more time for myself. For instance, I have resumed my gym trips recently. And since I paid good money to continue maintaining this blog, I will do my best to keep it decently active. Will pen down more short posts on some financial reflections for the rest of Dec. Stay tuned.
Thank you for reading.
Annex: A Brief On The Various Components Of The 15HWW Permanent Portfolio
1. STI ETF (Initial Allocation: 20%)
It comprises the 30 biggest listed companies in Singapore and many of them are dividend-paying. The ETF distributes the dividends semi-annually, in February and August every year.
2. Berkshire B (Initial Allocation: 20%)
The idea is to use Warren Buffett’s holding company to loosely replicate the S&P 500 for US equities exposure. Since foreigners investing in US stocks are taxed on dividends, it is an advantage that Berkshire B does not pay any dividends.
3. Gold (Initial Allocation: 20%)
I used to hold some paper gold but have since converted them to physical gold. The portfolio consists of 9 pieces of 50g PAMP Gold Bar bought from UOB Bank. They are fairly liquid since they can be sold back to UOB Bank at a small spread. You can also check the prices here.
4. Cash/Bonds (Initial Allocation: 30%)
The majority is invested in Astrea Bonds and Singapore Saving Bonds (SSBs) which are very liquid in nature. Astrea Bonds are traded on the market while SSBs can be redeemed at par value, usually in a week or two’s time.
5. Bitcoin (Initial Allocation: 5%)
Added in 2021 to diversify away from cash and gold as a store of value. As many centralised crypto exchanges have abused users’ trust in them, my bitcoin is now stored in a cold wallet.
6.. Ether (Initial Allocation: 5%)
Added in 2022 since I am not a Bitcoin Maxi. As many centralised crypto exchanges have abused users’ trust in them, all my ether is staked on-chain.
Welcome back! It’s been a while.