After 4 years of publishing my portfolio returns, I almost beat the market (S&P 500).
The total return of my portfolio since January 2021 is 61.3%. The index has a return of 64% in the same period.
The CAGR of my portfolio now currently stands at 12.7% after 4 full years. Not too shabby I guess but I still feel a little gutted to still behind the market by a little.
For those who have been following my blog, I constantly publish my portfolio updates over the past 4 years. In case you are new to the blog, this is the composition of my portfolio.
(Source: https://www.portfoliovisualizer.com)
iShares MSCI World ETF (URTH): 30%
Berkshire Hathaway (BRK.B): 20%
iShares MSCI China ETF (MCHI): 7%
Alibaba Group (BABA): 4%
Shell (SHEL): 7%
ARK Innovation ETF (ARKK): 7%
ARK Genomic Revolution ETF (ARKG): 5%
Bitcoin: 20%
The constituents in my portfolio have never changed in the past 4 years but I do readjust the allocations at the start of every year. The above allocations are used in 2024.
Here is a comparison of the full-year performance of the portfolio against the index.
Based on an arbitrary amount of $10,000
(Source: https://www.portfoliovisualizer.com)
The S&P 500 index returns about 24% this year while my portfolio returns 35%. So this is the second year in a row that my portfolio outperforms the index.
For the full performance against the index since 2021, below is the chart.
Here is the yearly breakdown of the annual returns.
2024: 35.5%
2023: 44.8%
2022: -26.9%
2021: 0.2%
Something worthy to note here is that it’s important to stick to your investment thesis and take a long horizon. If I have just given up on my portfolio at the end of 2022, I will not be seeing those returns in 2023 and 2024.
A return of more than 20% for the S&P 500 in two consecutive years is pretty rare, and is the best performance for the index since 1997 and 1998. I don’t think we will see a return of more than 20% for the index in 2025.
Hence, I am also not expecting the same kind of returns for my portfolio in 2025. I will want to see further improvement in the CAGR though so I am expecting a return of at least 12.7% in 2025.
I think this might also be the year when I could have beaten the market. This will certainly be nice as this year marks the fifth year of the inception of my portfolio.
As per previous year, I will be looking at making some tweaks to the weightings of my portfolio constituents.
Reduction in weightings for MCHI, BABA, ARKK, ARKG
I am a lot less optimistic about the China market as compared to a couple of years ago. Regulations can easily change and affect the China market overnight. Many investors have their portfolio stuck in a no-man land for the past 3-4 years when investing in China equities. The China’s economy is sluggish with economic growth slowing down amid the high unemployment rate. I will be continuing to trim down my stakes in MCHI and BABA. Allocation to MCHI and BABA will drop from 7% to 5%, and 4% to 2% respectively.
At the same time, I will also continue to trim my stakes in ARK ETFs. Despite the NASDAQ having a return of 28.6% in 2024, ARKK ETF only has a return of 8.4%. It baffles me how could an ETF which focuses on technology innovation to have such dismal return in a year when tech rules the market. ARKG ETF performs the worst in my portfolio with a return of -28.24%. This is not totally unexpected and I have always know the genomics investment has big swings. Allocations to ARKK and ARKG will drop from 7% to 5%, and 5% to 2% respectively.
In total, MCHI, BABA, ARKK and ARKG should constitute to 14% of my portfolio in 2025.
Increase in weightings for URTH and BRK.B
Both URTH and BRK.B have double digit returns in 2024 with BRK.B even beating the index. It has always been my long term plan to slowly increase the weightings of URTH and BRK.B in my portfolio as they form the stable core in my portfolio. Allocations to URTH and BRK.B will increase from 30% to 35%, and 20% to 24% respectively.
Both URTH and BRK.B should constitute to 59% of my portfolio in 2025.
No change in weightings for Bitcoin and SHEL
Bitcoin has yet another tremendous year in 2024 with a 120% return. I expect 2025 to be yet another big year for Bitcoin as investments from instituational clients start pouring in. Despite large returns for Bitcoin, I will not increase my weighting towards Bitcoin beyond 20%. Bitcoin is still a volatile asset for now, and I want to minimise the risks it brings to my portfolio while still leveraging on the outsized gains it provides.
Shell ends the year pretty flat. I aim to keep the same allocation in 2025 to maintain the same exposure to O&G sector.
Both Bitcoin and SHEL should constitute to 27% of my portfolio in 2025.
Here’s wishing everyone to a successful year of investing in 2025!
Moving forward, I might be posting more in my Telegram channel (with 280+ subscribers) and less on this blog as I expect 2025 to be really hectic both professionally and personally. Regular postings of quality articles on the blog will continue albeit at a lower frequency. Please do join the channel if you like my content!