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September 9, 2006

International Real Estate – A Re-think

Filed under: My Portfolio — indexfundfan @ 12:22 am

In June, I started adding international real estate funds into my portfolio. The assets are held in the taxable account. I first added the Alpine International Real Estate Equity fund (EGLRX) and followed by the Fidelity International Real Estate fund (FIREX). Both funds are nicely up by about 8% presently.


However, yesterday I had a rude shock with FIREX because it made a substantial distribution after the close of trading on Sept 8, 2006. The total distribution was $0.87, which is about 6% of NAV (NAV = $14.37 after the distribution). Of this, $0.48 is for short-term capital gains (the worst kind). This is the largest distribution the fund has ever made in its history.


When I was first considering this fund, I did examine the distribution history and I thought the distributions were quite manageable. Now, it appears that I was wrong. I am reconsidering my international real estate allocation. One option would be to skip it until a more tax-efficient vehicle comes along.

PS: SSgA has filed with the SEC to introduce the DJ Global ex-US Real Estate ETF. This should be more tax-efficient. 😉


September 1, 2006

Portfolio return for August 2006

Filed under: My Portfolio — indexfundfan @ 9:06 am


Without much fanfare, August 2006 turned out to be the second best month so far this year for my portfolio (the best month was January). The portfolio return was 2.19%. The strongest performers were U.S. real estate and international real estate: these gained about 4% this month. The rest of the major asset classes came in at between 1.5% to 3%. The poorest performer was Precious Metals and Mining equity, returning only around 1%.


August 1, 2006

Portfolio return for July 2006

Filed under: My Portfolio — indexfundfan @ 9:00 am

My portfolio of 70% equity/30% fixed income ended the month of July 2006 with a respectable gain of 0.52%. What went up this month includes real estate (both US and international) and international large caps. The down assets this month includes US small cap and the Vanguard Precious Metal and Mining fund. The rest of the asset classes stay pretty much flat for the month. Emerging markets equity and international small caps went through another huge gyration in the range of 7 ~ 8% before ending the month flat.


July 4, 2006

Portfolio return for June 2006

Filed under: My Portfolio — indexfundfan @ 9:13 am

Despite a poor start to June, my portfolio managed to eke out a small gain of 0.15% in the month, after the markets recovered in the last few trading days of the second quarter. The month’s asset movements in my portfolio are as follows:

Net outflows : US L, REIT, Healthcare.
Net inflows: US S, EAFE L, EAFE S, Emerging Mkt, PME.

Most of the outflows came from US L and REIT, and they went mostly into emerging market equities. These movements are to bring the portfolio back into balance. In this month, I also completed my tax-harvesting of the emerging market equity position by using EEM in the interim for VWO.

My updated asset allocation chart is shown below:

June 24, 2006

International Real Estate added

Filed under: My Portfolio — indexfundfan @ 5:29 pm

I added international REITs into my portfolio in June 2006. Several articles have mentioned the added diversification benefits of having international REITs as opposed to just having domestic REITs. A recent post on the Diehards forum also discussed this. In addition, it appears that there are certain tax advantages to holding international REITs in a taxable account (due to the foreign-tax credit).

There are not many international real estate funds to choose from, and there is none from Vanguard. The fund I selected was the Alpine International Real Estate equity fund (EGLRX). This fund has about 40% allocation in Europe, 30% in Asia, 28% in North America and 2% in Latin America. The expense ratio of this fund is 1.18%.

Currently, I am targetting this fund to have a 1:3 ratio of my overall REIT allocation, i.e. 1 part of international REIT (ELGRX) to 3 parts of domestic REIT (VGSIX). The new allocation will be reached by re-allocating my VGSIX assets to EGLRX in the next few months.

June 1, 2006

Portfolio return for May 2006

Filed under: My Portfolio — indexfundfan @ 1:05 pm

Stocks are on sale! Emerging markets equities had quite a tumble in May. In accordance with my investment allocation plan, more money was rebalanced into emerging market equities.

The portfolio return of -3.31% in May lags the benchmark of -2.51%, but on the YTD basis, is still ahead of the benchmark.

May 3, 2006

Portfolio return for April 2006

Filed under: My Portfolio — indexfundfan @ 10:35 am

April 2006 has been another good month. My portfolio of 70% equity / 30% fixed income returned 1.92%. Overall, the portfolio YTD return is 8.81%. What’s particularly strong this month included EAFE large-cap, EAFE small-cap, emerging markets and precious metals / resources equity.

April 3, 2006

Portfolio return for March 2006

Filed under: My Portfolio — indexfundfan @ 10:34 am

March 2006 had been another reasonably good month for my 70%/30% (equity/fixed income) portfolio. The return was 2.07%, bringing my year-to-date portfolio return to 6.76%.

The two closest Vanguard funds that match my portfolio are the LifeStrategy Moderate Growth fund, target 60% equity/40% fixed income, and the LifeStrategy Growth fund, target 80% equity/20% fixed income.

The first fund returned 0.95% in March and 3.63% year-to-date, and the second fund returned 1.61% in March and 5.05% year-to-date. A spliced version (50:50) that matches my 70%/30% allocation portfolio would have returned 1.28% in March and 4.34% year-to-date.

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