Saturday, November 08, 2008

Position Level Allocation

After all the changes of the last couple of months, I'm posting my position level allocation as at the end of October. This is one the main spreadsheets I maintain to see where I'm at across the whole portfolio. The primary breakdowns are according to currency and investment mode or function. "Passive alpha" are investments that are usually expected to have low correlation with stock or bond markets (including all individual financial sector stocks) while "beta" investments are funds and ETFs which are either index funds or mutual funds that are close to closet indexers. Some of these are sector funds (e.g. XLF, PBW, Global Resources Fund), some country funds (e.g. IFN), some capitalization funds - small and large cap Australian stock funds, and asset class funds (CREF Bond Fund). I break out individual non-financial stocks as "industrial stocks". The point of this post is mainly just to show what I'm currently holding in what proportion.

Positions that have done relatively well have grown into rather large percentages of net worth. In particular, the TIAA Real Estate Fund is now more than 9% of net worth and regarded as a "passive alpha" investment. It provides the bulk of our real estate exposure. It is a "direct property investment" as it is a non-exchange-listed open ended fund that directly invests in property. Direct property investments behave very differently from exchange listed property investments. They have a lower correlation to the stock market. Our only other exposure to direct property is through Snork Maiden's retirement account (PSS(AP)), which currently is still a very small exposure. Our other "real estate investments" are NCT (mortgage REIT), CIF.AX (Infrastructure Fund), BT Property Investments (a REIT mutual fund), and 3% of the CFS Conservative Fund. I'm rather loathe to cut exposure to the TIAA Fund given how well it has performed and our limited other opportunities currently for real estate investment. We could increase the share of Snork Maiden's retirement account in direct property, but the total amount to play with there is still rather small. Our other accounts are rather "liquidity constrained" :) So despite the single fund manager risk, I'm going to keep the current allocation.

1 comment:

Anonymous said...

I think in your case I would bail out of the TIAA Real estate fund. I wonder how it can perform well when most REITS are down 50% and Cap rates for commercial property is rising fast. the fact that is non- exchange trades does not change the prospects of RE which is just plain miserable. Get out while you can without taking losses.

FWIW Clownbucks