Portfolio Update

I’m well overdue for an update! As we pull in to the end of the financial year, I’m looking over my portfolio changes over the past 12 months, and I gotta say, I’m feeling pretty good about them. There’s nothing flashy here, just a solid year of boring but modestly effective investments.

LICs & ETFs 2019

Everything I’ve purchased has been in line with my long term goal to generate a growing passive income stream. I’ve stayed away from the temptation of speculative meme stocks that I wasted money on at the start of my investing journey. All my purchases this year have been dividend paying stocks, and I’ve even sold out of one of the milk stocks that had been dragging down my returns for most of the year.

More of the same

WHF logo newI topped up a few of my existing holdings throughout the past year with additional purchases. In December I participated in the Share Purchase Plan (SPP) capital raising for Whitefield (ASX:WHF), going in for a minimum chunk of $1,000 worth of additional shares at $4.24 each. This was a terribly volatile time in the whole market. It seemed like a good deal because the price had come down significantly from where I first bought Whitefield, but of course it continued to slide down after that towards the abyssal depths of the Christmas chasm. However, since Christmas it’s been steadily recovering along with the rest of the market, so it’s now quite solidly in the green, especially with the recent dividend payment reinvested. My Whitefield holdings are now at +9.86%; not too shabby.

ASX logoImmediately after the new year we topped up our Australian shares index ETF (ASX:VAS) within our Equity Builder loan for an extra $5,000 worth. This was a wonderful time to be buying. It wasn’t the absolute low of Christmas day, but just shortly enough afterwards to not feel like we were trying to catch a falling knife. We got in at $71.43 per share, and it’s gone up more than $10 since then, so I’m feeling like Nostradamus on that one. A good time to be invested in the ASX. Combined with our previous VAS holdings, our Aussie shares ETF is now up a whopping +14.25 in 1 year! Oi oi oi!

AFIC logo newIt was a thrill watching the index recover so strongly after that, offset only slightly by how much slower all of our LIC holdings were recovering. LIC share holders are a sluggish breed, and the prices of all of our non-index shares stayed low long after their underlying holdings had started bouncing back. This created a significant discount to the (NTA) value of the shares, so we took Donald Bradmanthe opportunity to borrow another $20,000 in our Equity Builder in February and March, putting half of that into Argo (ASX:ARG) and half into AFIC (ASX:AFI). We got the Argo shares at $7.53 each and the AFI at $5.95 each, both of which are currently looking like bargain prices. This also returned our AFI holdings, the first company we bought when we were first wetting our toes, to being our largest single holding. At the time of writing this, our AFI shares are up +6.35% including dividend reinvestment, and ARG is up +5.95%. Not as impressive as the index, but I blame that mostly on politics.

Emerging markets

After the drubbing our Asian shares ETF (ASX:VAE) took in last 2019, things were looking bleak in the emerging markets space, but I still wanted to be diversified into the less developed countries. I’m a geography nerd, so I enjoy having more countries represented on my regional exposure pie chart. Emerging markets overlaps heavily with VAE, both being mostly China, but where VAE has peripheral Asian economies like South Korea, emerging markets indexes are rounded out with India and Brazil mostly, with peripheral exposure to Russia and a whole host of tinier nations. To fill in that gap in our portfolio, and to take advantage of the cheap price of emerging indexes, I decided to get in on an emerging market index ETF. I considered Vanguard’s offering (ASX:VGE) but I decided to go with a different provider this time, so I bought $7,300 worth of the SPDR emerging markets index ETF (ASX:WEMG) spread over the first quarter of 2019. I had a bunch of free trades on my SelfWealth account, so I was able to drip money into it in small doses for peach of mind.

PrintCompared with VGE, I like the smaller unit size of WEMG. For a small holding that’s set up to have the dividends automatically reinvested, large unit sizes (which all the Vanguard ETFs have) mean that most of the time the dividends just sit there accumulating for several distribution seasons before there’s enough to buy another whole share. With WEMG at about a third of the unit size of VGE, that process is a bit more efficient. The management fees of WEMG are slightly higher, but on the other hand the dividend yield is too, and ever so slightly more than makes up for the extra fees. The timing worked out well for me, and my WEMG holdings are already up +6.92%.

Buying the bank

In February I broke my rule about not buying individual company stocks. It was right after the banking royal commission results had been announced, at a time when people were still excited about the possibility of actual reform, so the share prices of all the major banks were down. NAB’s prices were particularly low, because they were getting their wrist slapped more than the others. I figured that the well meaning cries of outrage were likely a passing fad, and so I jumped in and nabbed a bunch of NAB shares.

nab logoAt first I just bought a couple of grand worth, but a couple of weeks later the prices were still nice and low so I bought another wad at the same price, bringing the total up to $5,000 worth. At the time, based on the past several years of dividend history, I was looking at a grossed up dividend yield of more than 11%! I figured it didn’t matter if the share prices ever recovered, because at that yield I was going to get my money back and be well into double compounding in less than 9 years, which is an amazing potential income return. Another element in my decision is that I’ve been very happy with NAB’s unique product offering of the Equity Builder loan, which shows that they’re willing to innovate where the other banks aren’t. Without wanting to spruik them (I’m in no way affiliated and get no kickbacks or anything like that), I think NAB are possibly the least terrible of the big banks.

Unfortunately, in May NAB declared that they were cutting their dividend by 16%. For a couple of days after that the share price took a mild beating, but to my surprise it recovered very strongly, and looking at the price now you wouldn’t know anything had happened. Apparently the invisible hand of the market believes that the dividends will go back up sometime soon. I’m currently up a massive +14.83% on this in just a few months. That’s beating the index, baby! I see this is as my first real “value” victory, because I identified a bargain price and pounced on it. Nevertheless, this is a long term hold for me, so I’m not letting it go to my head.

Spilt milk

BubsIn April we made our first ever sale of shares. My wife got into the milk formula shares (Bubs and Wattle) just over a year ago, and since then we’ve enjoyed some dizzying highs at first (up more than 30% in a short burst) followed by a year of downward grind. At one point they were down more than 50% from where we bought them. Then in the first quarter of this year they started recovering. As soon as the Bubs (ASX:BUB) shares went back above what we bought them for, we sold all of our holdings in them. We’ll probably do the same thing if or when our other non-dividend paying shares break even. When we bought them we were green thumbs, just toying around with investing, and we didn’t have such a clear picture of our own goals or strategies. So these holdings don’t really fit into our bigger picture any more. I’ve even stopped tracking the share prices or including them in my tally of how our investments are going, since I’m now defining “investment” as only things which generate cash flow. So I’m happy to see the back of this one. The fact that we got a couple of hundred dollars of profit, and just in time to qualify for the 50% capital gains tax discount, is just gravy.

Unfortunately, our other speculative, non-dividend paying stocks (milk, lithium, and cannabis) are on average down about -60%. Yes, that’s right, there’s no decimal point there. It’s only a few thousand dollars out of our 6-figure portfolio, but it’s enough to drag the overall total performance down by around -5%. Lesson learnt, the hard way!

Overall composition

Aussie memeThe proportions of the different allocations in my portfolio haven’t changed significantly. I’m still happily overweight Aussie income stocks, with a 75/25 Australian-international split. I know that’s an unpopular allocation, but you won’t change my mind on it. I’m roughly half-half with active LICs versus passive index ETFs, which I guess will annoy purists in both camps, but whatever, I still think it’s a false dichotomy. Drilling down further, I can see a case for better managing the individual countries exposure within the international component of the portfolio, but I don’t have the time to learn enough about each economy to make it worthwhile.

Regions 2019

I’m definitely heavy on the financial sector, especially since going long on the bank stocks, which pushes me even less diversified than the already concentrated top-heavy Australian stock exchange. Time will tell whether that’s a bad place to be, but my feeling is that I got in on the NAB shares, and by extension all the Australian focused LICs and ETFs I bought this year, at a reasonably good time. Not that I would encourage timing the market, of course, better to just shut your eyes and keep buying.

This is the performance of our whole investment portfolio thus far, since we began just over a year ago.  By “investment” I’m excluding the meme speculation.  It’s total returns including reinvestment of all dividends:

Line 2019

It’s been a wild ride, but we finally crossed the 8% line for the first time today!

Next steps

I don’t feel the need to make any changes at this point. There’s nothing on my radar that I’d like to add to the portfolio, so if I were buying then I’d just top up all of the holdings with more of the same. We’ve had some fairly large expenses recently, so I don’t think we’ll be buying any more parcels of shares soon, but we’re technically still growing our holdings through our monthly repayments into the Equity Builder loan. I am tempted to save up a larger pool of cash during the rest of year. Not so much because I think cash is a safer asset, but just because I think it’s time to grow our emergency fund to be a little safer.

I hold shares in all the above mentioned equities. Duh. Beyond that, I’m not affiliated in any way with any of these companies, and I receive no kickbacks. Nothing written here should be considered professional financial advice.


  1. Nice post, good time to be buying last December… i put about 30K in the market in November & December, and considered another 10K the day before Christmas… wish i had done it!


  2. Thanks for sharing your journey and it’s very useful. From a structure perspective, do you hold this on your individual names or have you got some other entity (Discretionary Trust etc) owning these investments.


  3. Thanks for sharing very insightful information. I have been thoroughly enjoying your blog. Especially loved the NAB equity builder article. I would like to check what software do you use to track your journey. I like the graphs and pie charts that you have posted here.


      1. @Prometheus Dreaming, Nice post, would be curious to have a look at what kind of excel setup you built to track your portfolio if you ever feel like making a version publicly available. Mine is an absolute nightmare and I ended up relying on Investsmart and Navexa, both of which have a pros and cons…


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