- New investment: Long-Term Government Bonds
- Average portfolio fee: 0.25% p.a.
- +3.95% YTD growth
- Total portfolio value EUR 3,698.28
- Request for input for a coming post on investing in bonds with negative yield
Hello my friend,
Welcome back to a new update of my All Seasons Portfolio built by ETFs available outside the US. This time, with an update on the November 2019 development.
Outside, winter is making its first appearance here in Sweden with cold weather and some days with snow fall. That good enough reason to keep warm inside and binge watch TV series or read, and prepare for Christmas.
It reminds me that I have soon completed a full year since starting with the All Seasons Portfolio strategy. On 21 December 2018 I wrote my first post on how you can get started with the All Seasons Portfolio Strategy. This past year has taught me a tonne, and I will write a special blog post on the most important teachings and summarizing the first year. Remember to subscribe to the newsletter, so that you never miss a portfolio update. I am planning to ramp up the quality of the content in the coming months with more in-depth analysis of markets.
For example, in the beginning, I was struggling with having the splits even slightly correct as according to the strategy (you know, 55% bonds, 30% stocks, 7.5% gold and 7.5% commodities), my portfolio is looking more and more like the ideal splits for each passing month. Don’t you think?
Oh, and in case you missed it, I published a deep dive post with focus on the Commodity part in my portfolio and about that particular ETF. Have a read and let me know what you think.
Portfolio Update November 2019
So, what happened in November? Well, as expected from the All Seasons Portfolio Strategy, not so much drama. And that is exactly the point with this strategy: wealth ticking upwards over time without big drawdowns.
The portfolio splits are looking fairly decent now. What I did this month, was to add on the Long Term Treasury Bond side, which is the gray area of the charts. That part is now 28% of my portfolio, up from 22% in October.
This I did by buying American long term treasury bonds packed in the ETF iShares $ Treasury Bond 20+yr UCITS ETF USD (Dist) (EUR) (ISIN: IE00BSKRJZ44). I bought 59 units at EUR 4.82, so around EUR 282 in total.
That gives me a portfolio now worth EUR 3,698.28 by market close on 30 November 2019, with the following splits in euros.
In November, I experienced a slight drawdown, with portfolio development when compared to average purchase price went down from 4.52% to 3.95% from October. This was mainly driven by decreases in Gold, Commodities and Long-Term Government Bonds, while some what repaired by a rise in stocks.
I am not so concerned about this, but believe we will see steadier growth as I further close in on the ideal portfolio asset allocations. Now, I am still slightly overweight in Gold and Commodities, meaning that when these assets move, they have a larger impact on the total portfolio. On the contrary, I am underweight in stocks, meaning that I do not yet get full positive results from the stock market’s movements.
Dividends are still at quite unremarkable levels with an American Long-Term Government Bond ETF distributing semiannually in November. Looking at the trends in the graph below, I would expect further dividends in December/January, before a hibernation there until June again.
As for what ETFs I have in my investment account, here is the usual table with ETF name, ISIN, asset type and value with comparison month by month.
| Asset | Category | ISIN | October 31, 2019 | November 30, 2019 | Change |
|---|---|---|---|---|---|
| iShares $ TIPS UCITS ETF USD (Acc) (EUR) | TIPS | IE00B1FZSC47 | € 392.36 | € 397.76 | +1.38% |
| Vanguard EUR Corporate Bond UCITS ETF | Corporate Bonds | IE00BZ163G84 | € 378.42 | € 377.72 | -0.18% |
| iShares € Govt Bond 3-5yr UCITS ETF EUR (Dist) | Govt Bond Mid | IE00B1FZS681 | € 174.53 | € 173.82 | -0.41% |
| Invesco US Treasury Bond 3-7 Year UCITS ETF USD Dist (EUR) | Govt Bond Mid | IE00BF2FNQ44 | € 262.78 | € 265.02 | +0.85% |
| iShares J.P. Morgan EM Local Govt Bond UCITS ETF USD (Dist) (EUR) | Govt Bond Long | IE00B5M4WH52 | € 383.32 | € 379.61 | -0.97% |
| iShares $ Treasury Bond 7-10yr UCITS ETF USD (Dist) (EUR) | Govt Bond Long | IE00B1FZS798 | € 372.80 | € 370.60 | -0.59% |
| iShares $ Treasury Bond 20+yr UCITS ETF USD (Dist) (EUR) | Govt Bond Long | IE00BSKRJZ44 | 0 | € 282.61 | N/A |
| Invesco Bloomberg Commodity UCITS ETF (EUR) | Commodities | IE00BD6FTQ80 | € 333.25 | € 321.74 | -3.45% |
| Xtrackers Physical Gold ETC | Gold | GB00B5840F36 | € 492.48 | € 470.18 | -4.53% |
| SPDR® MSCI Europe Small Cap Value Weighted UCITS ETF EUR Acc | Equity | IE00BSPLC298 | € 175.75 | € 182.10 | +3.61% |
| SPDR® MSCI USA Small Cap Value Weighted UCITS ETF USD Acc | Equity | IE00BSPLC413 | € 453.60 | € 477.12 | +5.19% |
| € 3,419.29 | € 3,698.28 | -0.11% | |||
Input for post about investing in Government Bonds with negative yield
I have come across a topic that would be interesting to look into further for my next deep dive blog post. It is the question driven by the current market conditions in most notably Europe, namely Government Bonds with interest rates below zero, i.e. with negative yield.
What I look to cover is the question of who invests in these products and why, and should such negative yielding asset still be a part of an All Seasons Portfolio?
So if you have any particular question or comments about this subject that you would like me to cover, let me know in the comment section below, and I will do my best to have your thoughts included.
And if you missed it, I published such a deep dive post about the Commodity part in my portfolio and about that particular ETF. Read more about why you should invest in commodities .
That’s all I had in mind to cover this time. Appreciate if you let me know your thoughts by leaving a comment and a kind word.
We’ll catch up again shortly,
Nicholas
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P2PInvestingtips
14 Dec 2019Hi Nicolas – Love the updates and transparency! One question for you – You are quite young still so I was wondering why you don’t have a portfolio with a higher exposure to riskier assets? While this would be more volatile in the short run, in the long run it is thought to yield a higher return. What are your thoughts on this?
Also wondering what brokerage account you use? Keep the updates coming I will be watching with interest!
Nicholas
14 Dec 2019Hi,
Thanks a lot for your good question and the kind feedback!
I completely agree with you that in a younger age, you have more room to increase the risk in the portfolio when investing over a longer period of time. Nothing wrong with being all in on the stock market in such case.
That said, the All Seasons Portfolio I am showing here is not all of my investments. Besides this portfolio, I am investing directly into stocks as well as some peer to peer lending, mainly here in Sweden and Europe. My stocks are currently up around 35% YTD for reference. When it comes to sizes of the two portfolios, my stock portfolio is currently the bigger one than my All Seasons Portfolio, and still with a great margin.
So why do I also maintain this All Seasons Portfolio? Well, that has many answers, but first and foremost, I am fascinated about how macroeconomics impact investments and different kinds of assets. It started with seeing how the stock market moves when the Fed changed its interest rates or when Trump first got elected and the stock market first dropped massively, only to bounce back within two days. So investing with the All Seasons Portfolio and blogging about it, is a great way for myself to learn more about macroinvesting. And this past year, I have learned a tonne.
Secondly, this blog gives me a great opportunity, at the same time, to teach and inspire others into investing. Most people, and especially those who are older than me, need to invest more to be able to enjoy retirement when it comes. These investors should also be more risk adverse, so that is why I want to show how this low risk portfolio theory can be achieved in practice. That is my main mission with this blog.
As for my broker, I am using Degiro which provides good access to a great amount of ETFs available in Europe and with low commissions.
I’d be happy to have you as a follower, and don’t hesitate to drop me more comments!
Happy holidays ahead,
Nicholas