The Morphing of Core Holdings

Beginning of last year, I decided to have a closer track of the counters which I have a larger position size. I named this group my core holdings as I think I am more likely to hold them for a longer period of time since I am more familiar with their businesses.

The initial nine of them were Raffles Medical Group, Parkwaylife REIT, Straco, Best World, Valuetronics, Frasers Centrepoint Trust, Food Empire, Singtel and Micro-mechanics. And along the year, it has morphed as shown below.

Observation 1

Only 5 of the 9 remain in the list and that is a duration of one year. At first look, the attrition rate seems pretty high and the holding period does not seem to fit one that is in the core list. However, a check on the spreadsheet shows the following.

• Best World was first bought in Sep 2015 before totally divested in July 2017. So the holding period was about 2 years.
• Singtel was first bought in Dec 2016 and just totally divested this month.
• Micro-mechanics was first bought in Sep 2016 and totally divested in Aug 2017.
• Straco was first bought in Sep 2015 and only trim my holding recently.
• The average holding period of the remaining 5 stands at 2.5 years.

Considering the above, I think it’s not too bad.

Observation 2

The total position size of the core holdings has dropped from the high of 75% in June 2017 to 59% in the latest quarter. Again, that does not seem right. Ideally for me, I would like the position size of these holdings to be at least in the high 60%. One reason for the drop in percentage is that there a few stocks which languish just outside the core holdings.

Going forward, I would like to increase the percentage back to high 60% as these are the counters that I am most familiar with.

Observation 3

With the exception of Nordic, I have a spreadsheet that recorded at least the past 5 years’ information of the company. The information includes the financial numbers and ratio and also key events.

Looks like I was too impulsive in my purchase of Nordic. After realising this early this month, I decided to trim my holding on Nordic recently.

Conclusion

While that core holding does not appear as core as it should be, I am satisfied with the current state. Going forward, I will probably add on to my core holdings as they will have the greatest influence on my portfolio performance.