Disclaimer: This research should be used purely for informational purposes and is my own personal opinion. I bear no responsibility to whatever investment decisions taken by anyone with regards to this research.

It has been a fruitful 2 months since I began coverage on the stocks in my portfolio. Much has changed since then. Investors in the market, are ignoring bad news about the global economy and focused on the light at the end of the tunnel. Oil prices recovered from its disastrous supply and demand mismatch in Apr 2020. Countries around the world started to reopen their economies after extended periods of lockdown, increasing market sentiments. However, we also saw tensions between the 2 biggest economies in the world sour over accusations of the origins of Covid-19 and the national security law in Hong Kong. 

In my last monthly update here, I highlighted that the stocks portfolio I am covering have higher returns than the overall market, and that certain sectors such as Manufacturing, Construction, Technology, Utilities and Media have higher rates of rebound in share price than other sectors. I will be updating on these 2 points chiefly.

1. Portfolio returns remain higher than the overall market with higher volatility, but has further outpaced market returns.
2. Manufacturing and construction companies in the portfolio have outperformed other sectors, providing support to the strategy of accumulating stocks in sectors that have higher rates of rebound.

Portfolio returns remain higher than the overall market with higher volatility, but has further outpaced market returns.

In these 2 months, my stocks portfolio averaged returns of 7.0% compared to KLCI’s average return of 2.1%. The portfolio’s return have further outpaced KLCI’s returns by 4.9% compared to April’s returns (+3.7%). While the portfolio’s risk is higher at a standard deviation of 3.4% (KLCI: 2.5%), the 95% confidence interval indicates that the portfolio (5.4% to 8.6%) outperforms the general market (0.9% to 3.4%). 

Much of the higher returns are contributed by Lotte Chemical Titan (+98.3%), Cahya Mata Sarawak (+31.7%), Padini (+21.2%), Gamuda (+18.9%), DKSH (+13.8%), and Alliance Bank (+13.5%). The worst performing companies are Dayang (-6.6%), Aeon Co (-5.6%) and Formosa Prosonic (-3.0%). 

Manufacturing and construction companies in the portfolio have outperformed other sectors, providing support to the strategy of accumulating stocks in sectors that have higher rates of rebound.

In April’s monthly update, I highlighted that there was indeed an opportunity to accumulate stocks in the technology, telecommunications, media, utilities, construction and manufacturing sectors. The rate of rebounds from these sectors after a downturn were higher, as they were more oversold. 

In the month of May, I added the companies of Dayang, DKSH Holdings, Gamuda, Formosa Prosonic, Magni-Tech Industries and Kerjaya Prospek which were concentrated in the Manufacturing, Construction and Services sectors as part of the strategy. To date, Gamuda (+18.9%), DKSH (+13.8%) and Magni-Tech Industries (+11.8%) were the best performing stocks. From the stocks portfolio, the manufacturing sector had the best performance at +25.5%, followed by the construction sector (+15.0%).