Singapore Permanent Portfolio Performance

This is a simulated Singapore Permanent Portfolio started on 3 Jan 2012 with S$100,000 capital. We will track the performance with real prices, dividends, interests and costs going forward. You can judge the robustness of this portfolio during the bad times with the worst drawdown and the equity curve that we have calculated and built.

If you are not sure what is Permanent Portfolio about, I will explain it in a nutshell:

  • A portfolio consisting of four equal asset classes: Stocks, Bonds, Gold and Cash
    • Stocks: STI ETF (ES3)
    • Bonds: Singapore Government Bonds (30 years), NA16100H 460301 (BJGS)
    • Gold: SPDR Gold Shares (O87)
  • Gives you decent returns with very low drawdown even during a stock market crash

We have written a decent number of articles about permanent portfolio which we urge you to read. You can read The Singapore Permanent Portfolio book for more details.

For a full view of the spreadsheet, please visit this link (you can also download the Excel file for your personal tracking).

Notes:

  • Data on Singapore Government Bonds were not easily attainable before their SGX listing on 8 Jul 11. Hence, we chose Jan 12 to have an easy start state.
  • You can input the figures to the blue coloured cells and most of the values will be calculated automatically.
  • We will update this portfolio at the end of each month.

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42 thoughts on “Singapore Permanent Portfolio Performance”

  1. Why is it that when I try to get to link to your Singapore permanent portfolio performance ‘ visit this link’, it directed me to Google’s website ?? I cannot reach your PP spreadsheet. Hope you can assist.

    Reply
    • hi, I believe you need a gmail account to access the spreadsheet. once you are at the google spreadsheet, you can download the Excel version.

      Reply
  2. Hi Alvin,
    You have a very good site here. I was just reading up on all that is there here about the Permanent Portfolio, but got a bit confused with the Performance shown here. You have started with 100K, and divided equally into 4 assets. How is it that the Cash component has grown from 25K to 28K? It seems you have put it in something called Phillip Money market fund, is it that this fund outperformed the Bonds, even though it is also putting money into highly liquid debt instruments? Bit baffling to me that the Cash component grew so much when compared to other classes. Or am I missing something in my understanding?

    Reply
    • Cash grown because of the following reasons:

      1) Dividends and coupon payments from STI ETF and Bonds respectively

      2) Instead of Money Market Fund, the model portfolio used short term bonds to represent cash. The short term bonds was cashed out for some capital gains as I decided to just use cash going forward.

      The cash component grew while other asset classes underperform. Hence, it appeared cash performed very well.

      Reply
  3. Hi Alvin,
    Thanks for your reply. In that case, it confuses me a bit. Then is it that, this is not strictly following the permanent portfolio concept? Because, by doing above, you have put 25% in stocks, 25% in gold and 50% in bonds? Or is it that it is 25% long term bonds and 25% short term bonds (which we call cash). Basically, if I were to start on a portfolio myself, assuming say I’m going to invest $1200 a month, should I split it into $300 each for 4 categories, or into $400 each and into 3 categories – stocks+bonds+gold? What’s your take?

    Reply
    • For cash, you can put in savings account or buy short term bonds. Short term means less than 3 years. Short term bond price doesn’t fluctuate much and hence, as safe as cash.

      $1200 is not enough to buy all the assets. They must meet the minimum lot size.

      Reply
  4. Ok understood now. And sorry.. I have one more last question!
    In your example portfolio, you’ve started with 100K and left it untouched since and looks like it will be touched only if need to be rebalanced if it hits thresholds (15%/35%). However, in a normal scenario, we are continually earning money and hence need to continually keep investing that money. So instead of starting out with 100k, if I start out with 25K and then put 25K every qtr (each time equally split into 4 assets unless there is a need to rebalance), is that the normal way to start & maintain a permanent portfolio?

    BTW these numbers of 1200$, $25K etc are just random numbers for convenience sake, doesn’t exactly mean I have this much amount to invest, I’m only trying to understand the math clearly first 🙂

    Thanks for your patience to reply!

    Reply
    • The correct way is to add your money into the cash component every month. When the cash becomes 35% of the portfolio, balance the portfolio back to 25% for each asset class.

      Reply
  5. Ahh! Didn’t think of that! Makes perfect sense. Thanks Alvin for all the extra help. The new year is here, am thinking am going to follow this now. Have been rather randomly making investments in the past and hence it made random sense to me and random returns, now I hope to get a bit more orderly & make sense of things with this Passive investing. The great part is it is low-maintenance which makes all the more sense for busy working individuals like me.

    Reply
  6. The info is most useful and helpful! It seems that the update stopped after Mar-2014 and I am wondering why? Is it because Alvin feel that this is not his cup of tea anymore?

    Reply
  7. Hi Alvin,

    With reference to the spreadsheet, the formula for cost is always “(0.28/100)*Total_Price”. May I know what does 0.28/100 means?

    Reply
  8. Hi Alvin,
    I have two questions regarding the Permanent Portfolio:
    1. Regarding Bond component in the rebalancing of Permanent Portfolio.
    For example, if I started out with 80 bonds in my portfolio, and at one point I find out that rebalancing is required and I have to sell 10 bonds to make it back to 25%. May I know how do I sell this 10 bonds? Are we able to sell part of a say 30 years Singapore Government Securities bond (80 bonds) which I’ve bought? Or right from the start I should have bought 10 bonds of multiple different 30 years SGS bonds, meaning the 80 bonds which I’ve began with should have been made up of 8 different 30 years SGS bonds…?

    2. If I decided to set up a Permanent Portfolio now, do I buy the STI ETF, the next available 30 years SGS bonds and Gold ETF right away or do I patiently wait for each of their price to drop first?

    Sorry if they are stupid questions.. Thank you!

    Reply
    • 1. I am assuming you are referring to the Singapore Government Bonds. These bonds are traded on SGX so you can sell them like how you sell stocks via your brokerage account. Each lot of SGS bonds is 10 bonds. Hence you won’t have problem selling 10 bonds.

      2. You should do it all at once.

      Reply
  9. Hi Alvin, is the 30 yr bond in SGX liquid enough to prevent large spread? I’m invested in US version of the PP (using US$) and considering converting to Singapore version (using S$), do you think it is better to leave in US$ PP since interest rate is likely to rise? Thanks.

    Reply
    • Yes. It is liquid because market makers (financial institutions) will buy and sell with investors, provided the price is within the price spread.

      You should invest in the currency that you work and want to retire in. PP is not about guessing any economic direction.

      Reply
  10. Hi Alvin

    I noticed that the price of the bond you used for your update on 28 Feb 2018 does not tally with the price I found on MAS website. The closing price I saw on the MAS website is $98.40 while yours is $103.67.

    Why is there a difference?

    BTW, I also noticed that there is hardly any transaction of the bond on SGX. So, does that mean we need to go direct to the banks to buy or sell.

    FYI, I had just came across your Permanent Portfolio concept last week and had managed to borrow your book from NLB.

    Reply
    • We follow SGX numbers since the bonds are traded on the exchange. MAS might have use the clean price – without accrued interest.

      The bonds have market makers to deal with you. These are traders who hold inventories of the bonds and are paid to provide liquidity to the market. If the price is right, usually within the bid and ask range, they would buy and sell with you. So using any stock broker is fine.

      Reply
      • Is there a desync in the price data between what is shown on open source data like yahoo finance and what is shown on Bloomberg terminal?
        On yahoo finance, the bond seems to have flatline at $90. But Bloomberg terminal shows otherwise.
        So what is the real price of the bond now – still $90?

        Reply
  11. Hi Alvin

    I just read your book, The Singapore Permanent Portfolio.
    I have one question here. In your book you choose 30 years Singapore Government Bond as the 25% bond component. However, can we replace it with the Bond ETF, eg. ABF Singapore Bond Index Fund?
    Please advise.
    Thanks.

    Reply
    • It was also mentioned in the book that the ABF Singapore Bond Index Fund would not be so suitable as the volatility is insufficient to counter that of the movements in stocks. This is because the ABF Bond ETF is a mix bag of varying maturity, including short term bonds. Longer dated bonds are more volatile and necessary in the Permanent Portfolio.

      Reply
      • Thank you Alvin for your reply. But the liquidity of the 30-year government bonds is so low, how can we purchase it in the secondary market? Do you have any good suggestions as where we can buy this 30 years government bonds? Thanks.

        Reply
  12. i see the excel spreadsheet last updated date is 30 apr 2018. is the excel sheet still regularly updated?

    may i know when is “your” rebalancing date?

    cheers

    Reply
  13. Hi Alvin, I came across 60/40 stocks and bonds portfolio. Seems like it gives a higher return than Permanent Portfolio. What’s your thoughts on this? Especially in Singapore context.

    Reply
    • I think it will work too. The problem is cannot just compare performance like this. There are a lot of factors whether a particular strategy is suitable for you. E.g. will you abandon a strategy because you lose faith when it isn’t working? Are you able to take the swing? Are you willing to take the consistent effort to rebalance your portfolio?

      Whether it is 30-70, 60-40, 10-90, doesn’t matter much to the returns. There isn’t a best portfolio. There’s only a suitable portfolio.

      Reply

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