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Simple HKSE portfolio - starting out

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  1. #1

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    Simple HKSE portfolio - starting out

    I thought it useful to try and construct an investing portfolio for someone just starting out. The premise for this is you are just starting out and only have a small amount each month to invest, and this will eventually grow.

    The portfolio would be based on HKSE listed ETFs whereby you will be a set amount each month. Why HKSE listed ETFs? Because of the low barrier of entry. It is easy to open an investment account with most HK banks and if you are paid in HKD, you don't have to worry about currency conversions or opening a separate brokerage account. We are talking KISS here.

    I reckon the strategy is good for anyone trying to build a portfolio up to USD50k / HKD400k. After that you may want to consider about investing in UK listed ETFs.

    I would avoid investing in specific company shares but stick to ETFs.

    The portfolio is a mix of equities and bonds as follows:

    2800 (The Tracker Fund of Hong Kong): https://www.trahk.com.hk/eng/
    3140 (Vanguard S&P 500 ETF): https://www.vanguard.com.hk/portal/m...UITY##overview
    3101 (Vanguard Developed Europe): https://www.vanguard.com.hk/portal/m...UITY##overview [I would however say that this one is optional]
    2819: (ABF Hong Kong Bond Index): ABF Hong Kong Bond Index Fund

    Its really up to you how to split between equities and bonds but I would reckon the majority of your portfolio should be in 3140.

    The above gives you a diversified portfolio of developed (USA and Europe, if need be) and developing (China) markets. In addition you get the bond anchor of HK government debt. This isn't a fully worldwide portfolio but I think it works for someone starting out and has less than USD50k / HKD400k to start of with.

    For both 2800 and 2819 you can invest via various bank's monthly stock investment plans, meaning you can invest around HKD1k a month per ETF. It seems that 3140 and 3101 are not included in many monthly stock plans, but their barrier of entry is quite low at around HKD2k minimum per trade.

    2800 is very liquid and 3140 and 3101's liquidity is improving. 2819 is not quite liquid, but is the only decent bond ETF I could find listed on the HKSE and 2819 is made up mainly of HK government debt.

    Remember the above is trying to keep things simple for someone just starting out to build a portfolio.

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  2. #2

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    Yes, I do agree with 2800 being a good starting point for almost any HK based investment.

    However, I do feel that every 2800 (or any ETF for that matter) investor should take a look at the top 10/15 holdings and be comfortable that they're investing primarily in those companies.

    I will come back and nit pick on page 3 of this thread.

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  3. #3

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    What are your thought son 2805 vs 2800?

    2800 is a lot cheaper and more liquid but it primarily focuses on HK/China
    2805 has some overlap with 2800 but also has Samsung, Taiwan Semiconductor and other Emerging markets for more diversification.


  4. #4

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    Quote Originally Posted by Jamthe:
    What are your thought son 2805 vs 2800?

    2800 is a lot cheaper and more liquid but it primarily focuses on HK/China
    2805 has some overlap with 2800 but also has Samsung, Taiwan Semiconductor and other Emerging markets for more diversification.
    Very low liquidity.

    I'm trying to keep this portfolio as simple as possible.

  5. #5

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    People will complain and find faults, but for many beginners this will be a good starting point indeed.

    Great job, and Thanks!

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  6. #6

    I just want to add on the above that with Standard chartered bank you can purchase on HKEX without any commission fees. Correct me if I'm wrong.

    The same is true if you do Monthly Stock Plan with any banks in HK?

    One question about the 2819: I remember to have read in some post in this forum that 2819 fund is correlated to stocks, but from the graph below doesn't look like. Am I missing something?


    Another question:

    How did you decide that this strategy might work up to a portfolio of 400K HKD Size?

    Last edited by Kronosoma87; 28-08-2018 at 10:20 AM.

  7. #7

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    2819 seems to be a bond fund. Anyways, here's the graph compared to 2800 over 5 years.

    Name:  Screen Shot 2018-08-28 at 10.30.12 AM.png
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  8. #8

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    Quote Originally Posted by Kronosoma87:
    I just want to add on the above that with Standard chartered bank you can purchase on HKEX without any commission fees. Correct me if I'm wrong.

    The same is true if you do Monthly Stock Plan with any banks in HK?

    One question about the 2819: I remember to have read in some post in this forum that 2819 fund is correlated to stocks, but from the graph below doesn't look like. Am I missing something?


    Another question:

    How did you decide that this strategy might work up to a portfolio of 400K HKD Size?
    2819.hk is a bond etf. The etf invests in HK government debt. You are not going to get crazy returns on it, but what you will get is an anchor whenever there is market volatility. Some people disagree with having bond etfs in a portfolio and it really depends on your risk appetite.

    Again, I should re-iterate, the sample portfolio I have suggested is trying to keep things as simple as possible.
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  9. #9

    What are your thoughts on adding in the mix the Vanguard Fund 3126?

    The Assets under management is quite little though ...

    https://www.vanguard.com.hk/portal/m...UITY##overview


  10. #10

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    Quote Originally Posted by Kronosoma87:
    What are your thoughts on adding in the mix the Vanguard Fund 3126?

    The Assets under management is quite little though ...

    https://www.vanguard.com.hk/portal/m...UITY##overview
    Read my first post about what I'm trying to achieve.

    You are trying to over construct and over complicate what is supposed to be a very simple portfolio.
    shri and jrkob like this.

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