I calculated portfolio performance vs. alternative index investment for 2010 and also for 2009. In 2009 my gain (partly realized, partly unrealized) was 23% while comparable investment to index fund investing into MSCI All Country World Index (ACWI) would have yielded 23.8% year-on-year.
In 2010 my portfolio gained 16.3% while the ACWI index fund would have gained 19.5%. I lost to the index mainly due to my high cash and gold positions and overall defensive portfolio. I think this was quite expected. I also think I am underinvested currently to emerging markets, but I will correct this long term.
If my portfolio vs. index fund is compared starting from 1.1.2009 with no "reset" at year end in comparison then the numbers are 48.8% vs. index fund 53.9%.
The allocation at year end was:
Cash 10.8%
Gold 14.4%
Mining stocks 12%
Utilities 13.5%
Oil & Gas 11.3%
Pharmaseutical/Healthcare 14.3%
Telecommunications 13.5%
Technology stocks 10.2%
In terms of geography the allocation for stocks is:
Europe 44.9%
North America 44.4%
Emerging Markets 10.7%
Note: There is no index fund investing into MSCI ACWI and re-investing dividends. Therefore, I have constructed my own imaginary benchmark index fund out of MSCI ACWI index (net index in euros) against which I compare my performance. You can find a post from December describing the process in detail.
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