In this 2023 asset allocation article, I will share my year-end allocation in both Malaysia and foreign markets.
Target asset allocation
Malaysia
My target allocation is 10% P2P lending and 90% stock.
I am only considering equities, mutual funds and peer-to-peer (P2P) lending.
Foreign
My current target allocation is 20% in bonds, 74% in equity and 6% in alternative assets. It was changed from 20% bonds, 78% equity and 2% cryptocurrency previously.
My investment assets in foreign markets are made up of exchange traded funds (ETFs) and mutual funds. A portion of these investments is on the robo-advisor platform, MYTHEO. My investment on MYTHEO consists of three portfolios, namely growth, income and inflation hedge. For simplicity sake, I am going to group income and inflation hedge into bonds.
Malaysia vs foreign
My target allocation between the local and overseas markets is 70% and 30%.
2023 asset allocation
Malaysia
My investments in Malaysia are divided into P2P lending (7.68% vs 1H2023: 8.91%) and stock market (92.31% vs 1H2023: 91.09%).
My top three holdings are MAYBANK (24.79%), PAVREIT (12.76%) and UCHITEC (12.45%).
This is still my ideal allocation as I have given myself a leeway of ±5%.
Foreign
My investment assets in foreign markets are 19.30% bonds (1H2023: 21.26%), 76.23% equities (1H2023: 77.48%), and 4.47% in alternatives (1H2023: 1.26%). I consider this allocation to be within my target as I have given myself a leeway of ±5%.
The table below shows the countries that I have equity exposure with their percentages in my foreign portfolio (including mutual funds on Fundsupermart and and ETFs on Firstrade but excluding my portfolios on MYTHEO).
Stock | Percentage |
---|---|
Cash | 7.60% |
China | 15.61% |
India | 11.01% |
Indonesia | 4.63% |
Singapore | 15.23% |
US | 23.80% |
Current asset allocation between Malaysia and overseas
As on 31 December 2023, I have 77.04% (1H2023: 77.87%) of my total investment assets in Malaysia and 22.96% (1H2023: 22.13%) in the foreign markets. I have moved closer to my target allocation [70% (Malaysia)/30% (foreign markets)].
Conclusion of 2023 asset allocation
I still have not attained my ideal allocation between local and foreign markets yet. As I focused primarily on the foreign markets last year, my foreign markets allocation has increased. I will continue to invest more money into the foreign markets in 2024.
Asset allocation is an important determinant of the eventual return of a portfolio. I hope that my allocation will give me the return that I target, which is at least 7% per annum. I have achieved this target in 2023. Let’s see if my portfolio will be able to achieve this in 2024.
Invest and prosper!