Ending 2019 full of volatility, from panic to excitement and finally to disappointment at the end of the year, total asset-under-management of GR still maintain stable profit at 24.92%, 20% higher than the benchmark growth of VN30-Index for the second year since inception…
Dear Investors,
Ending 2019 full of volatility, from panic to excitement and finally to disappointment at the end of the year, total asset-under-management of GR still maintain stable profit at 24.92%, 20% higher than the benchmark growth of VN30-Index for the second year since inception (the returns is slightly lower because of new capital injection at the end of the year). Nonetheless, this result creates a lot of pressures on us in short-term because of the fact that almost all the high-quality stocks continue to anchor at high valuation, while the worthwhile new listed or IPO/OTC stocks continue to fade out…
Regarding profitability sources, GR portfolio made a huge profit in new UPCOM-listed stocks in industries such as logistics, automobile and telecommunications. However, GR made a mistake of misjudging the management risk at one industrial park company, while also underestimating the risk of margin speculating flows which impact stock price by a wide margin, resulting in falling for “FOMO” (fear of missing out”) psychology traps. If we did not fall for this mistake, GR portfolio would have risen up at least 40%-50% last year!
Regarding risk management, at year-end 2019, GR switch into a lot of cash positions to take chances of a downturn or only after we have met with companies’ management team. Our average portfolio beta is 0.26 and turnover rate is 77%, significantly lower than that of VN-Index average, respectively 1.0 and 111%. We are rather
pessimistic about banks & residential real estate sector, set our main strategy to be uncorrelated with the benchmark, particularly VN30-Index.
Regarding investment direction for 2020, in general, we continue to watch high-quality, favorable growth prospect businesses while turning on defensive mode and investing in defensive stocks with attractive dividend yield. Currently, the market has exposed
3/5 warning red flags, especially the margin speculation frenzy and numerous low-quality or “trash” issues ready to IPO in 2020 (for example FLCHomes, Bamboo Airways, An Gia Group, CleverAds Group, etc). Besides, facing countless over-optimistic recommendations and forecasts from other brokerage firms and fund managers, we are really worried that the markets should be at high valuation that those companies utilize them to list their stocks, sell quickly to gain profit. Thus, we apply a conservative approach to the market but still avoid making mistakes to transform ourselves into macro forecaster instead of value bottom-up picker and their missing attractive opportunities…
Finally, we will continue to try hard to achieve the 20% CAGR long-term goal for you with limited risks in any market cycles; furthermore, we are always optimistic in Vietnamese economic tailwin and stock market inevitable growth in long-term, especially the 2020-2029 decade ahead. May you have a peaceful and happy Lunar New Year with your family!
Sincerely yours,
Mr. Hoang Ha Nguyen – CEO & Portfolio Manager
P/S 1: Average returns of individual investors shall be different due to the capital injection timing as well as account structure (pooled/segregated) in Golden River total AUM. However, we pledge to maintain the similarities up to 80%-90% between accounts and the same long-term return of 20% CAGR
P/S 2: The 2019 audit report, annual report and NAV confirmed official at the financial year-end have been sent via email and notified by SMS to each client
P/S 3: Other interested clients can research about our investment strategies, track record and investment terms/legal form at the link: http://www.goldenriverinvestment.com
