I've just had a look how my ETFs fared during the market crash of the past two weeks. We have been on an extended bull run for quite some time now and this sudden volatility and crash has made me re-assess my portfolio, as I now have some evidence of what happens in down market as well as an up market.
My ETF portfolio from best to worst performance:
Satrix Quality SA Port (STXQUA) + 2.11 %
CORESHARESTOP50 (CTOP50) - 4.05 %
Satrix MSCI EMG Markets (STXEMG) - 4.12 %
Ashburton Gbl 1200Eq (ASHGEQ) - 6.43 %
Satrix INDI Portfolio (STXIND) - 8.57 %
CoreShares Global Prop (GLPROP) - 10.63 %
Sygnia Itrix 4Ind Rev Gb (SYG4IR) - 11.84 %
My thoughts on the results:
STXQUA was the top performer in the crashing market and the only one that stayed green. Although this is not strictly a high dividend ETF, dividend yield are used to determine the quality of the companies in the ETF, so it's kind of a hybrid. But the performance in this rout has confirmed the theory of the importance of a high dividend yield ETF as part of a balanced portfolio as a bear-market hedge and convinced me it is a crucial part in my TFIA portfolio. I shall therefore be adding STXDIV as well over the next few months.
Globally, emerging markets performed better than developed markets, even in the crash. Its ability to outperform developed markets in both bull and bear markets has convinced me that I was wise to have equal holdings in both ASHGEQ and STXEMG. I'll carry on buying these two in equal proportions.
STXIND: Just as Bandit has always warned about Market Cap distribution, a 16% drop in Naspers has totally hammered this ETF, which is comprised of roughly 40% Naspers. This is a perfect example of the dangers of both market-cap-distributed and industry-specific ETFs. That being said, it has been the top performer over 10 years, so I won't sell it, but I think I'll keep it capped at 10% of my portfolio.
SYG4IR: Yeah, yeah, what can I say? I knew this would be a gamble, and so far my pile of chips is way down. Should I sell out or go all-in? The trouble with this one is that I think the rewards will be seen in the very far distant future (maybe 10 years), so it's a massive risk to keep buying this one for 10 years. If I'm wrong, I've wasted 10% of my TFIA, but if I'm right, my pile of chips will become mountains of chips. Tough call...