Portfolio summary for 2007

2007 had been a relatively good year for my overall portfolio. The portfolio returned around 11%. Of the 11% total return, about 8% is contributed by the equity portion, with the remainder 3% being generated by the fixed income portion. Two asset classes had negative returns — US SmallCap and US REIT. After years of outperformance, US REIT finally had a slump year, dropping almost 16.5% in 2007.

The best returns came from Emerging Market and Precious metal and mining equity, returning 39% and 36%, respectively. They both contributed an aggregate of 5.7% to the portfolio’s return. Healthcare stocks also outperformed US markets in general, returning an average of around 14%.


Because of the fall of the US dollar, fixed income assets which had non-USD allocations also peformed well, gaining around 10% for the year.

Overall, I am quite happy with my portfolio’s performance. Going forward, against the backdrop of economic uncertainty and subprime issues, I believe 2008 will be a relatively poor year for the equity portion — and I would probably see negative returns in more of the equity asset classes. However, there is no need for panic; and I have no intention to deviate from my existing 70%-equity / 30%-fixed income portfolio. Stay the course!

I conclude with a chart showing the breakdown of my portfolio over the past few years (click to enlarge):


Related post : Portfolio summary for 2006.


  1. TFB

    Congratulations on the strong returns in 2007! Your investments in emerging markets, precious metals and health care paid off nicely.

  2. indexfundfan (Post author)

    TFB, thanks for your comment. In 2006, the controversial allocation to healthcare dragged down my performance though. I think the out-performance of emerging markets and precious metals (30+%) for two years in a row look unlikely to continue in 2008.

  3. zany

    Could you talk more about the non-USD fixed income assets? What are the possibilities here?


  4. indexfundfan (Post author)

    zany, the non-USD fixed income assets I hold are not available for general investment in the US. If you are looking to hold fixed income that has exposure to foreign currency, you can consider American Century’s international bond fund (BEGBX) or one of the currencyshares ETF.


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