Friday, December 31, 2021

2021 Review, 2022 Preview And Bob

Very soon we will see the end of 2021 and the beginning of 2022 in a few hours’ time. In this post, I will share my views for the past year, my opinions of the coming year, and give an update on Bob’s portfolio.

2021 Review


As mentioned in the last preview, 2021 was still dominated by the COVID-19 narrative, with a couple more viral variants taking the spotlight; first we had the delta, and now we are going through the omicron spike. There was no global consensus on tackling the pandemic, with some places adopting a zero tolerance, some embracing an endemic approach, and others somewhere in between, but almost all agreed that vaccination is the way to go.


Despite these, the global markets and economies were experiencing a growth surge as if the pandemic had taken a back seat. Illustrating this point, the S&P 500 index had risen 27.23% year-to-date (YTD) as at 30 Dec 2021, with our local Straits Time Index grown at 9.84% YTD as at 31 Dec 2021. The quick recovery, however, had brought about a supply chain issue on a worldwide scale, with the faster-than-expected rebound of demand and the hard-to-catch-up supply side. This was seen as one of the major reasons in pushing the inflation rate up. All around, the price of items ranging from food and holiday gifts to energy (electricity, oil, etc.) are rising.


One more thing, here are the three counters which are representative of my “next big thing” (i.e., cybersecurity, electronic payments and alternative energy respectively), and see how they performed in 2021:


HACK: +7.96%1

IPAY: -12.34%1

ICLN: -24.09%1


Well, every day is not a Sunday, but do think long term.


2022 Preview


As usual (again), I would like to give a disclaimer that I really do not know what the future holds. Judging from the current trend, the inflation issue, and the (highly probable) accompanying raising of interest rates by the U.S. Federal Reserve, may dampen the growth of markets and most asset classes (see here and here for more info). There is a silver lining, though, as not all sectors/industries are adversely affected by rising interest rates, such as banks, where their profitability typically stems from the difference between lending and savings rates, and companies in the consumer staple/essentials sectors, where their products and/or services are still used, high rates or not.


The next big thing (even so it has been big for the past two or three decades), for at least the next decade, would be China. In the face of a lot of news (not all are good) and the geopolitical situation, China’s markets and economy are worth exploring due to their contrasting features; they may be autarkic in certain areas (e.g., their own technology sector), yet they are considered a major manufacturer for the world. This simultaneous independence, interdependence and dependence of markets, economy and trade, especially with U.S. and European ones, made it a good investment area to consider. 


Another talking point for 2022 would be the potential hype of the metaverse. The technologies behind this concept is not new, like virtual reality, gaming, networking, etc. Yet it is the seamless mashing of these, plus the normalisation of being connected from anywhere anytime, meant that mainstream adoption of the metaverse could be possible.




As at 31 Dec 2021, Bob’s Bedokian Portfolio had grown to slightly above SGD 80,800 in value (excluding the cash component which is not shown) and gained a dividend amount of SGD 1,817.21. All asset classes (except cash) had shown healthy growth for 2020. Bob will rebalance on 3 Jan 2022 with another SGD 5,000 injection, so stay tuned to his portfolio.


Happy 2022!




The Bedokian is vested in HACK, IPAY and ICLN.





1 –, YTD as at 30 Dec 2021 (accessed 31 Dec 2021).


Monday, December 13, 2021

Inside The Bedokian’s Portfolio: ETFMG Prime Cyber Security ETF

Inside The Bedokian’s Portfolio is an intermittent series where I will reveal what is actually inside our investment portfolio, one company/bond/REIT/ETF at a time. In each post I will talk a bit about the counter, why I had selected it and what lies ahead in the future. 

Today, I shall introduce a thematic exchange traded fund (ETF) and that is the ETFMG Prime Cyber Security ETF (ticker: HACK).


The Everpresent Threat


I had identified cybersecurity as one of the sectors to go into back in Dec 2017 after analysing the then-trends and formulating a series of educated guesses, or “guesstimates” as I liked to call them. The field of cybersecurity has evolved from simple antivirus programs and software back in the 1980s to combatting threats from not just the virtual realm (worms, trojans, etc.) but also of human origin, too (hackers, crypto thieves, etc.).


The importance of cybersecurity has never been so high now, with malware attacks happening daily, and cryptocurrencies and personal information being the new targets. Just a few days ago, a crypto exchange was subjected to hacking and millions of dollars’ worth of cryptocurrencies were pilfered. 




There are a number of cybersecurity ETFs around and all are listed overseas. The top two ETFs in terms of asset-under-management (AUM) are HACK and the First Trust NASDAQ Cybersecurity ETF (ticker: CIBR). Comparatively, HACK is smaller than CIBR in terms of AUM, though both have the same expense ratio (0.6%)1. The main reason on why I chose HACK over CIBR was that the former is more diversified. HACK has a total of 64 holdings2 compared to CIBR’s 363, and HACK’s top ten holdings constituted 24.98% of the ETF2 while CIBR’s is 45.28%3. Furthermore, there are some overlap holdings between the two, such as Cisco Systems, Palo Alto Networks, Tenable Holdings, etc. 


Looking Forward


The global cybersecurity market is forecasted to grow to USD 345.4 billion by 2026, up from the projected USD 217.9 billion by the end of 20214. With the huge prevalence of computers and mobile devices, digital life and virtual stuff, and as long as there are people with ill-intent (whether individuals, groups or state-sponsored), the threat is always there.




Bought HACK at: 


USD 61.00, January 2021



1 – Though most of the other cybersecurity ETFs have lower expense ratios than that of HACK’s and CIBR’s, I had shortlisted the latter two due to their AUM size.


2 – HACK factsheet. 30 Sep 2021. (accessed 12 Dec 2021)


3 – CIBR factsheet. 30 Sep 2021. (accessed 12 Dec 2021)


4 – Size of the cybersecurity market worldwide from 2021 to 2026. August 2021. (accessed 12 Dec 2021)

Thursday, December 2, 2021

The Bedokian’s (Very Late And Very Short) Review Of Digital Core REIT IPO

By the time you are reading this, you would have left about a few hours to decide on whether to subscribe to the Digital Core REIT IPO, whose application closes at 12:00 PM today (2 Dec 2021).

Several financial bloggers had covered this IPO and their views ranged from good to not-so-good. Summarizing some of the selected good and not-so-good points (which includes mine), here it goes:


Why Good?

Why Not-So-Good?

Low gearing (27%)

Subject to withholding taxation risk

All freehold properties

Not-so-new buildings (built between 1972 and 2001, though 5 of the 10 properties had undergone at least one renovation)

100% occupancy

Rental escalation does not keep up with prevailing and projected U.S. inflation rate

Strong sponsor (of data centres)

Top 3 customers provide 78.3% of base rental income (for June 2021)

Data centre a current in-thing



The Bedokian’s Take


Both sides of the argument seemed reasonable and relevant. My answer on whether to apply for this IPO, as always, is “it depends”. The numbers looked relatively alright to me (low gearing, relatively good WALE, reasonable yield), but the REIT is not well diversified to my preference (78.3% of rental income comes from 3 customers as of the month of June 2021, and 76.2% and 76.9% of forecast year 2022 and projection year 2023 revenues, respectively, are from 4 of the total 10 properties). However, I would say the concentrated risk is mitigated by the fact that the data centres are in the Western Hemisphere (read: tech region), and 7 of them are at the coveted tech locations (4 in Silicon Valley and 3 in Northern Virginia). There is growth potential for this REIT, given that its sponsor is having a lot of data centres in their inventory, the main concern would be the type and quality of data centres to be injected.


I may not apply for this, but I would keep this REIT under my watchlist.




Digital Core REIT prospectus (29 Nov 2021). (accessed 1 Dec 2021)