How I Track My Portfolio Against the STI Index

I track my portfolio against the Straits Times Index, or STI, because it gives me a practical Singapore market benchmark. My holdings are not designed to copy the index exactly. I own a mixture of Singapore shares, cash, Singapore Savings Bonds and other assets, so the comparison helps me see whether my stock-picking and asset allocation are adding value or simply producing a result that the broad market would have delivered.

The process is deliberately personal rather than professional research. I record balances, dividends, deposits, withdrawals and market prices in a spreadsheet, then compare the portfolio’s total return with the STI over the same period. For an Australian reader, the closest mental comparison is tracking a personal share portfolio against the S&P/ASX 200, while remembering that Singapore’s market has its own concentration, currency and dividend characteristics.

Choosing a useful benchmark

The STI is a market-capitalisation-weighted index made up of major companies listed on the Singapore Exchange. Banks, property groups, industrial companies and telecommunications firms have a meaningful influence on its movement. This makes it a sensible reference point for a portfolio with Singapore-listed shares, although it is not a complete representation of every company on the SGX.

I use the STI as a yardstick rather than a target that my portfolio must beat every month. A portfolio holding DBS, OCBC, UOB, Singapore Technologies Engineering or Singapore Exchange may move in a broadly similar direction to the index. A portfolio tilted towards smaller companies, REITs or particular sectors can behave very differently, even when the headline index appears fairly calm.

There is a technical detail that matters: the commonly quoted STI level is generally a price index. It reflects changes in share prices, but the headline number does not give the full benefit of dividends paid by the companies in the index. Since Singapore shares often have attractive dividend yields, I try to compare my total portfolio return with a total-return version of the benchmark where reliable data is available. If I use the ordinary quoted index, I record that limitation beside the result.

Recording the starting point

I begin each performance period with a dated portfolio value. This includes shares at their market value, cash held for investing and, where relevant, investments that I intend to compare with the portfolio. I keep Singapore Savings Bonds and fixed deposits separate when I am measuring the performance of equities, because their returns come from different sources and their prices do not fluctuate in the same way.

Every contribution is recorded on the date it enters the account. The same applies to withdrawals, transfers and cash used for expenses. This prevents a large deposit near the end of a month from being mistaken for investment growth. A simple percentage change between the opening and closing balances can be badly misleading when money has moved in or out during the period.

I also record dividends when they are received, rather than waiting until I happen to review my bank account. Brokerage charges, exchange costs and taxes are included in my tracking when they are directly connected with a transaction. I do not treat my regular household savings as investment performance. Keeping those categories apart gives me a clearer view of what the market and my decisions actually did.

This is similar to the way an Australian investor might separate superannuation contributions from investment returns. A balance can rise because the employer has made another contribution, because markets have increased, or because both events occurred. The spreadsheet needs to show which explanation applies.

Measuring returns without fooling myself

For a simple period with no deposits or withdrawals, I calculate the return as the closing value minus the opening value, divided by the opening value. I add dividends and subtract relevant costs before making the calculation. This produces a straightforward holding-period return that is easy to check against broker statements.

When cash flows occur during the period, I use a money-weighted return or an internal rate of return. This gives greater influence to money that was invested for longer. I sometimes also calculate a time-weighted return, which breaks the period into sections around each external cash flow. That second measure is more useful when I want to judge the investment decisions themselves without allowing the timing of my deposits to dominate the result.

I make the same assumptions for the STI comparison. If my portfolio return includes dividends, the benchmark needs a comparable treatment. If my portfolio is measured in Singapore dollars, I keep the STI in Singapore dollars. Converting one side into Australian dollars while leaving the other in Singapore dollars introduces an extra currency result that can obscure the investment comparison.

For Australians looking at Singapore assets, the exchange-rate issue is especially important. A weakening Singapore dollar against the Australian dollar can reduce the value of a Singapore investment when translated into AUD, even if the share price rises in SGD. I therefore maintain separate columns for local-currency performance and converted performance. The first tells me how the asset performed in its home market; the second shows what the result may look like from an Australian spending perspective.

Understanding dividends and market differences

Dividends are central to my comparison because many established Singapore companies distribute a significant portion of their earnings. I track the ex-dividend date, payment date and amount received, then make sure I do not count the same distribution twice. A share price often falls around the ex-dividend date, so looking at price changes alone can make a dividend-paying investment appear weaker than it really was.

The same issue arises with Australian shares, although the tax treatment differs. An Australian investor may think about franking credits when assessing an ASX portfolio, while Singapore dividends generally do not fit into that same franking-credit framework. I keep the comparison focused on cash and market value rather than assuming that a Singapore dividend has the same after-tax effect as an Australian distribution.

I also compare sector exposure before judging the result. The STI has a substantial financial presence, while the ASX 200 has major exposure to banks and miners. An Australian portfolio with BHP, Rio Tinto or Fortescue can diverge sharply from Singapore shares when iron ore prices move. A portfolio concentrated in Australian banks may also respond differently to Reserve Bank of Australia decisions than Singapore banks respond to local or regional conditions.

This is why I avoid making a dramatic claim from a single quarter. A portfolio can lag the STI because it holds more cash, has fewer banks, or has just paid brokerage and received no dividend during that window. I look for patterns across six months, one year and several years, then read the numbers alongside the portfolio’s purpose.

Keeping performance in context

Performance is only one part of my household financial record. A strong month in shares does not automatically mean that the household is in a stronger position if insurance premiums, rent, transport and other bills have risen. I track those items separately, because investing decisions are affected by how much spare cash remains after ordinary commitments. My notes on insurance premium review are part of that wider budgeting picture.

I also record the opportunity cost of holding defensive assets. When I keep money in Singapore Savings Bonds or a fixed deposit, I accept that it may earn less than shares during a rally in exchange for stability and access to planned cash. My personal Savings Bond comparison helps me explain why those balances are tracked separately rather than quietly blended into an equity return.

For an Australian household, the equivalent decision might involve keeping cash in an online savings account, using a term deposit, or leaving money in an offset account while investing through an Australian broker. The right reference point depends on the purpose of the money. Comparing a three-month emergency reserve with the ASX 200 would create a meaningless result, because the reserve is intended to be available and stable rather than exposed to market swings.

I also write down the reason for each significant transaction. If I bought a company because I believed earnings would grow, I later check whether that belief still holds. If I sold because the position became too large, I assess the portfolio risk rather than treating the sale as a market-timing victory. This record keeps the performance figure connected to actual decisions instead of turning it into a scoreboard.

Reviewing the results over time

At the end of each month, I update the spreadsheet and save a snapshot. The monthly review includes total portfolio value, net contributions, realised gains, unrealised gains, dividends, fees and the STI return for the same period. I also note major events such as a rights issue, stock split, special dividend or change in the holdings.

Every quarter, I calculate the gap between my portfolio and the benchmark in percentage points. A result of 8 per cent for my portfolio against 6 per cent for the STI means the difference is two percentage points, not a claim that I achieved a 33 per cent outperformance. Using percentage points makes the comparison easier to interpret and prevents favourable wording from hiding a small numerical advantage.

I review rolling one-year and three-year figures because individual months can be noisy. A Singapore bank dividend, an unexpected policy announcement or a sharp movement in the Australian dollar can distort a short period. Longer windows show whether the portfolio’s choices have been consistently useful after costs, or whether one fortunate holding created most of the apparent advantage.

I also accept that lagging the STI is sometimes a reasonable outcome. Holding cash for a known expense, reducing exposure to an expensive share, or keeping a diversified allocation may produce a lower return during a strong rally. The record is valuable because it shows the trade-off clearly. It helps me decide whether the result came from a deliberate choice, an avoidable mistake or ordinary market variation.

I keep this tracking as a personal record, not a promise that future returns will resemble past performance. Anyone using the method should account for their own tax position, currency exposure, investment timeframe and risk tolerance. The useful habit is the consistent measurement: define the benchmark, record cash flows, include dividends and costs, and revisit the explanation behind the numbers.

A simple spreadsheet can reveal more than a brokerage balance viewed in isolation. Record your starting value, contributions, withdrawals, distributions and fees, then compare the result with the STI or an appropriate Australian benchmark such as the ASX 200. Over time, that evidence can show whether your portfolio is meeting its purpose and whether each investment decision still deserves a place in the record.