Portfolio Update Apr 2024

This is an update of my investment portfolios for Apr 2024.

My SGX Income Portfolio value rises to $366k from $347k due to capital injection for purchase of DBS and Reits. 

My US/HK Growth Portfolio value inches up to US$17.9k from US$17.7k.

My SRS Ultra Long-Term Portfolio value increases to $163k from $159k.

The US stock markets have attained fresh record highs amidst uncertainties over interest rates, ongoing wars and diminishing fears of global recession. US 10-year and 30-year government yields have rebounded and the Federal Reserve is expected to hold interest rates high with a possibility of no rate cut for the year.

Despite being clouded by uncertainties, immense noises and fears, it is crucial that long-term investors like us always remain calm, unwavered and focused on our investment objectives. Stick to our own plan and continue deploying our financial resources into high quality income-producing instruments such as government-backed risk-free bonds, property assets, or strong growth businesses tactfully according to our own risk appetite. 

This is a month when I am planting more seeds for the future.

Portfolio Actions

1. Bought 310 shares of DBS on 15 Apr.

2. Bought 5,000 shares of Frasers Logistics & Commercial Trust on 16 Apr.

3. Bought 4,000 shares of Frasers Centrepoint Trust on 16 Apr.

Portfolio Dividends

1. Received $302.17 of dividends from Savings Bonds on 1 Apr.

2. Received $340 of dividends from Frasers Centrepoint Trust on 2 Apr.

3. Received $324 of dividends from DBS on 19 Apr.

4. Received 91 bonus shares from DBS on 30 Apr.

SGX Income Portfolio

Portfolio Value = $366k

US/HK Growth Portfolio

Moomoo

US$3.9k

Tiger Broker

US$13k

Syfe Trade

US$1k

Portfolio Value = US$17.9k

SRS Ultra Long-Term Portfolio

Portfolio Value = S$163k

Thanks for reading.

With love and peace, 

Qiongster

Applied for Singapore Savings Bonds (SBMAY24 GX24050X)

   

The May 2024 tranche of Singapore Savings Bonds (SSB) has an average yield of 3.06% over 10 years.

The first 6 years yield a flat 2.99% per annum; 7th year yields 3.03% p.a, 8th year yields 3.2% p.a. and 9th, 10th years yield 3.27% p.a.

Although such yield is lower than other lower risk alternatives such as T Bills and money market funds which easily yield more than 3% currently, it is higher than CPF OA rate of 2.5% p.a. and some bank fixed deposits which yield less than 3%.

If we also consider the great flexibility, liquidity of SSB for redemption and long-term lock down at above 3% p.a for the next decade, then this tranche of SSB is fairly enticing for us to park our spare cash at zero risk, capital guaranteed for the mid to long-term. 

We could redeem SSB anytime, earning interest at 2.99% in the short-term while getting back our capital for deployment to other investments or large item purchases unlike T Bills and bank fixed deposits which would incur losses or forfeit of interest with premature withdrawals. Do note that the redemption process of SSB can be up to 1 month of lead time.

I decided to apply for $10k of this May 2024 tranche using my remaining funds in war chest.

There it goes.

S$900m is up for grabs.

The first payment will be on 1 Nov 2024 and this bond will mature on 1 May 2034.

I will still be happy to inject more cash into SSB in the next few months if the yields stay above 3%. My ultimate aim is to max out the personal limit of S$200k soon.

If you are interested in this tranche of SSB, do note that the application dateline is today, 25 Mar 2024, 9pm for online applications.

Thank you for reading.

With love & peace,

Qiongster

Added Frasers Centrepoint Trust

I deployed my war chest into Frasers Centrepoint Trust (FCT) today.

My order of 4,000 shares of FCT at $2.12 was filled this afternoon to increase my stake to 12,000 shares.

In Feb 2024, Frasers Centrepoint Trust (FCT) has issued 71.4m shares at $2.18 from private placement to raise funds of $200m to partially fund a 24.5% stake in Nex by acquiring from its sponsor, Frasers Property. 

This was a strong diversification and consolidation move to cement FCT's position as heartland mall king in Singapore. After the acquisition, FCT effectively owns 50% stake of NEX and is now the only pure local retail mall Reit in Singapore. I hope and believe that FCT will eventually acquire Nex fully to also give shareholders an opportunity to participate in equity fund raising again.

FCT has always been in my watchlist to grow my SGX income portfolio. It will be announcing its results and the remaining dividends (I am expecting 1.5 cents or more) of 1H FY24 on 25 Apr 2024. It has paid out 4.25 cents earlier due to book balancing from additional shares arising from the private placement.

My recent visits to Northpoint City and Tiong Bahru Plaza owned by FCT have been encouraged by great retail crowd, strong retail sales, high tenancy and more efficient usage of atrium spaces for sales events.

At $2.12, FCT is trading at 8% below its net asset value of $2.32 and yielding more than 5.5%. This is a price which is lower than what institutional investors paid for during private placement hence I am comfortable with the margin of safety.

I believe it is a no brainer to add FCT for long-term investment albeit the short-term volatility due to immense fears and noises over recession and high interest rates.

Thanks for reading.

Related posts:

Applied for FCT Preferential Offer Shares

Nibbled FCT

With love & peace,

Qiongster

Added Frasers Logistics & Commercial Trust

  

545 Blackburn Road, a freehold 5-storey A-grade suburban office building owned by FLCT in Victoria, Australia

The share price of Frasers Logistics & Commercial Trust (FLCT) (SGX:BUOU) took a beating today after news of an imminent war between Israel and Iran.

For the past months, FCLT share price has remained sluggish amidst softening of Australian Dollar which is the primary currency of its property income in Australia, impact from sustained high interest rate environment, economic recession fears, looming war news and so on.

Today, my order of FLCT is filled and my investment FLCT takes a notch further. 

I will now own 30,000 shares of FLCT at average net cost of $0.80

At $1.01, FLCT is trading 14% below its net asset value of $1.17 and yielding around 6.5%. The next expected dividend announcement of around 3 cents is just a month away in May 2023.

I started investing in FLCT since its IPO in 2016 when I was allocated 1,000 shares at $0.89. Since then, I slowly accumulated FLCT through dollar-cost averaging at $0.94, $0.97, $1.19, $0.97 until my last purchase in Oct 2022 at $1.13. 

The investment journey of FLCT has been rewarding and fulfilling but full of volatility. I believe the impact of high interest rates and weak AUD to erode the distribution per unit of FLCT have already been priced in. As around 25% of its debts are maturing in FY24, FLCT will have to renew their loans at the prevailing higher interest rates. Although occupancy is high with positive rental reversions for the logistics properties, the commercial properties have seen declining occupancy particularly in 357 Collins Street in Melbourne, Australia and Fanborough Business Park in UK to 80% and 75% respectively.

It is possible that the share price of FLCT may remain sluggish and even test lower lows in the coming weeks but I still believe FLCT is a no brainer long-term investment to own freehold logistics and commercial properties in Australia for passive income. 

I am optimistic that FLCT will enjoy a broad-based recovery in tandem with other Reits with signs of interest rate cuts and stabilisation of the AUD in time to come. Looking forward to the next dividend in May 2024 soon.

Thanks for reading.

With love & peace,

Qiongster

Added DBS

   

I FOMOed at the last chance to buy DBS (SGX:D05) to qualify for 1-10 bonus share which will XB on 22 Apr 2024.

Hence I decided to add some more shares as its share price corrected today.

There it goes. My order is filled at $35.61.

My last nibble was in Feb 2024 at $32.38

My initial purchase was in June 2023 at $30.80.

This addition will bring my holdings to 910 shares, positioning for 91 free shares and 1,001 shares in total after ex-bonus.

Technically I am averaging up because I added shares at a much higher price compared to previous purchases.

Considering the 1-10 bonus share offering, the effective cost per share is only $32.37. This is because, remember that on the ex-bonus (XB day), DBS share price will likely fall by around 10% to reflect the issuance in bonus shares amidst no change in its market capitalisation. 

Theroretically, there is no big difference if we buy DBS shares now or after XD day. Of course, if we buy before 22 Apr, we will be entitled to "free" bonus shares which are actually "losses" incurred from the fall in DBS share price on or after XD day.

DBS is the world's best bank and currently yields more than 6.5% despite at more than 50% above book value of $23.

Ideally I would like to get DBS at below $30 per share closer to its book value. However my fingers are itchy and getting impatient, coupled with the difficulty in timing the market, and the strong temptation in qualifying for "free" bonus shares spurred me to pull the trigger.

In addition, assuming DBS is able to maintain at least $2.16 annual dividend for the infinite future, it will take less than 18 years to recover back the invested capital and break even.

I believe DBS is the most enticing candidate to compete with all the top quality Reits in SGX and will be a great addition to our income portfolios for the long-term by providing consistent and stable passive income.

DBS has a great track record of rewarding shareholders consistently and steadily with growing dividends and capital gains over the past decades. It shall continue to thrive regardless of different financial environments clouded by noises and uncertainties. Even if interest rates fall, DBS will be boosted by higher volume of cheap monies lending by institutions and retail customers.

Should the share price of DBS plummet below $31 in the future, I shall add more shares to increase investment in this world's best bank.

Thank you all for reading. Stay focused and remain steadfast as always!

With love and peace, 

Qiongster

Net Worth Apr 2024 | Hitting S$1.6m

     

My net worth rises 2.3% to S$1.625m after collection of bonuses, salary and the recovery of some Reits in my investment portfolio.

My CPF surpasses $600k milestone and constitutes the bulk 37% of my net worth. Full retirement sum (FRS) is achieved in 2022.

Cash and war chest form 17% of my wealth. My cash is locked up in bank fixed deposits yielding more than 3% p.a., and stashed away in Fullerton cash funds under custody of Moomoo and Tiger Broker yielding more than 3.5% p.a. with interest paid daily.

My bonds consist of Singapore Savings Bonds ($140k) and Astrea 7A PE bond ($9k) which are low-risk bonds contributing to 9% of my wealth. I plan to subscribe the May 24 tranche of SSB with average yield of 3.06% using war chest funds.

CPF, cash and war chest, and bonds amount to 63% of my net worth as relatively safe assets. 

SRS account accounts for just 8% of my wealth. I have already completed the $15.3k contribution limit for 2024. 

Currently, 23% of my net worth is in stocks and Reits. This, combined with the local holdings in SRS, brings my exposure to riskier assets up to 31%.

Tracking net worth is not about the numbers. It is about seeing where our past financial decisions lead us to. This update is a reminder that progress on this financial journey, however big or small, is worth celebrating. It fuels the fire and motivation to keep grinding towards the financial freedom goal. The journey continues and I am excited to see what the future holds. Stay tuned!

Thank you for reading.

With love & peace,

Qiongster

My CPF Milestone: Surpassing $600k!

 

I am glad to share a financial achievement - my CPF savings recently surpassed the $600,000 mark! This is a significant milestone as it highlights years of grinding, toil and saving, leveraging the CPF system and prioritising retirement planning.

Today, I want to share my personal journey to this milestone, offering insights and tips that might help you on your own path to CPF success.

Planting the Seeds of Saving Early

Financial literacy was not a prominent theme in my childhood. However, my parents instilled in me the value of hard work and responsible spending. This naturally translated into a cautious approach towards money when I started working odd jobs in my teenage years and earned CPF contributions. While my peers might have prioritized the latest gadgets or trendy clothes, I opted to channel a significant portion of my salary into my CPF account. Looking back, this initial focus on saving was the foundation upon which my CPF balance grew.

Understanding the Power of CPF:

Singapore's Central Provident Fund (CPF) system is often misunderstood. It is not just a mandatory deduction from your salary; it is a powerful tool designed to secure your financial well-being in retirement. Early on, I familiarised myself with the different CPF accounts (Ordinary Account, Special Account, MediSave Account) and how they functioned. This knowledge empowered me to make informed decisions about my contributions and withdrawals.

Optimizing Contributions:

Beyond the mandatory contributions, I explored ways to maximize my CPF savings. Here are some strategies that proved beneficial:

• OA to SA Transfer: I emptied all my OA funds into my SA account for at least the first few years I started working. This is to reap the additional 1.5% interest from SA.
• Voluntary contributions: Once my basic expenses were covered, I started making voluntary contributions to my SA under Retirement Sum Top-Up scheme for tax reliefs.
• Voluntary Housing Refund: Even after using the OA funds to make a $20k downpayment for a HDB BTO flat in 2021, I voluntarily refunded the amount back to my OA.
• Grind, slave and work: Having no entrepreneurial spirit, I am fortunate to be able to grind, slave and work in an IT job which allows me to hit $6k monthly salary within 6 years of working, to max out both employer and employee contributions.

Living Within Your Means:

Building a substantial CPF balance isn't just about maximizing contributions; it's also about living within your means. I tracked my expenses diligently, creating a budget that allowed me to save comfortably while still enjoying life's experiences. Avoiding unnecessary debt and impulse purchases played a crucial role in freeing up funds for CPF contributions.

The Role of Time and Compounding:

Remember, the magic of CPF lies in the power of compounding interest. Starting early and making consistent contributions allows your savings to grow exponentially over time. Even small contributions made regularly can accumulate into a significant sum over decades.

Beyond the Numbers: A Balanced Approach

While reaching a $600,000 CPF balance is a source of pride, it's important to remember that retirement planning goes beyond just numbers. Here are some additional factors to consider:

• Healthcare planning: Healthcare costs can be a significant expense in retirement. Having a supplementary MediSave account balance or a separate healthcare plan is crucial.
• Inflation: Inflation erodes the purchasing power of your savings over time. Consider ways to hedge against inflation, like investing in instruments that offer inflation-adjusted returns.
• Lifestyle goals: Define your desired retirement lifestyle. Do you plan to travel extensively? Downsize your living arrangements? Having a clear vision will help you determine how much you need to save.

Sharing the Knowledge:

Reaching a $600,000 CPF balance isn't a solo achievement. I've benefited from guidance from financial advisors, online resources from the CPF Board, and conversations with friends and family. If you're looking to embark on your own CPF saving journey, here are some resources to get you started:

• CPF Board website: The CPF Board website offers a wealth of information on CPF schemes, contribution guidelines, and retirement planning tools. 
• Financial institutions: Many banks and financial institutions offer personalized retirement planning advice. Consider consulting a professional for tailored guidance.
• Online resources: Numerous informative websites and blogs discuss CPF saving strategies and retirement planning tips.

The Journey Continues

Reaching $600,000 is a significant milestone, but it is not the finish line. I plan to continue contributing to my CPF account and explore further ways to optimize my retirement savings. Remember, CPF planning is a lifelong process. By constantly reviewing your goals, adapting your strategies, and leveraging the available resources, you too can secure a comfortable and financially secure retirement.

Let us not forget, the road to CPF success is paved with individual circumstances and priorities.

Thank you for reading.

With love & peace,

Qiongster