Friday, 1 February 2019

My Investment Portfolio (End Jan 2019)

Life is unpredictable. Just when I was expecting STI to go further south or at least stay below 3,000, it went north instead and went all the way above 3,100.  This is why I never trust myself and never try to time the market (i.e. buy at the bottom and sell at the top). Suddenly, the sea of red become a mixture of green and red.

I did not make any transactions this month as my GTD orders were all at a way lower price compared to the prices now. Hence, I decided to put my money in the 1 Feb 2019 Singapore Savings Bonds (SSB) on the last day of the application period since the interest rate is 1.98%. After all, if I need the money for investment or other purposes, I can redeem it easily. You can read more about SSB here.          
Among the financial results that were released this month, there is only 1 stock that impressed me. It is Mapletree Commercial Trust (MCT). The manager and property manager of MCT is so amazingly good at their job. Personally, I think that they are the best manager for any trust or reit. Look at the Mapletree family that is listed in SGX, their share prices always go north. MCT’s is currently trading above its NAV of $1.48.

The dividends amount keep increasing with their frequent asset asset enhancement initiative (“AEI”) and active tenant remixing exercise. Also, they managed to get a bonus GFA of 24,000 sq ft of retail space at Basement 1 in Vivo City by converting some of the space at level 3 into a National Library.
From: Mapletree Commercial Trust's financial result powerpoint slides 
It is important to note that MCT has other properties too. But Vivo City provides the most revenue and Net Property Income. Also, Kyith from Investment Moats has shared a good point, PSA may move out of MCT’s PSA building in two years’ time when its own building is completed. Should that happen, their shipping partners located in the same building may also eventually move out.

Dividends received* in Jan 2019: $576.88 (CapitaLand Commercial Trust, Suntec Real Estate Investment Trust, Mapletree Commercial Trust, Keppel DC REIT)

Total dividends received in 2019: $576.88

Average dividends per month: $48.07

Total Portfolio Market Value: 163,857.77

Dividends are recognised after ex-dividend (xd) date.
Average dividends per month is calculated by dividing the dividends received by 12 months regardless of the month.
Portfolio excludes Singapore Savings Bonds.

Monday, 21 January 2019

OCBC 360 Account Review 2019

I have been using OCBC 360 account since 2015 as its interest mechanism and returns work best for me, in a fuss free manner too. Based on my needs and financial situation, I have always treated the money in OCBC 360 account as my emergency fund (i.e. not investment fund). After many years of working and saving, my balance exceeded $70,000. From then on, I allotted the excess money into CIMB FastSaver account to earn 1.0% return in a fuss free manner (the 1% is capped at $50,000).

Every year, OCBC reviews and revises the interest mechanism and although the returns decrease each time, it is still the best option for me. In Nov 2018, OCBC the interest mechanism was revised yet again. This time, for once, the returns seem to be more flavourable for me. Basically, if you have more money in your 360 account, it will be more flavourable for you. This is because the interest rate is higher for accounts with balances of $35,001 to $70,000.

There is a new bonus interest component called “Step-up” when you increase your account balance by S$500 compared to the previous month. Also, you will earn a Boost bonus interest on the increase in your account balance compared to the previous month. You can refer to the image appended below or visit OCBC’s website for more details.
From: OCBC website

With this change, I reviewed (i) whether and (ii) how I should shift my money from CIMB FastSaver to OCBC 360. I know for sure that the Step-up and Boost bonuses are going to make a different.

I did a simulation to transfer an amount of money, which has to be more than $500 from CIMB FastSaver to OCBC 360. For calculation purposes, the amount of money transferred is $600 per month. I also assumed the following:
  • Had balance of $70,000 in OCBC 360 at the first month; 
  • Had balance of $25,000 in CIMB FastSaver at the first month; 
  • Met the requirements in OCBC 360 to qualify for the Salary, Spent, Step-up and Boost bonuses; 
  • Calculation for Salary bonus was based on the non-promotional rate (promotion rate is up to 2.0% per year, till 31 Mar 19); and 
  • Interest was calculated on per month (31 days) basis.

Based on the simulation, it makes sense to transfer an amount larger than $500 from CIMB FastSaver to OCBC 360 on a monthly basis. You can get $1,842.57 of interest in a year by doing so! You will also notice that the average return based on the calculation is 1.54%. If you have $50,000 in your CIMB Fastsaver, your interest and average return can be as high as $2,097.37 and 1.75% respectively.

If you decide not to transfer any money from CIMB FastSaver to OCBC 360, you will not enjoy the Step-up and Boost bonuses. You will only get $1,574.63 of interest

In such a case, I would just set up a monthly recurring transfer from CIMB to OCBC 360 and sit back and enjoy.

Note: I did not show calculations of other banks' saving accounts as either they did not meet my need or I am unable to meet their savings requirements to get the maximum benefit. This is not a sponsored post by OCBC or CIMB. Please do your own due diligence.

Tuesday, 8 January 2019

Three things to note for Feb 2019 Singapore Savings Bond

I seldom write about the Singapore Saving Bond (SSB). But I am surprise by the yield of the February 2019 tranche of SSB. Hence, this post.

Depending on your time horizon, you should watch out for the following:
  1. The first year yield is 1.98%. This is still relatively attractive as it is better than putting your money in a 1 year fixed deposit or even parking your money in the bank.
  2. The first three years’ yield are the same at 1.98%. I had to triple check as this is the first time there is no increase in yield on a year to year basis. Typically, the feature of SSB rewards Singaporeans who hold on to the SSB for a longer period of time by stepping up the interest rate each year.
  3. The 10 years average yield of 2.20% is the lowest since April 2018. March 2018 tranche’s 10 years average yield was 2.11%.
What caught me by surprise was points 2 and 3 in the para above. 

You would also notice that the gap between the first year yield and 10 years yield is smaller. This is something to take note if you intend to put your money in SSB for a long period of time.

If your time horizon is short (e.g. 1 year), the first year yield is still attractive. Moreover, SSB allows early redemption with a small application fee of $2 and accrued interest will be paid!

As stated in my previous post, I will continue to put in a small portion of my emergency funds into SSB for a year period since it beats putting them into a saving account and SSB is more fluid than fixed deposit.