Portfolio Update Jul 2015

About time to do a portfolio update for myself on this blog. When I started this blog, the equities made up a very small portion of my total portfolio. If you refer to the slide below, equities only made up 4% of my total portfolio.

Fast forward to 31st Jul 2015, equities made up a higher portion at about 9%. My equity portfolio consists of:
Ascendas REIT
Asian Pay Television Trust
Capitaland Commercial Trust
Ezion Holdings
Hutchison Port Holdings Trust
IHH Healthcare
Keppel Corp
Keppel REIT
New Silkroutes
Otto Marine
Sembcorp Industries
Sembcorp Marine

2015-07-31 portfolio update

My portfolio has a large exposure to the offshore marine and the REIT counters, which are two of the sectors which are currently on the down cycle (oil and real estate). As a result, my equity portfolio is facing a paper loss. However, I am positive on the long-term prospects of these two sectors.

Strategy moving forward
Currently, the market is quite volatile right now but I will be conservative in my approach to acquire counters bit-by-bit. I will look out for sectors which are on the down-cycle and sectors which will ride on the world’s mega trends.

The sectors are on the down-cycle are oil and gas and real estate sectors. For oil and gas, I believe the world’s demand for energy will continue. Oil majors like Royal Dutch Shell and Exxon Mobil are on my radar.  For the real estate sector,  I will acquire a bit more REIT and property developers like like Capitaland and Ho Bee Land are interesting.

Sectors which will ride on the world’s mega trends are the worlds demand for healthcare and healthcare services and growing middle class. Big pharma companies such as Pfizer and Novartis are interesting. However, the strengthening of the Swiss Franc made it less attractive. For the growing middle class, I am not looking luxury goods which are discretionary. Sporting goods (UnderArmor) and supermarket chains (Dairy Farm) are the sectors which I think will benefit from the growing middle class.

Disclaimer: I am not an equity analyst and the counters mentioned are not meant to be recommendations. Please do your own due diligence.


First post for 2015

Hi all,

Its more than three-and-a-half months since my last posts. How time flies!!! It has been a very brisk 2015 and time passed by so fast.

Anyway, back to the main topic and time to review the plans I had in mind for 2015, which I think is too ambitious!

1. Refinance housing mortgage
I have signed the contract to refinance my existing mortgage with another bank and the new loan will start from Aug 2015 onward. The new installment amount will be higher than my current loan because the loan duration is shortened after the new guidelines. My current loan is a 30-year loan while the new loan is a 25-year loan.

There were some hiccups because I was misinformed by my existing financier on the dates which I can redeem my current loan because I was given legal subsidy.  Its a long story, but in the end, I was able to justify that I was misinformed with email evidence.

There are a few learning points that I learnt from this episode. First of all, be very clear on all the dates which you can transfer or redeem your housing loan and how the interest rate of your housing loan is pegged (eg 3-mth SIBOR, 6-mth SIBOR, etc). The redemption date of your existing loan is pretty dependent on this as this when they set the interest rate when the lock-in period ends for fixed-rate loans. Secondly, it seems weird to me that the lawyers, existing financier and new financier cannot talk to each other. In the end, I have to act as a messenger to all of them. However, this may be the price to pay for lower interest rates and savings. Ultimately, I am happy that my interest payments is lowered!

2. Equity investment analysis framework
This was a bit too ambitious and I have read a few investment books since the beginning of the year. They are ” Common Stocks and Uncommon Profits and Other Writings” by Philip A. Fisher and “The Little Book of Big Dividends” by Charles B. Carlson. I am currently midway through “The Five Rules for Successful Stock Investing” by Pat Dorsey.

I personally feel that “The Five Rules for Successful Stock Investing” by Pat Dorsey is one of the best books I have read so far because its very practical in terms of how you can apply the techniques and action upon.
3. Deciding on how to best allocate fund for child/children’s savings
4. Personal financial planning guide
I am going to postpone these two action items beyond this year and focus on number action item 2!

Above is a quick update on my plans thus far. I hope my next update won’t be another 3.5 months time. Topics I have in mind for my next post could be US stock markets or about Supplementary Retirement Scheme (SRS).


2014 Year In Review


The year 2014 is about to end and it is about time I did a review of the year and also what I plan to do for the year 2015.

2014 Year In Review
This was the year which I first started to take a more active approach for my investment and decided to start this blog to write about it.

One of the most significant investment I made this year was to read. I have read only three investment related books: “The Intelligent Investor”, “Rich dad, poor dad” and ” The Little Book of Big Dividends”. These three books gave me a lot to think about for my own personal investment approach and how I intend to set up my investment analysis of stocks.

In terms of real actions, I have increased the equities holding but it is still a small percentage of my overall financial portfolio. This year, I also helped my wife to invest her HKD savings in a couple of counters on the HKSE.

Overall, 2014 was a year which I took a small step into the equities investment and hopefully it will be the one important step.

2015 action plan
I plan to accomplish a few investment related tasks in 2015. The following are some of the things I hope to accomplish:

1. Refinance housing mortgage
When my wife and I purchased our current resale HDB flat, we took at 30-year loan with a fixed interest rate of 1.35% with a lock-in period of 3 years. The lock-in period will be ending in the second half of 2015 and I will be looking to secure the refinance by the second quarter of 2015. This should be met quite easily because the refinancing has already been sourced and some sort of secured and the remaining action required is the paper work.

2. Equity investment analysis framework
This is the tough one because I have been reading and looking for my own style of equity investment analysis framework. Something which I am comfortable with and able to reproduce after I have done a stock screening. I think this would be my toughest task and I hope to derive  at least the first draft framework by the end of the first quarter 2015 and refine it along the way.

3. Deciding on how to best allocate fund for child/children’s savings
I have a son who’s 1+ years old now and he actually has quite some savings from the ang pow’s that he has collected. They are currently left inside his savings account earning a puny 0.05% bank interest. I have been pondering very hard over this and what is the best way that I can help to allocate this money. The course of action definitely has to be discussed with my wife and hence this will be tough to take action upon and will most likely be done in the second quarter of 2015.

4. Personal financial planning guide
This is a personal passion of mine, a guide for a person not just on investment, but also about insurance, tax, retirement and estate planning. This will be hopefully be guide with actionable. Moneysense is a government financial literacy website, but I feel that it only gives guidance and not actions. How should one person take action after reading the guide is what comes to my mind. Hence, I hope to come out with an “actionable guide”. I do not want to put a timeline for this, but most likely, it will be in the second half of 2015.

The four items pretty much sums up some of the things I have in mind for 2015. This will hopefully be my “workplan” for this blog other than my official work. I will add in more or share more interesting investment or personal finance matters in this blog if it is interesting. Also, please feel free to contact me via e-mail if you would like to connect or share interesting concepts or articles.

This will be my last post for the year 2014 and I would like to wish everyone a Happy New Year!!


Which platform for Regular Index Fund Investing?

In one of my earlier post (here), I was writing about how to start investing using the dollar-cost averaging method for blue chip stocks and ETFs. I also mentioned about my preference to purchase Nikko AM STI ETF manually using SCB’s online equities trading platform.  In this post, actually slides, I will be presenting on the fees and the average unit cost price if one has been diligently investing monthly (ETF purchased at the end of each month) since Jan 2010 to Oct 2014 with various monthly budgets and various platforms. In addition, I also present to you a slide on the returns based of the total investment. (Source data from Yahoo Finance: here)

For my analysis, there are two regular savings plan (RSP), OCBC BCIP and POSB Invest Saver, which purchase shares and the third one is a manual investment  via SCB online equities trading platform which purchases shares in lots.

finance4uandme -Regular Index Fund Investing

finance4uandme -Regular Index Fund Investing - 2

My conclusion (edited on 11th Nov)

POSB Invest Saver (Regular Saving Plan) – Most expensive in terms of fees
OCBC BCIP (Regular Saving Plan) – In between
SCB equity online trading (manual) – Lowest fees.

While SCB equity online trading offers the lowest fees, RSP helps to take one’s emotion out of the equation which I feel is very important.

Please feel free to comment and also share other methods of index fund investing.


Strategy and capabilities

It has been a long time since my last post. I had been quite busy the last month due to work. For this post, I shall talk about strategy and capabilities as it is what I do for a living.  I have not explained about my work before but it largely involves business strategy.  The work is multi-faceted and it could involve how to build differentiating competencies, leveraging financial markets, identify strategy partners and strike win-win partnerships, just to name a few.

However, one of the key elements which all strategies depends on is capabilities. In particular, the capabilities of the people of the organisation.   In order to acquire the required capabilities, you can “build, borrow or buy”. You can read more about it at this INSEAD URL.

Build – train the current staff
Borrow – strike partnership and borrow other people’s capabilities
Buy – poach people with the required capabilities from competitor or related industry

How does this link to investment and stock analysis? Other than quantitative ratios of companies, the qualitative analysis portion of the intangibles of a company are mainly the management and intellectual property. I shall not mention about intellectual property as it’s difficult to analysis unless you are an industry expert and I have no knowledge of intellectual property.

Analysis of the management is all about this intangible asset which, as retail investors, we do not have the ability to put a finger to because we are not analyst who can request for a meeting with the C-suite executives of the companies. How can we then make this assessment?

For me, I will look at the history of the two or three key management personnel, the CEO, CFO and the COO.  CEO’s CV and his history will help to tell me how well he or she sets the direction for the company and then manage and find the right people for the right job.  CFO is very important because he or she manages the finance and think of ways to unlock, seek or grow capital required for business growth. COO is also important especially for company has a lot of operations in industries such as manufacturing, utilities and telcos. COO is important because he or she will be the person that ensures existing operations are running silky smooth and maintains or reduces the cost of operations.

Feel free to comment on my mode of management analysis and feel free to share some of the methods you use to analyse the qualitative part of the company, be it management or intellectual property!


Starting my foray into Hong Kong Stock Exchange






As the post title suggests, I will be starting my foray into the Hong Kong Stock Exchange.

My wife has a lump sum of Hong Kong dollars during her two-year work stint in Hong Kong. I realized that there is 0% interest for Hong Kong Dollar deposits or any financial instruments. The money has been lying there for a couple of years! And she agreed for me to help her manage it.

Investment objective
My wife mentioned that the investment objective is capital preservation. She had already lost quite a lot due to forex rate and inflation. She was earning Hong Kong dollar when it was HKD5+ to SGD1 and now its HKD6+ to SGD1!

Investment approach
In terms of tools, I am going to use my SCB online equity trading account to invest in the Hong Kong Stock Exchange. The reason why I choose this is because I already have an SCB online equity trading account and the commission rate is one of the lowest around. I’ve read a little about Interactive Brokers which also have competitive rates, but it will be too much of a hassle to open a new account on a different platform.

Since my wife wanted to preserve capital, I think the HK REITs will be a good starting point. From my research, Hong Kong does not have capital gains tax and there is no withholding tax for dividends repatriated to Singapore.

There are currently 11 HK REITS
Champion Real Estate Investment Trust 2778:HKG
Fortune Real Estate Investment Trust 778:HKG (In case you’re wondering, its the same Fortune REIT on SGX as its dual-listed on HKSE & SGX)
Hui Xian Real Estate Investment Trust 87001:HKG
Link Real Estate Investment Trust 823:HKG
New Century Real Estate Investment Trust 1275:HKG
Prosperity Real Estate Investment Trust 808:HKG
Regal Real Estate Investment Trust 1881:HKG
Rreef China Commercial Trust 625:HKG
Spring Real Estate Investment Trust 1426:HKG
Sunlight Real Estate Investment Trust 435:HKG
Yuexiu Real Estate Investment Trust 405:HKG

I have done a brief scan of the property portfolio of the 11 HK REITs and two REITs stood out for me:

Champion Real Estate Investment Trust (2778:HKG)
Amongst the various types of REIT, I particular like Grade A office REITs and industry space REITs. Champion REIT has a portfolio of 2.85 million square feet of prime office and retail floor area by way of two properties in Hong Kong, Citibank Plaza and Langham Place, one on each side of the Victoria Harbour.  I quite like these two properties.  Quantitative wise, Champion REIT has a Price/Book value of 0.45 and dividend yield (ttm) of  5.83%, which is pretty decent.  Sounds like a “champion” to me! (pun intended!!)

Link Real Estate Investment Trust 823:HKG
Link REIT’s portfolio consists of properties with an internal floor area of approximately 11 million square feet of retail space and approximately 80,000 car park spaces. Other than the huge GFA, why LINK REIT stood out is because I’ve not really seen ‘car park spaces’ specifically mentioned inside the portfolio of a REIT.  From what I was told car park lots in Hong Kong is expensive. Link REIT has a Price/Book value of 1.03 and dividend yield (ttm) of 3.85%. From the first look, it may seem its fairly priced right now. But it will be interesting to research further into the REIT’s operations.

That’s all for now. I will be focusing some time on Hong Kong stocks. I will greatly appreciate any pointers that any experts in the comments below!


Review of one of my Investment Linked Policy (ILP)

Based on many investment books, forums, blogs, websites that I had come across, Investment Linked Policy (ILP) seems to be a ‘taboo’ and a big ‘no-no’ to all the investors out there.

I happen to have three ILPs, which were purchased well before I started to be more interested and taking an active role in managing my personal finances, around early 2014. One of the ILP is a single premium ILP and the other two are regular savings plan ILPs.

So, lets look at the the single premium ILP which was bought back in March 2004 and invested in the Global Technology Fund. (See fund details in Annex)

Fund and Portfolio Performance

finance4uandme -ilp1

Personal comment & conclusion

i. Decent capital appreciation
The ILP has offered an IRR of 2.88%, which I think is pretty decent given that it is after total fees deduction of S$600. If I was given S$10,000 10 years ago, I doubt I will be able to perform much better and the money would have been earning miserly bank interest.

ii. sub-par performance as term insurance
I think that the $12,500 death and TPD coverage, offered by the $50 annual fee I paid over each of the last 10 years, is very low.  If I prorate one of my current term insurance, which covers me till 75 years of age, $50 annual premium would offer me a death and TPD coverage of $20,000.

My personal conclusion is that before one to purchase an ILP, check out what are the unit trust and term insurance plans available first. There may be a combination of unit trust and term insurance which may be able to offer better value than a single ILP for the same amount of money.

Action plan for this ILP on mine – SELL
I am quite happy with the 34% increase in value and I think its time to cash in. I’ve already missed an opportune time in Feb 2014, hopefully I can catch the next upswing soon.

Annex: Global Technology Fund details
finance4uandme -ilp2