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"E-book" by AK

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AVIVA paid me $10,529.

Thursday, December 5, 2013

On 28 October, I wrote a piece on single premium endowment policies and I revealed that I had one such policy with AVIVA maturing in November. 

I wondered how much would I be receiving when the time comes.

I received this advice last night:

Over 8 years, a $10,000.00 premium apparently made $2,175.00. I had previously thought the returns in the first 6 years were $800.00 or less. I was mistaken. My memory is unreliable.

So, the policy made $2,175.00 over 8 years. This means 21.75% spread over 8 years or 2.72% per year. 

Quite miserable even by endowment policies' standards. 

Still, it is better than what the SRS account would have given me in interest payments. Everything is relative, of course.

All said, this is a forced savings plan and, at one time, I thought it would be a good idea to force myself to save. 

This was money in my SRS account anyway and I wasn't doing anything with it.

On hindsight, I should have kept the money in my SRS account untouched and I would have had more ammunition to buy cheap stocks during the GFC.

I now have quite a bit of money idling in my SRS account which I consider as one of my 4 war chests. Not doing anything here is doing something too.

Related post:
How much more will Aviva be paying AK?


jason said...

Today HPH getting battered - yields are now approaching past 8%, price is about 30% discount to NTA, worth your while?

AK71 said...

Hi Jason,

With risk of a slowdown in China, higher operating costs, shortening land lease and a likelihood of an even weaker US$ next year, I will need at least a 10% distribution yield to be interested in HPH Trust. :)

jason said...

there is the S$ version.

AK71 said...

Hi Jason,

Yes, I saw. However, I was wondering about income to be distributed too which is converted from HK$ which is pegged to the US$. This is a concern.

Anonymous said...

I think there are more things to worry about then currency impact. With tapering, US long term outlook is to strengthen...

I think capex and operating numbers are more of a concern.

Labor costs is small, so no concern.

If throughput reduce further, things will get real angry, if throughput is at existing level, current project payout of 40HKD cents is unstainable.

Buy only with a eye on recovery of trade. IMO, there are 3 developments that give me hope.
1) trade recovery with us economy
2) pending 2nd free trade zone at Guangzhou area
3) trend of P3 and G6 alliance of mega ships calling at fewer deep water ports, and increasing transshipment load.

My fat hope analysis.

ryan said...

Hi AK,

What do you think of LippoMalls? It was battered badly today.

AK71 said...

Hi Mike,

Very concise analysis. Thanks. :)

I don't feel comfortable about HPH Trust. To compensate for the perceived higher risk, I will need at least a 10% distribution yield. Even then, it might be a smallish position.

AK71 said...

Hi ryan,

I think its recent share placement did this to its unit price. The managers will have to show that they are able to put the money to good use and raise DPU. Otherwise, it would just mean that all of our earnings just got diluted.

So, I will wait and see how things go from here. I need greater clarity.

Anonymous said...

Hi AK,

Many are now asking you whether to buy when price get battered, instead of panicking about sell.

I think this is good news... =)

AK71 said...

Hutchison Port Holdings Trust dipped as much as 4.5% to its lowest in nearly two years as a strong technical level was broken, leading losses on the Singapore benchmark index.

HPH Trust fell to as low as US$0.64 ($0.80), a level unseen since January 2012, after breaking below US$0.675 in the previous session, which had been a key technical support since mid-November.


Anonymous said...

On a sidenote, your threshold of 10% dividend, does it apply to all reits and trusts?

APTT is trading at 10.7% yield.

I am trying to write an article on that... But APTT is one complicated animal, I wrote halfway and end up reading up more than continue writing ...

But so far, so good... Many concerns shared by online bloggers and forumers are actually manageable, but the more I read, the more I think I have to research further, the small position I initiated made me more hardworking, as usual...

You did any study on APTT?

AK71 said...

Hi Mike,

Perhaps so. :)

The new CEO seems to have done a better job so far. I was not impressed with the old one. -.-

However, the recent placement was a bit perplexing. Will wait for more news.

Anyway, my long position in LMIR is still pretty substantial. So, I am in no hurry to add, just like I am in no hurry to add to any of my other long positions in S-REITs.

Anonymous said...

The placement of shares is for TONG JINQUAN of Shanghai Summit Pte Ltd.

The same person that bought 200M of Viva Industrial Trust.

I will be more angry if the placement is for the founder...

Anyway, we need the Q4 numbers to tell if operating numbers are battered purely due to currency weakness, or if the filling up of malls and rental revision is weak.

Prior quarters results are contaminated by new acquisitions, Q4, will see more info, if they continue to give earnings numbers in rupiah like they did in Q3

AK71 said...

Hi Mike,

I have a legacy position in APTT from MIIF. I am not comfortable with the high level of intangibles nor its debt which seems rather costly to me.

Having said this, all investments are good at some price and this might sound arbitrary but if its unit price goes nearer to 70c, I might just buy some. :)

When your article on APTT is done, please shout and I will visit your blog. Thanks. ;)

AK71 said...

Hi Mike,

I generally do not like placements but accept that they are a necessary evil.

If the funds from placements will lead to a higher DPU, of course, it will still benefit all unit holders. Whether that will happen or not needs to be seen.

I still believe that LMIR has potential to do better. I will wait and see if they will acquire malls at bargain prices and do more AEIs to add value.

The Rupiah's continuing weakness means the currency hedge will have to continue even though it is costly. It is another necessary evil, I suppose.

I would like to limit my exposure to LMIR to no more than 5% of my entire portfolio, pending greater clarity.

WK said...

what about sabana reit? its whacked down as well.

worth the risk and buy them during this period? most likely the dividend yield will be more than 9%now.

AK71 said...

Hi WK,

My estimates are somewhat more conservative. You might be interested in this:

Sabana REIT: Results and outlook.

I recently partially divested my investment in Sabana REIT and blogged about it:

Sabana REIT: Partially divested.

You decide. :)

WK said...

I guess it is a no no for u ha.... But it does look tempting.

AK71 said...

Hi WK,

Haha... You are right. Not to me. :)

If you have analysed this thoroughly and understand the risks involved, then, you are going in with your eyes open.

If you are comfortable with the proposition, then, you know what to do. Right? ;)

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