Largest investments updated (mid 2024): Never run out of money in retirement.

It has been quite a while since I last blogged about my largest investments.

The last time I published such a blog was in January 2023.

So, it has been a year and a half!

Apart from being lazy, I didn't do very much to my portfolio and, hence, I did not see the need to publish any updates.

However, I think it is about time I do this even if it is just to take into account changes in market prices.

Many things have changed in the past 18 months.

Before we start, I want to share a YouTube video I produced on how not to run out of money in retirement which I feel is an important topic:

Anyway, here is the update.

$500,000 or more

1. CPF

2. OCBC

My CPF savings is a constant.

Being risk free and volatility free, it provides peace of mind.

I have not done any voluntary contributions to my CPF account in the last 18 months.

Instead, I have used that money to buy Singapore Savings Bonds and I shared the reason why here and also in my YouTube channel, of course.

I have also used money in my CPF OA to buy T-bills which grows my CPF OA savings at a faster clip.

In dollar terms, it is quite meaningful as I have quite a large amount of money in my CPF OA.

So, my CPF savings has grown in size in the last 18 months despite lacking mandatory or voluntary contributions.

Next is OCBC which is my largest investment in equities.

Since the last update on my largest investments, I added to my position in OCBC at about $12.30 a share in the middle of 2023.

The market value of my investment in OCBC has gone up significantly as its share price has also appreciated quite a bit.

This is very nice but as an investor for income, I am more interested in the passive income generation.

OCBC has become and will continue to be the most important passive income generator for me.

$350,000 to $499,999

1. AIMS APAC REIT

2. DBS

3. UOB

4. SSBs and T-bills

Unlike the top bracket, there are some changes in the second highest bracket in my portfolio.

DBS and UOB have both moved upwards to join AIMS APAC REIT in this bracket.

The spectacular increase in the share prices of DBS and UOB resulted in their promotion in my portfolio.

There is also the fact that I added to my investment in UOB in the middle of 2023 at about $27.90 per share.

I also added to my investment in DBS in November of 2023 at about $31.80 per share.

Together, OCBC, UOB and DBS account for more than 45% of my portfolio's market value.

Then, there are SSBs and T-bills.

Together, they jumped two brackets upwards from 18 months ago.

Yes, together, they were in the lowest bracket 18 months ago.

I can save money relatively quickly since my passive income exceeds my expenses rather significantly.

I have been socking away money in SSBs and T-bills in the last 18 months.

Money which would have gone into my CPF account was instead used to buy SSBs.

Excess money was used to buy 6 months T-bills, strengthening my T-bill ladder.

This provides me with more passive income without any price risk.

The money in T-bills also come back every 2 weeks which is useful if there are investment opportunities presented by Mr. Market.

$200,000 to $349,999

1. IREIT Global

For readers who have a keen eye, they would have wondered what happened to IREIT Global which was in the higher bracket 18 months ago?

The large decline in unit price since the last update means IREIT Global has fallen in its position in my portfolio.

Having declined more than 40% in the last 18 months means IREIT Global is no longer my largest investment in the REIT universe.

It briefly replaced AIMS APAC REIT as the largest REIT investment in my portfolio 18 months ago.

I made a video about IREIT Global several months ago and the decline in unit price is not unexpected.

Here is the video for anyone who might be interested:

I am still holding on to the investment and will be adding if its unit price declines further.

I find it easier to value IREIT Global because it isn't holding something amorphous.

It is deeply undervalued and more so now that Mr. Market is feeling very pessimistic about it.

In fact, I am getting a bit of that Saizen REIT vibe.

Readers who have been following my blog for many years would know what I mean.

Still, same same but different.

So, do not throw caution to the wind.

I made a video about this recently too:

$100,000 to $199,999

1. Wilmar International

2. ComfortDelgro

3. Frasers Logistics Trust

Membership in this lowest bracket of my largest investments has changed.

Wilmar dropped one rank as its share price declined significantly.

I know Mr. Kuok and Mr. George Yeo added to their investments recently.

However, I am still waiting for $3.00 per share before adding.

Wilmar is very undervalued if we look at the sum of its parts.

However, conglomerates always suffer from conglomerate discount.

So, buying with a larger margin of safety for a person of limited means like myself is not a bad idea.

Wilmar is still profitable and pays a meaningful dividend which means I am being paid while I wait.

This is true for all my investments.

ComfortDelgro and Frasers Logistics Trust are both chugging along fine.

Nothing much to say there.

Sabana REIT and CapitaLand China Trust have dropped out from this bracket.

I reduced my investment in Sabana REIT substantially not too long ago and I blogged about it too.

Don't like how the internalization process seems to be fraught with speed bumps.

Like I said in the blog, it is very different from my experience with Croesus Retail Trust.

CapitaLand China Trust has seen its unit price plunged.

Unfortunately, its fate is tied to that of the Chinese economy which is not in a good place now.

Specifically, the Chinese property sector which accounts for 30% of the economy will be a dead weight for many years to come.

So, this is the update.

Although there are a couple of investments which are underperforming, overall, the portfolio is doing well.

That is what matters to me.

Performance on a portfolio level.

Of course, all of us have different beliefs and we should all do what we feel is right for us.

If AK can talk to himself, so can you.

Related posts:
1. Sabana REIT divestment.
2. Largest investments (4Q 2022.)

Frasers Logistics Trust: Another largest investment.

This is just a quick update on my investment in Frasers Logistics Trust.

I didn't do anything to my investment in Frasers Logistics Trust since I got in at 92.5c a unit in January 2017.

At least I don't remember having done anything to it since then.

Well, I must correct myself because after so many years, I finally did something to it.

As one of my larger smaller investments for a long time, I didn't have to make a large purchase for it to join the ranks of my largest investments.

In case you don't already know, I consider any position that has a market value of $100,000 or more in my portfolio as large.

The numbers look pretty good.

(Presentation: May 2022.)

I don't usually like paying a premium to NAV when it comes to REITs.

However, when I first invested in Frasers Logistics Trust in 2017, I paid a premium of around 6% to its NAV then, if I remember correctly.

At that time, I decided that it was a price I was willing to pay for geographical diversification and also to have greater exposure to freehold assets.

So, increasing exposure last week to Frasers Logistics Trust when it was trading very close to or at its NAV was more palatable.

I will keep a lookout for a chance to add to my investment in Frasers Logistics Trust at under $1.20 a unit.

That means roughly a 10% decline in unit price from here.

Technically, it is a definite possibility as the momentum oscillators are not encouraging.

Fundamentally, if risk free rate continues to go up, we could see unit prices of REITs like Frasers Logistics Trust declining as investors might demand from them a high distribution yield.

Although buying at a discount to NAV would make me quite happy, I remind myself that NAV could decline as we could see cap rate expansion taking place if risk free rate continues to go up.

Don't throw in everything including the kitchen sink because peace of mind is priceless.

Recently published:
Capitaland China Trust.

Related post:
FLT and CRCT.

3Q 2018 passive income (S-REITs).

In 2Q 2018, there was a bit of action in the S-REITs space for me and one of the things I did was to add to my investment in Starhill Global REIT at 64c a piece.

In 3Q 2018, I was ready to add to my investment in Starhill Global REIT if Mr. Market's pessimism should worsen.

However, Mr. Market felt better about the REIT's prospects and the unit price rebounded.






To understand why I bought more of Starhill Global REIT when I did and how it became one of my larger smaller investments, go to the related post at the end of this blog.

The top 3 income contributors from my investments in S-REITs in 3Q 2018 were:

1. AIMS AMP Capital Industrial REIT

2. First REIT

3. IREIT Global

I often get asked whether we should continue investing in S-REITs since interest rates are on the rise.

I am aware that this is really another way of asking what is going to happen to the unit prices of S-REITs in future.

I don't know how the prices will move in future.

I only know that investing in bona fide income producing assets has been rewarding and it should continue to be rewarding.






If we believe that real estate has intrinsic value, then, buying at a discount to valuation, we should have some margin of safety.

Also, we have to ask whether the management is honest and capable enough to unlock value for shareholders too.

Of course, S-REITs are not perfect nor are they the only tool available to investors for income.

We also want to be careful not to be overly reliant on S-REITs as the higher yield comes at a price.

Remember, S-REITs pay out 100% of their cash flow most of the time and have no retained earnings.

So, investing in S-REITs, we have to be prepared for the possibility of rights issues.

Those who are fully invested and dependent on S-REITs for income should beware.





This is especially if the dependence on S-REITs for passive income is absolute and critical.

"Absolute" means that these investors have no other sources of passive income.

"Critical" means that any reduction in passive income from S-REITs would be a life altering event for these investors.





Remember, how we invest and what we invest in should depend on our personal circumstances and what we hope to achieve.

It is never my way or the highway.

You should have a plan, your own plan.

However, to have a plan that works for you, you must know what you want and what you are capable of and willing to do.




For example, in middle of September this year, a reader asked me about investing in Soilbuild REIT again.

blazingruby60 said...
I remembered you mentioned that all investment is good investment at the right price.

looking at soilbuild i have sold after reading this article here and wondering would you consider buying soilbuild again at 58 cents?

considering soilbuild has ventured overseas to australia to acquire some properties and all.

thanks n cheers.






AK said... 
I was thinking about it but I decided not to invest in Soilbuild REIT now because

1. I already have a pretty large exposure to industrial property S-REITs which also have exposure to the Australian economy (AIMS AMP Capital Industrial REIT and Fraser Logistics Trust).

2. I would like to have a much bigger percentage of my portfolio in non-REITs to reduce reliance on S-REITs for income.

Of course, things could change in future. :)

Investing in S-REITs for income, we have to take in a bigger picture and, to be realistic, your picture could be quite different from mine.

My total 3Q 2018 passive income from S-REITs was:

S$ 19,884.80

AA REIT 10-year Anniversary 
- Celebrating 10 years of Partnership!

On a per month basis, it works out to be about S$6,628.00 a month.

Related post:
2Q 2018 passive income from S-REITs.

2Q 2018 passive income from S-REITs.

Regular readers know that AK is usually pretty inactive as an investor, preferring to do nothing most of the time and just collect dividends.

Well, in 2Q 2018, in the S-REITs space, there was a bit of action.






There was the 1 for 10 rights issue by Frasers Logistics & Industrial Trust (FLT) in which I took up my entitlement and applied for a small number of excess rights.

To be honest, I did not think that the rights issue was very attractively priced. 

Perhaps, it was fairly priced.

We have to take note that the massive deal weakened the REIT's balance sheet significantly while delivering very little increase to DPU and NAV per unit.






I must say that I feel that the deal was better for the sponsor than it was for the REIT.

We shall see if the REIT's DPU grows in future, everything else remaining equal.

Having said this, the REIT should still be a fairly safe and stable investment for income that keeps me happy enough to stay invested.

Even after the rights issue, the REIT is still only one of my bigger smaller investments (under $100,000 in market value but more than $50,000).

Another thing I did in 2Q 2018 was to nibble at Starhill Global REIT as its unit price declined.

As its unit price declined by 5%, I pointed out to a friend that the drop in unit price did not really make the REIT absolutely more of a bargain than it was before.

Of course, I was not interested in adding to my investment then.

If you remember, I mentioned in an earlier blog that with the new tax levied by Malaysia, I estimated a 5% reduction to the REIT's DPU.

So, with a lower DPU, it is only logical that the REIT's unit price took a 5% hit as well.






However, when its unit price declined by much more than 5% later on, I decided that the selling was probably overdone.

In fact, unit price has declined by more than 10% compared to my initial entry price and I couldn't resist nibbling.

After all, there is reason to be hopeful that Starhill Global REIT could do better in future and that buying at a big discount to its NAV is a very tempting proposition and probably provides a decent margin of safety.







The REIT's portfolio of commercial buildings has intrinsic value.

As an investment for income right now, however, it is really nothing to shout about.

Although I feel that there is nothing fundamentally wrong with the REIT, it is really one for investors who are very patient and who are OK with being paid while waiting.

As I bought more in 2Q 2018, Starhill Global REIT has just crossed the line to become one of my larger smaller investments like Frasers Logistics & Industrial Trust (under $100,000 in market value but more than $50,000) but it is on the smaller side compared to FLT.









I like to think that all investments are good at the right price.

At such a big discount to NAV, it is just too hard for me to ignore but without a clearly stronger income investing angle here, I reminded myself not to take too big a bite.

I don't like choking.






Regular readers should not be surprised that the two largest contributors to my passive income from S-REITs are:

1. AA REIT
2. FIRST REIT






DBS recently did a piece on AA REIT, suggesting that it could be a target for takeover and suggested a target price of $1.55 to $1.65 per unit.

• Resilient industrial gem that offers above-average yield of 7.4%-7.6% over FY19-FY21

• Extraction of value from greenfield projects and addition of c.600,000 sqft of untapped GFA could drive revenues by c.16%

• Potential takeover target amid global hunt for quality assets







Frankly, I am not too enthusiastic about this, having lost quite a few good income generating investments in similar fashion already (with Saizen REIT and Croesus Retail Trust being the largest).

Quite honestly, unless there is another bear market, it is not easy to find robust replacements as more meaningful investments for income.





OK, enough grumbling.

Total passive income from S-REITs in 2Q 2018:

S$ 18,715.33

The next blog will be on my passive income from non-REITs and we will have the full picture for 2Q 2018 then.

Related post:
1Q 2018 passive income from S-REITs.

Frasers L&I Trust and 21 European assets.

My investment in FLT made more than a year ago has done quite well so far and I would have been quite happy to have them keep the status quo.

Of course, that is not how things work in the real world.





FLT is proposing to buy 21 properties in Europe from its sponsor, most of them German and the rest are Dutch.

Germany is Europe's strongest economy and that is one reason why I invested in IREIT Global so many years ago.

So, to me, that is a reason to like FLT's proposal to invest in German properties.

The properties are 100% occupied, are mostly freehold and mostly come with some form of built in rental escalation.

The proposed acquisitions should make FLT more resilient overall, having less concentration risk in terms of geography as well as tenants.

Of course, the most important question to be answered is how is this going to benefit us as retail investors from an income perspective?

After all, it is reasonable to assume that we are investing in FLT for income.





From FLT's presentation, the deal is likely to be yield accretive and NAV per unit is likely to creep upwards too.

So, income investors should approve.

However, it would depend on how the deal is funded and this is key.





We are not talking about buying 1 or 2 buildings here, we are talking about increasing the portfolio value by some 50%.

For a portfolio that is valued at more than a billion dollars, 50% is a big deal.

Even after taking on more debt, there is going to be a big shortfall.

So, there has to be equity fund raising which, of course, is a private placement and/or a rights issue.





Regular readers would know that I very much prefer a rights issue because it would allow retail investors like me to participate in the fund raising exercise as well.

The number of units in issue is going to increase by a third or so to help fund the deal.

There will be both a private placement and a rights issue.

Find the details in the EGM announcement on page 66: HERE.

As long as the deal allows retail investors to participate in the equity fund raising and as long as it is DPU accretive, I am happy enough for now.





See announcement: HERE.
See presentation: HERE.

Related post:
FLT and CRCT.

Frasers L&I Trust and CapitaLand Retail China Trust added in January 2017.

As REITs will always be relevant to the income investor, I have been thinking of how best to increase my investment in REITs again in an environment of increasing interest rates and I decided I should choose REITs which have a better plan or chance to improve their income.

Hedging interest rate risk is very well and good but this only kicks the can down the road because sooner or later, higher interest rates will hit home. 




So, having the ability to increase income is still key as to whether a REIT will do well with interest rates increasing over time.

Very importantly, I also decided that it is probably a good idea to diversify more geographically and to reduce my portfolio's reliance on Singapore. 

Remember I said this in a recent blog post on Sabana REIT?
However, things will get even more challenging for REITs from here on with interest rates expected to rise further. Industrial REITs here are facing an oversupply of space and a malaise in demand.  (Source: History with Sabana REIT and current thoughts.)




So, although I like AIMS AMP Capital Industrial REIT (AA REIT), for example, last month, I decided to initiate a position at 92.5c a unit in Frasers L&I Trust (FLT) which owns logistics and industrial properties in Australia.

The IPO price was 89c a unit and, to be honest, I was waiting for the price to come down from there before buying some. 

This was because although there are many things to like about FLT, the distribution yield was on the low side for an industrial REIT. 

Unfortunately, the decline I had hoped for did not happen.




So, although FLT's distribution yield of  7+% doesn't seem very attractive when compared to AA REIT's 8+%, I decided that there are enough positive factors such as relatively low gearing and a portfolio of mostly freehold properties in Australia for me to invest in the REIT.

(30 November 2016)

Of course, regular readers would know that although AA REIT has been a fantastic investment for income for me and is likely to remain decent, apart from the challenging leasing situation in Singapore, I am also unwilling to add to my already rather significant investment in the REIT.

Other than FLT, I have another new investment in my portfolio. 

Again, this has a portfolio of real estate outside of Singapore.

Some readers might remember that I have been waiting for a chance to get into CapitaMall Trust (CMT). 

I remember I spent quite a bit of time blogging about it once upon a time: here.




However, from then till now, CMT's unit price did not decline enough to be persuasive, I feel. 

Translation: AK is "giam siap" and wants to buy at a much lower price. 

What? 

You need a translation for "giam siap"? 

I blur.

After much consideration, I accepted the offer from Mr. Market to invest in Capita Retail China Trust (CRCT) instead, paying $1.40 a unit. 

Just a few months ago in September 2016, CRCT hit a high of $1.66 a unit. 




Why the big decline in unit price? 

It was probably due to a 10.6% drop in DPU, year on year. 

A new tax in Beijing and a weaker RMB were the reasons. NAV also declined by almost 12% to $1.56 per unit.

Offering a higher yield than CMT even now and having ownership of a portfolio of shopping malls in a market with arguably more room for growth (in terms of organised retail activity) than Singapore's, I decided CRCT is probably worth investing in. 




After all, a 10.6% decline in DPU doesn't warrant an almost 15.6% decline in unit price unless we are expecting a more severe decline in DPU. 

In fact, I think that DPU should recover somewhat as CRCT's non-Beijing malls could pick up the slack over the course of the year.

Having said this, I am reminded of a longer term risk, that land lease in China is typically 50 years and that could explain why Mr. Market demands a higher distribution yield for a retail REIT in China compared to one in Singapore. 




I do not know if, like in Hong Kong, land lease could be renewed easily. This is one risk to bear in mind if we choose to invest in CRCT.

(September 2016.)

Another risk we should be aware of is financial in nature. CRCT's loans are mostly S$ loans but its income and valuations are in RMB. 

This arrangement is similar to Lippo Malls' and I blogged about it before (See blog: here). 

A decline in RMB against the S$ could see both gearing and interest expense affected in a bad way.




Although I have said that CRCT would likely see income increasing over time, this is going to be a gradual process. 

So, to be prudent, I am keeping my investment in CRCT relatively small.

CRCT's 4Q2016 results.

As CRCT distributes income half yearly, I will be receiving DPU of 2.37c (4Q2016) and 2.36c (3Q2016) for a total of 4.73c in March. 

Annualising the DPU gives me a distribution yield of 6.75%.

Again, why did I choose to invest in FLT and CRCT in an environment of rising interest rate which would impact their cost of doing business eventually? 

You blur? 

I also blur.




Xizhimen Beijing. Just next to the train station.