How much more will AVIVA be paying AK?

I have blogged about how I buy single premium endowment policies with my SRS money before.

The best product ever was the Guaranteed Rewards plan from UOB Life which unfortunately is no longer available.

That guaranteed 3% to 4% returns per annum over an 8 to 10 year period. Of course, there was a life insurance component as well.

A Guaranteed Rewards $20,000 endowment policy that matured 2 years ago became more than $30,000 after the 10 year period was up.

That was 4% compounded yearly over a 10 year period. Some might not agree with me but I feel that for a relatively stress free option, it was not too bad.

I have another Guaranteed Rewards policy that is going to mature soon. I think it is probably going to be next year.

In the meantime, I have a single premium endowment policy from AVIVA called Guaranteed XO which is maturing on 21 November 2013 after 8 years. This one has a guaranteed portion and a non-guaranteed portion which pays every 2 years.

I cannot remember exactly but the last three payouts were unimpressive. I was probably paid less than $800 in total.

In their latest advice to me, they did not say how much more I would be paid on top of the single premium of S$10,000 all of which would be returned to my SRS account.

Will I get a pleasant surprise in November?

Pleasant surprise or not, this is going to beef up my SRS account which is one of my 4 war chests.

Related posts:
1. Great Eastern Life paid me $4,000.
2. Customer service in insurance companies.
3. A war chest called "SRS".

First REIT: DPU increased 16.7% to 1.96c.

On 26 July, I blogged about a 16.4% increase in First REIT's DPU. That was due primarily to contributions from 4 newly acquired properties. So, a continuation of the higher DPU through the quarter that ended 30 September should not come as a surprise.

Sometimes, in REITs, we see increases in net property income and distributable income but a lower or stagnant DPU. Of course, if the gearing level should be significantly reduced, it could be acceptable. Otherwise, all else being equal, it just means that we had an incompetent management.

When I initially invested in First REIT years ago, it had a relatively low gearing ratio. It was a bit more than 10%. Now, it is above 30%. So, the higher DPU has been achieved by leveraging up. Now, I am not saying that this is a bad thing.

However, to continue growing through acquisitions is going to be more difficult especially because the management wants to keep gearing at around 30%. This was also why I cautioned in an earlier blog post that we could expect a private placement if there should be another acquisition in the pipeline.

With the management saying that they are exploring AEIs to enhance income stream and to maximise returns to unitholders instead, the prospect of having a private placement is much weaker now. I view this as a good thing.

To have a private placement in order to strengthen the balance sheet making an acquisition or development less onerous might or might not result in a higher DPU. In the case of AIMS AMP Capital Industrial REIT, DPU improved while in the case of Cache Logistics Trust, DPU declined although marginally. So, in the case of First REIT, since we have a good thing in hand, why change it? The status quo is fine by me.

The CEO of First REIT's manager, Dr. Ronnie Tan, has a reputation for accumulating the REIT's units at all price levels. His interests are more aligned with unitholders', therefore. So, this is, perhaps, a reason why First REIT has been such a good investment for retail investors.

Related posts:
1. First REIT: DPU increased 16.4% (Part 1).
2. First REIT: DPU increased 16.4% (Part 2).