Singapore Savings Bond and T-bill allotment (April 2023.)

We have both Singapore Savings Bond and T-bill allotment results today.

As I increased the amount of money for both, I was crossing fingers for a full allotment in Singapore Savings Bond and also a relatively good cut-off yield for the T-bill.

Getting a full allotment in Singapore Savings Bond would not only mean mission accomplished with regards to money meant for voluntary contribution to my CPF account in 2024.

It would also mean possibly locking in a 10 year average yield of greater than 3% per annum which we might not see again from a Singapore Savings Bond for some time to come. 

This is a possibility with interest rates softening in recent months.

If I did not get a full allotment and if the 10 year average yield of Singapore Savings Bonds offered for the rest of the year should be lower than 3% per annum, then, I would have to do a voluntary contribution to my CPF account in the month of December later in the year.

Well, it seems that luck is on my side.

A total of $700 million was offered in Singapore Savings Bond but the applications within individual allotment limit totaled $697.2 million.

So, my application with a sum of $22,000 was fully allotted.

Mission to put $38,000 meant for CPF voluntary contribution in 2024 to work for a higher average yield is accomplished.

I will have one less thing on my mind and this makes me happy.

As for the 6 months T-bill, I have always placed non-competitive bids when using cash on hand since I am only a small timer.

Anyway, even a 3.65% cut-off yield would still be more attractive than fixed deposit rates offered by DBS, OCBC or UOB now.

The fact that the "interest" is paid at the start of the 6 months term means that the effective interest rate is actually higher too.

The latest auction's cut-off yield is 3.83% p.a.

This is a positive surprise as I had expected the cut-off yield to trend lower after the last 6 months T-bill's cut-off yield of 3.75% p.a.

This is doubly or triply good news for me since I had put in a non-competitive bid with a sum of $15,000 instead of $5,000 which I had originally planned to do.

My T-bill ladder is complete and the plan is to continue rolling funds from maturing T-bills into new T-bills as long as the front end of the yield curve remains elevated.

Make hay while the sun shines.

I am still on the path to preserving capital, believing that cash is not trash in the current environment.

With so many things that could go wrong in the world nowadays, it is probably not a bad idea to be slightly more defensive.

As an retiree investor for income, it gives me greater peace of mind to reduce beta or volatility in my portfolio.

This is done while ensuring that my investment portfolio continues to generate sustainable passive income for me now and in the future.

For sure, not everyone will find this path that I am on an interesting one as it is probably quite boring.

However, we can all come up with a plan to invest in bona fide income generating assets if we want to achieve financial freedom.

If AK can do it, so can you!

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1. Update on saving for income.
2. CPF or Singapore Savings Bond?
3. Largest investments (4Q 2022.)

IREIT secures 15 year lease for Darmstadt campus.

This will be a very quick update on IREIT Global.

When I blogged about IREIT Global in February, I said I wasn't doing a Chicken Little because the vacant asset in Darmstadt would be progressively filled.

I also said that rental escalation was likely to continue as inflation remained elevated in Europe which would lead to higher asking rents as rents were linked to CPI.

The latest news from the management of IREIT Global is that 25% of Darmstadt Campus has been leased to a German federal government body.

The lease has rent secured at the prevailing market rate and it starts on the 1st of June and will last for 15 years.

Yes, 15 years.

This development is encouraging.

I believe that IREIT Global's management is competent and that the REIT owns quality assets which are very desirable.

Regular long time readers might remember that I also like the fact that IREIT Global's sponsors own approximately 50% of the REIT's units which means they have plenty of skin in the game.

Although this latest development is very good news, 75% of the asset in Darmstadt still needs to be filled.

So, I remind myself there is no hurry to increase my investment in the REIT as we are not out of the woods yet.

I will wait and see while my war chest continues to be refilled by incoming dividends.

Recently published:
1. Update on plan to save for income.
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