2nd Qtr 2018 ; Dividend and Portfolio Update

Market has been in a much more volatile situation in 2018 as compare to 2017 and the latest political & economic issues face by Italy is making the market looks riskier. Italy has been a problematic state among EU countries for many years. It ranks among the countries with the largest debt—around 2.3 trillion euros—and has been facing a double-digit unemployment rate since 2012.

Italy could be the next Greece — only much worse from CNBC.com

Growing tension in the Korean Peninsula and the potential trade war between US-China and US – Europe, no doubt has contributed to recent market volatility.

I am sure the market will continue to be volatile and bumpy for the rest of the year, one will need to have long term view in your investment horizon and maintain a more diversified portfolio as well as asset allocation, also having some war-chest ready to take advantage in case of the market really turn into crisis mode.

image credit to Izquotes.com

As usual, my dividend income is highest in 2^nd Qtr of the year due to payment from most of the blue chips like banks / Keppel Corp / Semb Corp Ind as well as Telcos.

Total Dividend & Interest Income for 2nd Qtr 2018 = $ 60.308.16

·         This is about 4.2% lower than last year’s result since I continue to divest more REITs and channelling more of my fund towards non-REITs sectors.

Total Dividend & Interest Income in 1^st HF 2018 = $ 94,136.62 which is also about 5.4%  lower than last year.

                                        < Dividend detail by stocks for 2nd Qtr 2018>

As I mentioned before, I would like to reduce my REIT/Biz Trust allocation in my portfolio to around 40-45% in the long run as my portfolio is heavily skewed towards these asset class since GFC where I took advantage to enjoy the double-digit dividend yield from these REITs/ Biz Trust. But under the circumstance of increasing interest rate environment, I keep trying to reduce my exposure in these sectors.

% of REITs/ Biz Trust in my Portfolio :

2013 (92 %)2014 (88% )2015 (77.7% ) , 2016 (69%) , 2017 (60% ) , 2018 – June ( 48.6%)

Portfolio Update : 1^st June 2018

Total stocks = 45 (increase by 1 since last update)

Top 4 holdings remain the same: Keppel Corp/ First Reit / SIN TEL / Comfort DelGro

I have decided to increase my holding in Lippo Mall after the recent price dropped due to new tax issues and it has overtaken OCBC in the fifth position. Not many changes for the rest.

I decided to divest 1 REIT and 2 Business Trust since last update and respective stock’s return as below :

< Viva Ind Trust >

·         Viva Ind trust turned out to be a good one with almost 20%  of  XIRR in two years investment. Reason for divesting this counter is because of the merger with ESR.

·         One may notice that I have been reducing my holding in ESR from as high as 17% in 2014 to now only 3.3%.

·         After the merger, the VIVA’s shareholder is expected to receive 90% of value in ESR’s share (10% in cash payout)  which is the reason why I don’t really like it as I already in the process of divesting ESR’s holding in my portfolio. The dividend yield for ESR is also much lower than Viva Ind Trust.

image credit to finance.sina.com

In fact, Cambridge Ind Reit ( subsequently renamed as ESR- REIT) is one of my early holding since 2008/09 after the GFC which gave me double-digit yield at that time. 

I have made in total $404K (including dividend ) with XIRR of around 20% from this counter since 2008, which is why I repeatedly reiterate that investing during the crisis is really important and will definitely make huge different in your ROI if you dare to buy during crisis …( by luck or hindsight ).

< Cambridge Ind REIT / ESR-REIT>

< Far East H Trust >

·         I have bought into this counter at the quite high entry price, resulted in a loss of -$1240.36 before the dividend.

·         With dividend collected for almost 6 years, the XIRR was just around 4.6% which equivalent to long term bond and nothing to be proud of.

  

<Manulife REIT (USD ) >

·         I am quite satisfied with the return of around XIRR=12.4% in two years but I have decided to divest this counter as their aggressive asset acquisitions recently made me worry about the decreasing DPU.

Added 4 counters into my portfolio as below :

Other than TREK2000 which is more on speculative and “special event “ kind of investing, the rest of the three I intended to hold it for a much longer period.

Bought into Valvetronic in recent price dropped and in view of a clean balance sheet, I would like to keep it as dividend stocks as well. As for Kingsmen Creative, although the business prospect remains challenging with a quite strong balance sheet, I am hoping for business recovery in mid to long term and have confidence on the track record of the management. Chuan Hup will be an “asset play” with high cash holding and sometimes could surprise us with a special dividend.

Again, as I have highlighted many times, nobody knows how these stocks may turn out and is really a game of probability. If I could hit 75% right (as an armature player) I would be very happy.

Cheers !!