$$$ KPO and CZM $$$: February 2018

Monday, February 26, 2018

New Singapore Budget, New REIT Strategy!

Apart from the increase in GST and the government ang bao (red packet), one thing that really interest us is the extended tax transparency treatment of Singapore listed REITs (Real Estate Investment Trusts) to ETFs (Exchange Traded Funds) - Singapore Budget 2018: Reit ETFs to enjoy tax transparency. In short, this means that the REITs ETFs will no longer have to pay the 17% tax and the dividend yield will increase significantly! I blogged about 3rd REIT ETF - Lion-Phillip S-REIT ETF previously and how we will give it a miss because of the tax and its impact on the estimated yield.


As usual, I took some time off and played with the numbers. Interestingly, the holdings are slightly different as compared to its IPO. You can look at the google spreadsheet here if the picture is too small. The indicative holdings (as of 23rd Feb 2018) are obtained from the Lion Global Lion-Phillip S-REIT ETF website.


The estimated (using 2017 full year dividends) yield is around the same at 5.86%. Assuming that the total expense ratio for a year is around 0.6%, the dividend yield would be 5.26% if one were to purchase the ETF at its NAV of $0.999. At the point of calculation, the ETF closed at $1.015 with a CD status and will XD on 2nd Mar 2018 with $0.0168 dividend. $0.999 + $0.0168 ~ $1.0158. Do note that this is only an estimation and the dividend yield will definitely be lower for this year because the tax transparency will only take effect on/after 1st July 2018. Having said that, we would be expecting at least 5% dividend yield in FY 2019 onwards which brings me to our new strategy!

As some of the readers may know, we have a mutual/common fund called KPO Fund (surprise, surprise) where we were contributing $1,000 each every month. You can read more about it here - Managing Finances As A Couple. The fund is divided into "Expenses" and "Investments" where we put $1,000 into each monthly. With the promotion and pay bump (Salary - You Are Your Best Investment), we have decided to increase our contribution to $1,500 each every month. However, we agreed that our expenses should not increase hence the monthly contribution has become $1,000 to "Expenses" and $2,000 to "Investments".

The $2,000 can be further broken down into $1,000 to StashAway - Automating Capital Growth Through StashAway and $1,000 to Lion-Phillip S-REIT ETF! Hopefully, we will be able to remove the emotional side and properly DCA (Dollar Cost Averaging) Lion-Phillip S-REIT ETF on a monthly basis. We are supposed to DCA STI ETF on a quarterly basis but that has not been very successful. lol. With that, we bought 2,000 units of Lion-Phillip S-REIT ETF @ $1.016 today. Our "Investments" fund had ~$2,000 and we decided to fully utilize it :)

What is your strategy?

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Tuesday, February 20, 2018

Monster Hunter World - Hammer Build (Max Earplugs + Attack Boost + Weakness Exploit)

I am sharing something different today - my Hammer build/equipment in Monster Hunter World! This mixed armor build gives max Attack Boost (Level 7), max Earplugs (Level 5) and max Weakness Exploit (Level 3)! It comes with lots of slots for decorations/jewels too! All these are before augmentations.

In my opinion, these 3 skills are necessary for a hammer player because we go for the highest damage output! Max earplugs ensure that we will not be affected by the monster's roar and give us the opportunity to continue whacking. One can argue that rolling out of the roar works but we will lose the charge as a result.


Weapon: Obliteration's Footfall (1 slot - level 1)
Head: Bazel Helm Beta (2 slots - level 3 and level 1)
Body: Dober Mail Beta (1 slot - level 3)
Glove: Kaiser Vambraces Alpha (1 slot - level 1)
Pants: Bazel Coil Beta (1 slot - level 3)
Legs: Dober Greaves Beta (1 slot - level 1)
Charm: Attack Charm 3

Required Decorations/Jewels:
- 1 Earplugs Jewel 3
- 1 Tenderizer Jewel 2

Alternatively, one can also change the head, glove, and charm to give a similar build.

Weapon: Obliteration's Footfall (1 slot - level 1)
Head: Dragonking Eyepatch Alpha (1 slot - level 1)
Body: Dober Mail Beta (1 slot - level 3)
Glove: Kaiser Vambraces Beta (1 slot - level 3)
Pants: Bazel Coil Beta (1 slot - level 3)
Legs: Dober Greaves Beta (1 slot - level 1)
Charm: Earplugs Charm 3

Required Decorations/Jewels:
- 3 Attack Jewel 1


I prefer the first build because you can get more decorations slots to play with. With the first set, I have an attack of 1279 and a defense of 395! Going to slay some dragons now, happy hunting :)

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Monday, February 19, 2018

Red Red Market for Chinese New Year!

Let KPO start by wishing all my readers a Happy and Healthy Chinese New Year! 恭喜发财,身体健康!Huat ah!

It has been 2 weeks since I last blogged! CZM (being one of my readers) reminded me that it has been a long time! What have I been doing for the past few weeks? Busy playing Monster Hunter World! Hahahaha. I am currently at HR (Hunter Rank) 52 and have clocked > 80 hours of gameplay till date. Shall stop here, CZM is already complaining she has lost her bf.

Apart from gaming, I am also busy preparing my wedding video speech for our parents (it is so hard to write mushy stuff in Chinese). To save money, I will be making all the wedding videos! We will also do without actual day videography since we are keeping things as simple as possible such as no gate crashing and everything (fetching the bride and tea ceremony) will be done at the hotel! Contemplating if we should be renting a wedding car on the actual day...

The last 2 weeks, all the markets were in red and I received FB messages and emails asking what to do, etc. My reply to them is the same, we are not doing anything and there will definitely be volatility in the markets. Technically, we did something, we bought 1,000 units of STI ETF @ $3.40 and was queuing for Singtel last week but did not get it. We are using money which we do not need in the near future to invest and we are prepared even if the market crashes and our portfolio drops 50%. The last 3 weeks, we have seen our portfolio decreased by $17,158.59 but life goes on :) Numbers are relative right, what is our loss compared to theirs - These 10 Billionaires Lost $40 Billion This Week As Stocks Plunged.

KPO and CZM Portfolio Summary

One can argue that protecting the capital is important, a drop of 50% would require a 100% gain to break even, etc. Honestly, who knows what is going to happen? There are studies that show missing out one of the good days can be just as painful - Cost of Missing 10 Best Days. At the end of the day, there are really no right/wrong/best financial decisions. Make one and live with it. We are investing for dividends, hence we are not too concern with the ups and downs of the market.

My dad recently received the "Retirement" letter from CPF informing him that he can withdraw his CPF money soon. If you are interested, you can find it here - CPF Retirement Booklet. As usual, he would ask me to explain what is happening and I told him that the government is giving him money, $5,000.65 to be exact. He was pretty happy and was saying that our government is good. To put it into context, my dad has been working in Malaysia for many years and is currently a taxi driver. As a result, he does not have much in his CPF, ~$6k+. He is probably one of the rare ones that can get close to 100% out! Today, the government announced that the GST will be increased to 9%, he said government not good. lol. I have not been following it closely but came across the condensed version by Seedly which I thought is pretty neat - Seedly Singapore Budget 2018.

Danger danger! New readers/investors, please do not follow or read further! As you might be aware, we are pretty aggressive in building wealth and we do not really have an emergency fund or a "war chest". We are exploring the possibility of using leverage to 1. further build wealth and 2. serve as our "war chest". People investing in properties and companies raising debts are all forms of using debts to grow wealth/assets. So what is stopping us from doing the same? We are looking at Standard Chartered Secured Wealth Lending specifically since our investment is with them. We were quoted a fixed rate of 1.6% + 1-month SIBOR (which has been increasing!). I guess this can be a separate post itself.

Back to MHW!

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Thursday, February 8, 2018

StashAway - January 2018

We have decided to invest more money (from $500 to $1,000 monthly) through StashAway and I blogged about it here - Automating Capital Growth Through StashAway.

1. ACCOUNT SUMMARY (as of the last day of the month)

StashAway Account Summary

Based on the statement (30 Jan 2018), we had $90.46 profit after taking into account a -$56.00 currency impact.

StashAway Asset Summary

The profit has vanished in the last few days to $13.00 but we are not too concern. Short-term volatility is noise while long-term will be $$$. That is how the market works.

SGD time-weighted returns: 0.7%
USD time-weighted returns: 4.5%

2. PORTFOLIO DETAILS 

StashAway Portfolio Details

3. TRANSACTIONS

StashAway Transactions

I am still going to complain about the amount of USD we are getting from our SGD deposit and the exchange rate. Technically, this can be easily computed from the USD cash flows and once the USD amount is obtained, the exchange rate will be revealed.

SGD $990.00 converted to USD $756.78
Exchange Rate: 1.308174106

Not too bad. Managed to get some USD at its low.

4. FEE CALCULATIONS

StashAway Fee Calculations

No fee till April 2018 because I recommended a friend. The projected fee (assuming no referral) would be the monthly-average assets SGD $3,288.68 x 0.8% / 365 days * 31 days = $2.23

StashAway VS STI ETF
Since there is no way to compare the performances among the robo-advisors, I came out with a spreadsheet to track our StashAway portfolio performance (General Investing - Risk Level 28) against that of STI ETF which I will be updating on a monthly basis. For simplicity, I shall assume that one can either invest in Nikko STI ETF using POSB Invest-Saver or invest in SPDR STI ETF using SCB Priority Online Trading (no minimum commission). These would be the opportunity costs while we continue to invest in StashAway.

Apart from the absolute P&L, we should also look at the Reward-to-Risk Ratio where risk/volatility is taken into account. For more information, do read StashAway Clarifications - Reward-to-Risk Ratio. StashAway has the highest ratio of 1.25 which is significantly higher than the other 2 STI ETFs (< 0.4). Let me quote Freddy Lim (Co-Founder & Chief Investment Officer of StashAway), "for every dollar of risk taken, StashAway P28 is producing 1.25 times the return".

StashAway Portfolio VS STI ETFs

This month commentary: Interestingly, we can see that POSB Invest-Saver (NIKKO STI ETF) is in red. Apart from the performance of the market, we can also attribute it to the total fees/commissions incurred. At 1% sales charge, the total fees/commissions incurred is now > 4 times as compared to StashAway (0.8%) and SCB Priority Online Trading (~0.18%). Both ETFs have declared dividends and have been taken into account. StashAway did slightly better for this month. I think there is a need to redo/regenerate the volatility used to compute the Reward-to-Risk Ratio. Do take it with a pinch of salt for now. I have been compiling some data in order to do so :)

Which is the best? Only time will tell :)

This is the link to our spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF which I have also added to Our Portfolio page.

StashAway Referral Link for Our Readers
Here you go: KPO and CZM Referral Link

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Sunday, February 4, 2018

Portfolio Update - January 2018

Our portfolio increase by 7.24% to $317,607 - $11,017.22 of capital injection and $10,431.30 of  capital growth.

KPO and CZM Portfolio Bar Graph

The year started with a BANG and within the first week, our portfolio crossed the next 100k milestone to $300,000.

Stocks.cafe update for KPO and CZM Portfolio

SOLD
- Soilbuild Business Space REIT (15,000 units) @ $0.705

KPO and CZM Sold Transaction - Soildbuild REIT

Soilbuild Business Space REIT was one of our biggest holdings with 30,000 units. It has been hit with a series of unfortunate events, one after another. Apart from the 2 defaults, the latest bad news is that their property has been revalued down. Based on the latest 4QFY17 results, NAV decreases from $0.72 to $0.64 which meant that it is trading at a premium. DPU decreases by 6.2% YoY even though NPI increases. We are no longer willing to take the risk of capital loss, lower DPU, and uncertainties. Hence, we decided to sell half of it. Selling it before XD means giving up $0.01383 of dividends but we are expecting the price to drop below $0.69 after XD and it sure did.


BOUGHT
- ThaiBev (6,000 units) @ $0.92
- Geo Energy (7,000 units) @ $0.265
- Wilmar (2,000 units) @ $3.19
- Ascendas H-Trust (9,000 units) @ $0.895

I have blogged about ThaiBev and Ascendas H-Trust separately. Do refer to those articles for more information. We purchased Geo Energy October last year and decided to buy more for the same reason. We bought Wilmar because it is one of the stock that did not/yet to run up in the bullish market, it is currently trading at PE ~10-11+ which is significantly lower than the others (e.g. Olam). We believe that there is definitely room for capital gain while waiting patiently and collecting ~2% of dividends.

Dividends
The total dividends collected this month is $642.95. The breakdown is as follows:

Company Symbol ExDate Shares Total
CapitaLand Commercial Trust C61U 31-Jan-18 2,000 $82.00
CapitaLand Mall Trust C38U 30-Jan-18 7,000 $203.00
Soilbuild Business Space REIT SV3U 26-Jan-18 15,000 $207.45
First Real Estate Investment Trust AW9U 23-Jan-18 7,000 $150.50

Total dividends collected for 2018: $642.95
Average dividends per month for 2018: $642.95

StashAway

KPO and CZM StashAway Asset Summary SGD

Capital: $4,000
Current: $4,048.22 (IRR: 2.6%)

USD has been falling significantly which resulted in the high negative currency impact. Overall absolute return is now lower than STI ETF based on our spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF.

Do take a look at this article if you missed it - StashAway Clarifications - Reward-to-Risk Ratio where Freddy Lim (Co-Founder & Chief Investment Officer of StashAway) clarify how StashAway is optimizing return by taking on lesser risk.

StashAway Referral Link for Our Readers
Here you go: KPO and CZM Referral Link

Health KPO Needs to Lose Weight
Date: 2018-02-03
Weight: 71.4 kg (Lost close > 10 kg already!)

BMI: 23.8

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Thursday, February 1, 2018

Ascendas Hospitality Trust

With the market running up so much and STI hitting a multi-year high, it has been harder and harder for us to buy stocks. Everything seems so expensive until today! Our latest buy - Ascendas Hospitality Trust 9000 units @ $0.895 :)

Ascendas Hospitality Trust Valuation and Properties

Let me give a quick introduction to Ascendas Hospitality Trust. It has 11 9 properties in 7 6 cities, 4 3 countries (Australia, China, Japan and Singapore) valued at $1.6 Billion. Based on the last quarter financial statement, its current NAV is was at $0.891 which translate to a PB of 1.01.

Ascendas Hospitality Trust Stock Fundamentals

However, on the 29th January 2018 (after market close), Ascendas Hospitality Trust announced that it will be divesting its China investment/properties at a premium of 101.5% above the Independent Valuation. You read that right.


This divestment meant that its NAV would shoot up. Note that the numbers are generated with the assumption that the divestment has taken place at 31st March 2017. The total number of shares/stapled security would have increased since then. Using the latest (2Q) financial statement, a more realistic NAV should be [1.02 - (0.92 - 0.891)] * 1,124,481 / 1,127,553 ~ $0.988 which translate to a PB of 0.905 (at a discount)! I am expecting it to trade closer to PB of 1 which is around $0.99.

Ascendas Hospitality Trust Net Property Income (NPI) by Geography

Looking at the annual report FY2016/2017, China contributed 8% of the Net Property Income (NPI). A conservative assumption is that the DPU (Dividend Per Unit) will be impacted by the same percentage, 5.68 * 0.92 ~ 5.22 which translate to a 5.8% dividend yield. This is on the low side but it certainly has room for improvement through yield accretive acquisitions because it has the cash/lower gearing going forward (~20+%).

I made all these calculations while I was on a bus traveling to work yesterday and decided to queue for it before market open. Blogging it down to see how wrong/right I am as its 3Q financial statement will be out today after trading hours.


On a side note, APAC Realty went up by 9% crazily (no announcement) yesterday to close at $1.08. At least I am right for this analysis and am sitting on a 25% profit (for now)!

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