7 Fallen Angel Stocks In September 2020

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Fallen Angel Stocks

Below are 7 fallen angel stocks in September 2020 whereby their current share price has almost reached their 52 week lowest price. The term “fallen angel” is often used to describe a stock that has fallen from its all-time highs.

Most investors will stay away from a stock when it’s share price suddenly plunges. This is not wrong because our psychological mindset tells us not to catch that falling knife.

Warren Buffett once said “Be fearful when others are greedy, and greedy when others are fearful.” In my opinion, not every fallen angel stock is a bad stock. A fallen angel stock can be an opportunity for value investors. We should assess whether the factors that causes the plunge in share price of the company is temporary or permanent.

Using my favourite stock screener from Stocks Café, here are 7 large cap stocks that have fallen from their all time high.

Name Market Capitalisation 52-Week Lowest Price Current Price (28th Sep 2020)
Sembcorp Marine 1.8B S$0.141 S$0.143
Singtel 34.5B S$2.12 S$2.13
SPH 1.7B S$1.02 S$1.05
SIA 10B S$3.20 S$3.41
Keppel Corp 7.6B S$4.08 S$4.19
Olam International 4B S$1.24 S$1.27
Haw Par 2.1B S$9.10 S$9.32

From the above list, there are a few companies that I know of and why their share price have fallen so much. For example, we know that Sembcorp Marine has been hit badly by the COVID-19 pandemic and recent collapse in oil prices. Sembcorp Industries and Sembcorp Marine had proposed a S$2.1 billion recapitalisation and demerger.

If you are keen to catch any of the above fallen angels, do study in details on whether the business fundamentals are still intact.

NTUC Income Gro Capital Ease Guaranteed 1.96% p.a.

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NTUC Income Gro Capital Ease

NTUC Income Gro Capital Ease is a single premium savings plan that gives you a lump sum payout with guaranteed return of 1.96% per annum over 3 years. You will receive the lump sum payout at the end of the policy term.

The previous tranche was offered on a limited and first-come-first-serve basis in June 2020 with a guaranteed return of 1.85% per annum over 2 years.

What Are Endowment Plans?

NTUC Income Gro Capital Ease is an Endowment plan. Endowment plans are life insurance saving plans that are offered by insurance companies. The aim is to help policyholders save towards specific financial goals. Policy holders can contribute a regular amount for a designated period of time or pay a lump sum upfront at the start of the policy.

Upon maturity of the policy, you will be give a lump sum payout with the guaranteed return. It is best to study the plan carefully as certain endowment plans offers non-guaranteed returns.

NTUC Income Gro Capital Ease guarantees a maturity benefit of 106% of the single premium after 3 years. No gimmicks here!

What I Loved About NTUC Income Gro Capital Ease?

  1. You are guaranteed acceptance regardless of your health condition. You are protected against death and total and permanent disability (TPD before age 70).
  2. The minimum single premium for online purchase starts at $5,000 which is affordable. The premium is payable via eNets, PayNow QR or Supplementary Retirement Scheme (SRS) funds, or at $20,000 if made through a financial advisor representative, payable using cash or SRS.
  3. This is the only Endowment plan that I know of that has the option to pay premiums using Supplementary Retirement Scheme (SRS) funds.

NTUC Income Gro Capital Ease Versus Singapore Savings Bonds?

Below is the interest rate for October 2020 issue of Singapore Savings Bonds. The interest rate is 0.26% for year 1 and 2 and 0.42% for the third year.

This averages to 0.31% p.a. if you held the October 2020 issue of Singapore Savings Bonds for 3 years. Needless to say, NTUC Income Gro Capital Ease is the clear winner against the Singapore Savings Bonds.

SBOCT20 GX20100N Bond Details

How Does The Endowment Plan Fare Against Fixed Deposits?

In my opinion, DBS Bank offers the best fixed deposit rates in September 2020. For a 36 months placement on amounts from S$1,000 to S$19,999 with DBS Bank, you get an interest rate of 0.85% per annum.

DBS Fixed Deposit Interest Rates 3 September 2020

NTUC Income Gro Capita Ease is still the clear winner here if we compare the interest rate with the interest rates offered by current fixed deposits promotions.

My Opinion

This is the only endowment plan that allow you to pay for the premium using your Supplementary Retirement Scheme funds. With falling interest rates by Singapore Savings Bonds and fixed deposits, this is the current most attractive plan around to grow your money with low risks involved.

This short term endowment plan is available for purchase from 28 September 2020 onwards.