July 2019 Singapore Savings Bonds is 2.16%

This post came late as I was taking a short break from blogging last week. Coincidentally, at the point of writing this post, Astrea V Pte Ltd lodged their Astrea V Bonds final prospectus today that offers 3.85% p.a.

Even though the interest rate offered by Astrea V Bond is higher as compared to Singapore Savings Bonds, Astrea V Bonds are far more complex to understand as compared to Singapore Savings Bonds. For those that wanted a risk free investment without much thinking involved, I will recommend to buy Singapore Savings Bonds.

For those still keen in Singapore Saving Bonds, the effective interest rate for July 2019 Singapore Savings Bonds (GX19070W) is 2.16% if you held it for 10 years. The interest rate is the lowest for the past 12 months. Nevertheless, as usual, I shall be allocating a portion of my monthly salary into safe haven as the Singapore Savings Bonds acts as a form of emergency fund when the need arises.

If you didn’t know yet, SRS applications for Savings Bonds open from March and individual limit has doubled to $200,000. I personally felt that the introduction of SRS application for Savings Bonds is an excellent initiative as the SRS currently earns a petite interest rate of 0.05% per annum. In March, I have used partial of my SRS funds to purchase the Singapore Savings Bonds for the higher interest.

DBS Multiplier Account + Singapore Savings Bonds

If you hold a DBS Multiplier Account, you can perhaps try the hack I previously wrote about to achieve a higher interest rate payout. (Read more: Earn More Interest With DBS Multiplier Account + Singapore Savings Bonds).

Singapore Savings Bonds versus Fixed Deposits

The interest rate of Singapore Savings Bond is also higher than most fixed deposits that banks can offer for 12 months. (Read more: CIMB Fixed Deposit Promotion Makes Your Money Work, Not You!)

Tracking Singapore Savings Bonds via StocksCafe

My favorite website, StocksCafe has introduced a new feature to allow adding of Singapore Savings Bonds into your portfolio. If you didn’t know, I signed up as a Friend of StocksCafe as my most favorite feature of StocksCafe is the automated tracking of dividends payout.

Tracking Singapore Savings Bonds via My Savings Bonds Portal

MAS has launched My Savings Bonds Portal where you can track your Singapore Savings Bonds purchases separately from your stock purchases. I have done up a simple guide here. (Read more: Guide to My Savings Bonds Portal)

Summary of May 2019 Transactions

Besides the regular purchase of Singapore Savings Bonds, I have not bought nor sold any stocks this month. I did a recent analysis of Manulife US REIT after the results from my last screening for dividend stocks showed that Manulife US REIT has a dividend yield of 8.736%. I almost jumped into this stock. However, with the recent price run up, I computed the current dividend yield to be 6.63% based on the current share price of US$0.84 and this halted my decision.

I personally felt that there is not enough margin of safety to enter Manulife US REIT at the current price of US$0.84. My biggest concern is that Manulife US REIT is a pure US play, any hiccups or announcement in the US economy will hit Manulife US REIT hard. We all know any decision or announcement from Trump throws the stock market into turbulence. Frasers Commercial Trust seems to be a better play with similar dividend yield at 6.53%. Thus, I decided to keep Manulife US REIT in my watchlist. I probably may settle for SPH REIT given its stability even though the dividend yield is lower at less than 6%.

Dividends have came pouring in the last week of May. I have collected dividends from Parkway Life REIT, Frasers Commercial Trust, Kingsmen Creatives, CapitaMall Trust, Mapletree Commercial Trust which all goes into my war chest for my next purchase.

What shall I buy next?

My Personal Analysis of US Manulife REIT

In my last screening for dividend stocks, US Manulife REIT appeared top in the results with 8.736% dividend yield. This has got me interested to drill deeper and understand this REIT further. On a high level note, Manulife US REIT is a Singapore REIT established with the investment strategy principally to invest, directly or indirectly, in a portfolio of income-producing office real estate in key markets in the United States, as well as real estate-related assets.

Manulife US REIT was listed on SGX on 20 May 2016 and is the first pure play US office REIT to be listed in Asia. The IPO price of Manulife US REIT was 0.83 US cents. Read More