Disappointed with SReits / Thoughs on T-Bill bought using CPF-OA

 Link Reit (listed in HK) released its 1H results recently. Its DPU rose 3.7%. 

Better than most SReits:

- Mapletree Pan Asia Commercial Trust (MPACT) DPU dropped 11.6%

- Fraser Centrepoint Trust (FCT) DPU dropped 1%

- CapitaLand Integrated Commercial Trust (CICT) DPU rose 2.5%.

Most SReits have this syndrome of 'overseas acquisitions' to increase their AUM and fees for their reit manager. End of day, their overseas assets under-performed  compared to their SG assets. Not sure if this is SREIT's tuition expenses for their lack of competency / knowledge in overseas conditions.

A few weeks ago, I bought FCT at $2.28 using CPF-OA funds*, after a T-bill (bought using CPF-OA funds) matured. Now, it's trading at $2.11. On hindsight, I should be more patient and waited for lower share price. Nonetheless, I will keep the FCT shares, since I am buying it for dividend purpose. As long as FCT's DPU is stable (i.e. did not decline much), I will continue to hold it. 

*CPF-OA funds have restrictions in buying shares. It can only buy certain stocks listed in SGX. It cannot be used for buying shares in overseas markets. 

I have some T-Bills, that are bought using CPF-OA, maturing in Nov and Dec. After maturing, the funds will be shifted back to CPF-OA (which gives 2.5% interest). They will be my warchest to buy index ETFs, when there is a market crash (i.e. 20% or more drop) in future. 

SRS, CPF OA transactions

 My SRS and CPF-OA are accounted seperately from my stock portfolio

SRS Transaction

Sold entire UOB position on 5 Aug 2024. Turn pessimistic on SG banks, as US Fed rate may be cut starting Sep 2024. 

On the funds from the sale, I am undecided on whether to put them in Singapore Savings Bond (SSB) or Cromwell Reit. 

CPF-OA Transactions

I had monies coming back from the maturity of T-Bills. Had bid 1-year T-Bill at 3.5% ecently but it was unsuccessful.

Also sold AEM at a loss of $1.56. I am scared off by the drop in price. Probably should have cut loss earlier. 

The funds are deployed to 

- NikkoAM-StraitsTrading Asia ex Japan Reit ETF (CFA) at $0.775. Reits will benefit from the upcoming US Fed cuts

- NikkoAM SGD Investment Grade Corporate Bond ETF (MBH) at $0.769. 

I did not use the funds to buy T-Bills, as its yield (on the last 6-mth T-Bill) dropped to 3.4% and the yield may dropped further, if US Fed interest rate drops more in future.

MBH ETF should provide 3+% interest for sometime, given its weighted duration of 5.6 years. Furthermore, its price may benefit from decline in SG interest rate.

Also recently sold index fund holding (Infinity Global Stock Index C SGD), bought using CPF-OA, a few years ago. The monies have not returned to CPF-OA yet.

On US Fed Rates

Current Fed rate is 525-500. Based on CME Fedwatch, Fed rate may decline by 1% at end of the year. I am not certain if Fed rate will decline by this extent. To be conservative, I assume 0.5% cut by end of the year and probably another 0.5% cut by mid-2025.

Source: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html