Sunday, March 17, 2019
Dividend Warrior Feb 2019 Portfolio Quick Update - Minor Tweaks
Did a little re-balancing in February. Took small profits on Raffles Medical, NetLink Trust and Propnex. The funds were re-invested in Frasers Property Ltd. (FPL). This property developer is like a quasi REIT ETF, holding significant stakes in 4 S-REITs (FCT, FLT, FCOT & FHT), thus enjoys a strong level of recurring income. Furthermore, FPL has a healthy pipeline of potential quality assets to inject into these S-REITs. Lastly, there is no need to fear future cooling measures from the authorities since FPL has low exposure to Singapore's residential property market.
A good friend of mine has warned me repeatedly since 2017 that my portfolio is over-exposed to REITs. He is right. I am an open-minded investor who takes constructive criticisms seriously. Moving forward, I am looking to add one or two non-REIT positions. BIG positions. Time to clear the dust off my photon cannon. $50k available for deployment. This round of investment should push my portfolio value over half a million $SGD.
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Have you not considered Capitaland? It's recent acquisition of Ascendas will add more REITs into recurring income. But having said that, in terms of sector, if you're moving from REITs to FPL, isn't it still in Real Estate sector?
what do you make of FPL's high debt to equity ratio?
Yup, CapitaLand is another solid choice for a quasi REIT ETF as it has stakes in quality REITs like CMT, CCT & CRCT. On my watchlist for now. I would prefer to see how they 'digest' Ascendas's assets over the next 2 quarters before making my move.
Yes, FPL is still in the property sector, that's why my next big addition is not going to be in the real estate industry at all. Sector diversification is important.
Hey DW, am also pretty heavily invested in reits myself (probably 90%) of my portfolio. I also note the significant increases in the paper profits since January (as highlighted by your post in feb). I was just wondering:
1) what are your decision points in taking the profits in certain reits to reinvest in others (i.e is there a percentage capital gain you're looking out for? Or that maybe the Price to book ratio increased for example)
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