Tuesday, July 7, 2020

Dividend Warrior's 1H2020 Portfolio Update - Road To A Slow Recovery

Top 10 Positions as of 30 Jun 2020


Portfolio Cost: S$488, 490
Portfolio Market Value: S$ 606, 435
Portfolio Overall Unrealized Profit: S$117, 945 (+24.1%)
Portfolio YTD Returns: -1.75%
Dividends Collected (1H2020): S$12, 885
Current Warchest: S$52, 457

(*All figures are accurate as of 30 Jun 2020)

Portfolio Actions in 2Q2020:

  • Accumulated 200 shares of UOB at $20.76

Well-Prepared To Ride Out The Storm 
Like most businesses all over the world, banks faced serious COVID-19 headwinds during the first half of 2020 and would probably continue to do so in the coming quarters. Earnings projections should be lowered in 2020-2021 due to reduced NIM and negative loan growth. Overall business sentiment is expected to be poor for the rest of 2020. The saving grace would be the private wealth segment. I re-invested my dividends by accumulating UOB at $20.76, which is below its NAV of $22.32. UOB enjoys a larger revenue exposure to the ASEAN region compared to DBS and OCBC. Besides, I am happy with my current allocation on DBS and OCBC, so I decided to boost my long-term UOB position.  Investing in a quality company at a fair price is better than investing in an average company at an attractive price. Even if UOB cuts its FY2020 dividend payout from $1.30 per share to $1 per share, the yield is still fair in the current zero-rate environment. 

I know, I know..... it all seems kinda bland. Income investors in Singapore are not blessed with many solid dividend stocks. 'Banks + Blue-chip REITs' is pretty much the go-to formula, the 'bread-and-butter' combination. If it ain't broken, don't fix it. There is no need to constantly re-invent the wheel. I would rather stay within my circle of competence.

There is an increased probability that the local banks might re-activate their SCRIP dividend scheme in order to build up cash reserves for tougher times ahead. If that happens, I am more than happy to subscribe to new discounted bank shares. 

So, what did I do after Singapore's Phase 2 re-opening of the economy? Satisfy my hotpot craving of course! ^^

If you want to see the sunshine, you have to weather the storm
Dividend Warrior

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