September 2018 Dividend Collected

Dividend Collected for 2018

Dividend payout for the month of September 2018

• MAPLETREE LOG TR
• FAR EAST HTRUST
• CAPITAR CHINA TR
• AIMSAMP CAP REIT

Dividend Collected to Date

Average Monthly Dividend (YTD): $1,463
Target Total Dividend for 2018: $16,000

In my previous post, I have compared my portfolio to the Morningstar® Singapore Yield Focus Index and both portfolios show similarities of having a significant portion allocated to REITs. REIT is an essential sector for those income focused portfolios as it provides a consistent stream of dividend income. Given the rising interest rates environment, there are some concerns on whether REITs are due for a big correction. The fear is not without reasons.

As the economy grows, consumers purchase more asset and hold less money. This will lead to raising inflation and the Fed has to step in to increase interest rates as a cooling measure to curb inflation. When interest rate rises, asset price (not only REITs) falls as money moves to the lower risk and higher interest bonds. When the Fed suggested 4 rate hikes for the year of 2018, there was already a correction in the FTSE ST REITs Index which started in Feb, and reached a low in June. The Index has since rebounded slightly.


There are investors who are starting to rotate out of REITs into other sectors, but there are also investors who think that the macroeconomics conditions have already being factored into the prices. In such an environment, REITs could also possibly outperform STI. A REITs correction will go hand in hand with a STI correction. How much the interest rates will raise further and the speed of increase will affect how the market reacts. I do not know how REITs will turn out in the near future so I will not speculate.

In one of PhillipCapital analyst's reports, the recommendation is that REITs with low gearing and high proportion of debt on fixed interest rates will be able to better withstand the raising interest rates. Overall, my REITs allocation are within the acceptable risk, except for Far East Hospitality Trust. I will not be rotating out of REITs to other sectors but will be looking to accumulate assets which are less sensitive to rising interest rates such as banks (higher NIM) and consumer staples (all-weather). The following table is for your own reference. 

Source: PHILLIP SECURITIES RESEARCH (SINGAPORE) (Full Report)

"Those Warriors who made it became Lords, and the tales told by the Lords are always inspiring and motivating as dead Warriors tell no tales. This is a teaching of survivorship bias from a Monk."

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