Singapore Reits is something that many Singaporeans understand and take heart to. Some folks actually build their income/passive income via this source and I can see why.
My take on Reits on SGX
a. First it is based in Singapore – There is this local bias that it can do well given most people like to see for themselves if the malls are working out well in terms of retail quality, crowd, spending and how many shops are still in business.
b. SGD payouts avoids the currency risks. For a retiree or someone drawing on income from dividends, this payouts serve as a source of bill payment.
c. An alternative and cheaper way to enter the real estate market in Singapore is really through the reits/stock exchange. I know that people will argue that it is different but technically in my view, it is the same (And you do not need to pay stamp duties, get a mortgage and pay sales charges)
d. It is more liquid than real estate.
For a long time now, Reits have been growing big and popular within the investing community. Again, all investments comes with risks – Most people have more comfort in dealing with things they can see or get a sense of. For a long time, there have been plenty of wins for reits but as you can also see, the Circuit Breaker period in April through May have affected them in a way or another.
So again diversification is key to investing once more. If you put all your eggs into the Reits for passive income, then with such dividend cuts your bottom line is definitely affected. Currently, it doesn’t seem like this Covid situation is going back down or slow down whatsoever so dividend cuts is going to be prolonged in order to save businesses and jobs. Then again, there are certain sectors who might see a booming business such as Data Centres or even certain suburban reits. Sub-urban malls are definitely crowded but the former shopping aisles in orchard and high end malls are definitely missing the tourist crowd which rakes in the cash and spending. It is no wonder why people are worried about their livelihoods.
It is not all doom and gloom. Sectors will emerge while some will recover. It is definitely time to pick up some if you did not have any. The idea is to really have a long-term goals when you pick a stock and stay disciplined. Once you sell it off, you may never be able to pick back the company at their valuations again.
The Passive or Lazy Choice
If you are lazy, let Robo-advisors do the trick for you. For e.g. Syfe. https://www.syfe.com/ Initially i only took on the Reit+ portfolio some time in April 2020 to test it out so that I do not need to manage the portfolio and incur those trading fees. They have expanded other products such as a Global ARI portfolio (Long term investment into equity,bonds and commodities) and Equity100 portfolio which is 100% into global Equity ETF (US and UK listed ETFs)
Syfe has invented their ARI (Automated Risk Investing) methodology, which is a risk-based rebalancing strategy, which changes the allocations of your portfolio according to changes in risks in the market in order to limit your losses. In short, once it triggers a certain level, the system will trigger an alert and things start to sell off to re-allocate. It also means that over the longer term, you will naturally see a better performance of the portfolio.
Every rebalancing of course depends on what portfolio you choose from so everyone is different. I personally like the idea of investing into a portfolio of reits instead of picking it on my own. In terms of fees, it depends on your investment amount with them.
In terms of pricing, I think it is cost effective. Do find out more about it here https://www.syfe.com/pricing
a. Management fee per year is at 0.65% p.a. for investment amounts S$0 – S$20k.
b. Management fee per year is at 0.50% p.a. for investment amounts S$20k – S$100k.
c. Management fee per year is at 0.40% p.a. for investment amounts S$100k and above.
Do use my referral code to get some benefits when you sign up a new account with Syfe. Referral Code: SRPTSMQ5J
You will get (Find our more about their referral scheme here https://www.syfe.com/magazine/how-can-i-invite-a-friend-to-join-syfe/) :
a. S$10 bonus if you invest S$500
b. S$50 bonus if you invest S$10,000
c. S$100 bonus if you invest S$20,000
This is not a sponsored post. This is purely my own opinion after using their service and/or products. If you like what you are seeing, do remember to check they out and do your diligence. There is no one size fits all investment strategy.
If you like what I am sharing or if it resonates with you, do use my referral codes here at https://atomic-temporary-178675883.wpcomstaging.com/contact/ for the services.
The pictures were taken from Syfe website for this article.