May 20, 2024

Cory Diary : Equity Portfolio Review

Equity Portoflio - 2024-0519

In this review, I'll provide a brief commentary on each counter.


There are 9 REITs in the portfolio after selling off United Hampshire. Ascott Trust yields look quite interesting. If there is a correction, there may be consideration to add a little more. This is despite strong bank yields, planning for necessary transition options.

Sabana Trust is in a more complicated situation as its share price could go either way due to ongoing internalization complexity. With current cash conservation needs, it seems a luxury to have exposure to this in my portfolio at this time. It poses elevated volatility risk. The pro is the strength of the REIT, which may mitigate some risk, but it's uncertain how much it can help.

Elite Commercial REIT is in a deep drawdown due to the ongoing UK macro situation. As the position is not significant in the portfolio and the REIT has mainly government tenants, I do not plan to relinquish the opportunity of a rebound if any. Currently, they aren't in distress and are well-capitalized from a recent rights issue. However, we can't say with absolute certainty there is no risk or surprise from what we don't know.

Mapletree Logistics Trust has recently been hit due to China exposure in their valuation and negative rental reversion reflected in it. Despite this, the REIT has managed the issue well. With management actions on how they position the REIT, it seems investors may take some comfort. Nevertheless, as an earlier article mentioned, asset sales to support income distribution are a fight against the Fed. They likely will pull through well. Planning for China macro-wise is much harder due to ongoing tensions between the powers. Technically, if we use MA 50/150, the chart has yet to reverse to an uptrend, so I will continue to monitor.

IREIT positions in the portfolio have been sized much smaller in proportion despite being popular among investors in foreign REITs. They have all the ingredients to be successful. This was the case before the interest rate spike and the Ukraine War. Unlike UK REIT, they are fortunate to have locked in their loans until 2026. Like most foreign loan exposures, the high rate spike and poor sector segment hit them hard.

Core Reits

There are currently 4 core REITs in the portfolio: AIMS APAC REIT, Ascendas REIT, Mapletree Industrial REIT, and FCT. They all have significant exposure to the local economy, which shields them quite well. Ascendas and Mapletree benefit from lower loan rates as well. Their well-managed hedging and fixed loans help keep their DPU stable.

AIMS APAC REIT used relatively expensive perpetuals before the rate spike, which tied them over well for the past years. With the perpetuals scheduled to expire, it may face much higher costs for their loan or perpetual rollover. Being a small REIT, I decided to reduce the position by roughly 40%+ to reduce portfolio volatility from top REIT allocation to the last of the core REITs. FCT is strong in suburban malls. They too face daunting loan costs over time. Nevertheless, it has a strong business, and I am happy to hold it through its current allocation.

US Stocks

Amazon, Microsoft, and Tesla roughly make up 3% each. They are all strong in their respective markets with world-leading businesses. Currently, they hold less than 9% of the portfolio in total. If opportunities arise, there may be consideration to expand in this segment. I am quite comfortable with what I currently have. Microsoft and Amazon are expected to provide a strong base support that will keep this group steady. Tesla is quite volatile but can have explosive upside if they execute their developing projects well. The hope is not to further inject fresh funds into US stocks unless there is a good rationale. The main reason is I already hit my 50s and view cash flow from dividend stocks as a key priority.


DBS and OCBC have outsized allocations in the current portfolio. UOB, which had a small allocation, was sold just before results. As mentioned earlier, they are a hedge against REITs due to high rates impacting them. So far, they have nicely filled the capital loss gap on the REIT side well—too well, as high rates continue to prolong. There is temptation to inject more funds into them due to the high yield they can provide over the REITs. What's more, they have a good business environment. Unfortunately, this could put the portfolio at higher exposure risk to one segment. Not my time.

Non-Bank Local Stocks

Venture, Sheng Siong, and Netlink NBN Trust. Venture is a test with a very small allocation. There hasn't been much investigation into it, whereas Netlink and Sheng Siong are more familiar. Both latter stocks are sized to support the portfolio if the economy goes into distress. There is no motivation to expand their allocation further.

The latest report from Netlink is within expectations but also reminded me there aren't catalysts out there yet that can mitigate their direction long term on cash flow. This can grow into a problem if not managed carefully. Sheng Siong is boring but awesome as usual. They have a lower yield; however, there are opportunities.

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.

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