Comfort Delgro price rally

 

I have been holding Comfort Delgro for the longest time since the GFC. After the price crashed in 2022 and 2023, I have been accumulating more since I find it easier to buy good shares when their price is below my original buying price. This is sunk cost fallacy at work, and I freely admit that I'm susceptible to it. 😊

When it comes to reasons to buy Comfort Delgro, there seemed to be quite a few. The EPS crash during COVID was terrible but there was nothing preventing it from recovering to pre-COVID levels, in which case CDG would be seriously undervalued. The company generates steady cashflow in an industry where the Capex is not too high (compared to say Telcos). The barriers to entry come from the regulatory environment where the company has to bid for contracts to operate transport routes. Grab/Uber was no doubt a disruptor but the threat is receding as there is only so much cash Grab can burn before investors start insisting that they make a profit.

As you can see from the chart, there was a major crash in June 2023 where I think the price touched $1.00 briefly. So in June 2024, the 1 year performance of C52 will shoot up to the 40%++ region. Which is an illustration of how to 'cherry-pick' time periods to present a more favourable return.

Next recovery I am waiting for is Singtel. The rumours that they are planning to sell Optus have pushed up the price in recent weeks.

SIA 3.03% bonds redeemed!

 

In 2019, I subscribed to $85k of SIA 5-year bonds. Last week, SIA redeemed the bonds and I got all my money back.  

In 2020 after COVID struck and I was running out of cash to invest, I sold about half of bonds at slightly above $1 to fund more stock purchases.  

So at the end of the day, the bonds did their job which was to preserve wealth and provide a source of liquidity to buy stocks. 

Unfortunately, the market for retail bonds have dried up. Temasek is no longer issuing Astrea PE bonds as well. On the flipside, T-bill and cash management account rates are pretty decent. As I'm not very sure what to do with $45k, I will park it in the FSMOne cash management account to earn 3%+ for the time being.

Collecting passive income means that you have lots of cash entering your bank accounts every month, so you have to be prepared to spend a little bit of time doing cash management. Its not that hard as all you need to do is to park them in T-bills or in 3%+ cash management accounts like FSMOne. 

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Original Post: BuyafterCrash: SIA 5 yr 3.03% bonds

Dividends Collected: March 2024

 

My forecast is for a slower dividend increase of about 15% this year, because I have put more of my fresh funds into fixed income like T-bills, which don't yield as much as equities. Based on 1Q24, it looks like I am on track to achieve this.

1Q24 Finally caught up with Vanguard World

 

The first quarter of 2024 is basically over and my IBKR portfolio has finally caught up with Vanguard World. Whether I will be able to overtake VT is an interesting question. I failed to do so in the last 2 years, but maybe third times a charm. 

We are looking good for a 10% return at the end of the year, which would provide a nice boost to my retirement savings. 

Why I still like FSMOne (2024 edition)

 

Internet forums have remarked on the appearance of new financial youtubers (labelled cleverly by someone as influenzas) who seem to be pushing affiliate links and trying to get people to sign up to one of the new broker-custodians. This may give the new investor the impression that these new brokers are the only game in town when there are actually some pretty good local platforms.

As I was reviewing my FSMOne account holdings and editing some RSP orders, this was a good opportunity to record my 2024 thoughts on FSMOne. I admit that when they imposed platform fees, I thought that they were goners, as the need for platform fees suggested that they had some inefficient cost structure whereas platforms like Poems were able to manage fine without platform fees.

Product Availability

When I talk about product availability, I am talking in terms of products that I find worth investing in. In 2024, the product offering is pretty good but not perfect:

• HKSE ETFs
• US ETFs
• LSE ETFs (GBP only) 26/3 Edit: USD ETFs now available
• Low cost unit trusts
• Bonds

ETF RSP Fees

FSMOne has been offering 0% commission RSP on selected HKSE, US, and SG ETFs for several years. Here's my invoice from a recent $900 RSP into a HK ETF. The fees were HKD 5.93. So this is really a great deal. More significantly, investors can choose 1 of 4 days every month for the RSP transaction. Previously, all the orders were done on the 8th of the month. For less liquid ETFs, it seems that FSMOne's market order results in a price spike - since everyone "knew" that FSMOne was going to place a market order on the 8th, it was easy to front run the order. Spreading the RSP volume across 4 different days helps.  

26/3 Edit

USD ETFs listed on LSE are available but not part of the 0% RSP Promotion.

No unit trust platform fees for Diamond Tier

 

When you reach Diamond tier at 500k, there are no more platform fees for unit trusts! You can reach Diamond tier by placing cash in their 3%+ cash management account and via the AUM of your ETFs and SG shares (for which they are no platform fees)

If you are buying only low expense ratio unit trusts, it actually means that FSMOne Diamond might actually be 'cheaper' than Endowus because the Endowus 'rebate' is minimal for low-cost funds but you still have to pay the Endowus platform fee. At time of writing, Endowus platform fee is 0.5% for $200k-$1m AUM.

Finally, since the webpage says no platform fee for unit trust for Diamond, this implies that the platform fee for bond is still applicable, so no free lunch for bonds.

 

Vanguard's Ireland domiciled Vanguard Global and Vanguard US 500 funds are pretty reasonable with ongoing charges of 0.18% and 0.10% respectively. The minimum initial investment is US$1,000. I am planning to buy some instead of holding all my Vanguard World in Interactive Brokers. Note - you have to fill in an accredited investor declaration before buying.

Auto-sweep accounts of US$ and S$

The yield for the US$ and S$ auto-sweep accounts (i.e. cash management accounts) are 4.7% and 3.2% at time of writing. Pretty decent place to park some spare cash compared to the pitiful interest rates in Standard Chartered- I use SCB trading a lot so I have a 'float' of US$/S$ that is earning hardly any interest. (Note: cash management accounts are not SDC protected).

Conclusion: Will be increasing my holdings in FSMOne

FSMOne is a pretty good platform. One is always worried that FSMOne may revise its pricing structure but so far, the 0% comms ETF RSP has been around for a long time and so has the platform fee waiver for Diamond tier. If these remain, FSMOne is a great choice as a broker-custodian. 

IWDA 'progress report'

 

Last month, I talked about the onward march of the US market and even wondered if IWDA would hit $100. Since then, the market has continued to march upwards. I really need a lot of discipline to continue to DCA with these sorts of prices. 

While I always on the lookout for bargains in non-US markets, I am not so confident that a China market rally is a guaranteed thing. The problem is that so many 'experts' are predicting that the China market will rally, probably the same experts the predicted a recession in 2023. When a lot of people expect something to happen, it might not happen.

However, having said that, I think the China market will be green this year, but it will be a 'weak' green rather than the massive rally that many are claiming to predict. 

Dividends Collected: Feb 2024

 

STI ETF paid dividends this month.