After Pressing for SSB 2.71%, is Astrea worth a Look?

Like everyone else and their second aunt, I applied for this month's SSB with a 10-year average interest rate of 2.71%. I expect to be allocated about $15k. Next month's interest rate is expected to be even higher... and the allocation even lower, so if you need to accumulate SSBs, this is a good time to start.

Given the limited supply of SSBs whenever interest rates are 'good', I have decided to start accumulating a bit more Astrea V and Astrea VI. 

Astrea V's first call is 2024  while Astrea's VI first call is 2026. The low "interest" payments the fund has to make 3.85%/3.00% are relatively undemanding which reduces the risk that there will not be enough cash flow to pay the class A-1 bonds. As V and VI have been on the market for some time, they have already built up their reserves account. Coupled with the short time to first call date, these look safe enough to buy more and hold to maturity (safer than say, a BBB investment grade corporate)

But like I said from the start, first priority is to buy SSB. If I don't get my target SSB amount, excess can be used to buy Astrea V and VI.

Update: Received $18,000 allocation for SSB, more than expected, which is a pleasant surprise.

Strategy: June 2022

 While this week is likely to end slightly lower, I remain optimistic that we will end the year at a higher level. Therefore, my strategy is to continue to DCA in June. 

As mentioned earlier, I had £10k+  from my Aviva return of capital and I have been using it to buy more Aviva despite the fact that it rallied almost 10% from last month. 

The Aviva vs Prudential question is an interesting one. My Prudential holding is much smaller than my Aviva holding. I confess that I have been attracted to Aviva because of its higher dividend payout ratio. Prudential's dividend yield is currently much lower so maybe I made a good choice. Aviva's share price also seemed to be holding up much better (maybe investors that buy Aviva to collect dividends are 'buy and hold investors?)

Comparative charts are a bit tricky because of various corporate actions. Aviva returned capital and sometime back, Prudential issued shares from a spinoff. But here's a 1 year chart anyway. As you can see, Aviva was doing ok but suddenly fell off a cliff (either that or it has something to do with the return of capital).

Given the not so fantastic dividend, I will probably need a bigger discount to persuade me to buy more Prudential. For the record, in terms of UK insurance stocks, my 2nd largest holding is the Motley Fool favourite Legal & General which many have not heard of but currently has higher market cap than Aviva. This stock has been doing very well but I am not sure how much more upside it has. Still, I may pick up more if the price is right.

Moving to the advertising/media sector, I bought WPP. Is this 'old media' like SPH and therefore a sinking ship that I shouldn't board?  The cashflow/Revenue/Income statements seem to suggest that it is still viable so to cut a long story short, I'm adding to a tiny position that I had. I am punting with this one and maybe it will help me learn how to press the 'sell' button. 

Dividends Collected: May 2022

 

May is traditionally a good month for dividends. I only included Aviva's dividends and did not include the return of capital.

Mid-year Portfolio Review

 

I review my portfolio twice a year. I am on track with my New Year's resolution to buy more world ETF as VWRD/IWDA is a brand new entry in the Large category.

Sembcorp is a new entry or should I say 're-entry' thanks to the recent rally together with my preferred S&P500 ETF, LSPU.

I am hopeful that the market will end the year higher than current levels, in which case, this list should see a few more new entries. 

Aviva fell out of the large category due to the return of capital which I overlooked otherwise I would have accumulated more when it was under £4. 

SembMarine 43.5% rise in 3 months?

 

I had previously subscribed to $10k+ worth of Sembmarine Rights issues at $0.08.  However, when I last looked at the price in March 2022, it was still stuck at around 8 cents. While I was doing my mid-year portfolio review (update soon), I realised that Sembmarine has shot up briefly to $0.13 last month but is now hovering at $0.115 which would be a 43.5% gain from the March 2022 price, translating to a low 5-digit gain. This would presumably have something to do with a possible Keppel merger.

As I had no real intention to buy and hold this counter, I plan to unload as least half of my SMM at $0.12. The rest, maybe try my luck and wait for a Keppel buyout?