I have a large position in First State Regional China using CPFIS since the GFC. In 2008, there were not many options for CPFIS. Most of my money went to STI ETF but since I wanted to diversify, unit trusts with FSMOne seemed to be the only option. Due to inertia and the fact that I can't use my CPF for anything else, I have left it there. As long as it returned more than CPF interest, I guess I am content.
However, as I have reached the 50 year milestone, CPF is looking more like 'real money' that has to be managed properly. I am looking at an 80/20 allocation of equities/fixed income-near cash and CPF at age 50 is pretty close to cash, maybe equivalent to a 5-year fixed deposit?
At the end of the day, Martin Lau, the famous fund manager for First State, is not getting any younger and its inevitable that someone will have to replace him. Given the 1.73% expense ratio of the fund, it's time to take steps to exit. Should have done it earlier, but better late than never.
This means that I will sell the fund and the cash is refunded into CPF-OA, while I use my cash to buy a China focused ETF to replace it. I told Claude.AI what I was holding, including another existing dividend ETF 3110 and asked it about 3070 and to generate various comparison tables and analyse their holdings. Given that 3070 and 3110 most interestingly do not duplicate each other (their top 10 holdings are totally different), Claude concluded that they are complementary.
While 3070 has a slightly higher expense ratio of 0.77% compared to 3110's 0.68%, its manageable and 3070 holds the Chinese Banks whereas 3110 seems to be focused on industrials, and I am always a fan of financials (even though China banks may be called upon to do national service by bailing on State Owned Enterprises). The infographic above shows the reasonable P/E (the 'SOE effect'?) but more importantly the totally reasonable dividend payout ratio which implies that dividends will be sustainable.
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