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April Portfolio Review

In April, we have seen many countries announced monetary and fiscal stimulus packages to support the economy during the critical period of Covid-19. Singapore government has announced three rounds of relief packages, with a total amount of $65 billion. We have seen more and more good news coming up, China has announced "back to school" last week and life starts to go back to normal, of course, precautions are still required to be in place. The daily Covid-19 cases in some countries like Hong Kong and New Zealand have dropped to single-digit and even zero in some of the days. Singapore government is looking to start relaxing the Circuit Breaker rules in the coming weeks once the number of community cases starts to stabilise.

The global stock markets rebounded last month. The Straits Times Index (STI) has recovered by 5.7%. Year-till-date, the STI still incurred a total loss of 18%. Most of the index component stocks took a double-digit hit in the four months of 2020.

Not surprisingly, our REIT portfolio was down by 9.5% year-till-date. The advanced strategy with leveraging was down by 19%. Fortunately, our REIT picks still manage to outperform the STI by 7%. Last month, we almost recovered half of our portfolio drawdown in the first three months. In our Premium Newsletter last month, our portfolio rebalancing strategy has suggested us to increase our positions in various holdings, which helped us to profit from the recovery in April.

Dividend wise, we did not receive any dividends in April. YTD dividends remained at $2.2k. The annualised dividend yield of the portfolio was about 6.8%!

One thing to take note is our portfolio gearing went up to 1.95 times after adding more positions last month.

The stock market is expected to be volatile in the next few months. With the easing of regulation by MAS, we believe that Singapore REITs will go through this difficult period. However, there are likely to be more DPU cut in the coming quarters as the distributable income will be preserved to help the REITs as well as its tenants to go through this critical period.

Nonetheless, we still believe that this provides a good opportunity for long term investors to pick deep value stocks with good dividends.

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