The SRS Fund Aug 2023 Update

Topping Up to the SRS Fund
In 2022 I made a decision to cease contribution to the SRS Fund in order to avoid paying any taxes upon withdrawal. I was wrong and short sighted for that matter. The true test I should have asked is whether the amount of tax saved is more than the tax upon withdrawal? As this is an important topic by itself, I will address this matter in a separate blog post. In short yes I have decided to continue with SRS Fund contributions.

As the full amount of $15,300 was contributed in the month of Aug, I have took this into consideration in the calculation of year to date %. Assuming the contribution did not take place, the SRS Fund is up 6.08% for the year. This result outperformed the STI by 6.6% by end Aug.

Another REIT was dispose during the month as I took advantage by selling CICT to Mr Market @ $2.06. I subsequently use the proceeds plus new funds to acquire more of UOB @ $27.80 and first foray into Jumbo @ $0.29 a food & beverage business. There was also some month end purchase of Venture Corp @ $12.68 which was not reflected in this month statement.

All in all Aug was a busy month for the fund as the repositioning of the SRS Fund into an all weather portfolio continues. I have my eyes on a couple of businesses namely Boustead, Raffles Medical, Shen Siong and Thai Bev all of which I will be happy to acquire at the right price.

Portfolio Segments

Investors are able to see a growing service segment as I continue to diversify the SRS Funds. While the finance segment continue to be large, I will look for opportunity to trim it and moving the funds into services.

Dividend

Dividend received at the end of Aug stood at $4338.56 and will be on course to another record 3rd quarter versus 2022. This is despite some of the portfolio companies temporarily stop paying dividend like Yanlord or REITs having their DPU impacted by rising interest rates. Strong dividend growth driven by local banks continue to provide stable income growth for the SRS Fund.

SRS Fund Value

The SRS Fund grew to $377,808.78 with the new contributions to SRS of $15,300. In Aug the market took a breath from its July high and businesses were generally priced lowered. I expect the fund value to remain at current levels to the end of the year as continue strong earnings from local banks will hold up the portfolio.

Cash Level

Cash level is at its lowest since 2019 as Covid reopening theme continue to drive earnings growth. With the recovery in the price of oil, Seatrium will try to make the leap into profitability sooner rather than later. The service sector is expected to do well with the opening up of tourism driven by pent up demand and the opening up of tour group from China.