The SRS Fund Mar 2024 Update

The SRS Fund Since Inception

The SRS fund was created in 2008 when I made my first contribution to the SRS for tax-saving purposes.  Little did I imagine that it kickstarted a journey into making this fund the main vehicle for my retirement planning.

It was during the depth of the financial crisis that I felt was a good time to pick up some investments and at the same time save some taxes.

I made a full contribution (max allowed) of $11,475 into the SRS.

Since then yearly contributions were made and the SRS Fund grew and compounded for the next 15 years. While a CAGR of 7.1% is nothing to shout about, I am pleasantly surprised to find out that none of the locally available Singapore focus funds got close to this return.  

Most funds’ returns range in the 3% – 4% region matching very closely to its benchmark the STI Index over a 10-year period.

If one is to assume a yearly 1% depreciation of the US$ against SGD$ then the SRS Fund’s return is just off the long-term return of the S&P 500 of 9%.  This is assuming there would be withholding tax on dividends and indexing costs.

Hence it gives me great comfort that the SRS Fund is getting a fair share of the market returns and gives me a perspective that it is heading in the right direction.

The SRS Fund ended Mar down 1.9% as banking stocks led the recovery with the market anticipating fewer rate cuts from the Federal Reserves.  A couple of banks including UOB and Standard Charter Bank started to cut their interest on salary-contributing accounts. This may be the beginning of banks lowering their cost of funding in anticipation of rate cuts.

Companies that did well during the month also include Venture in manufacturing and Keppel in alternative investments. Other portfolio companies’ share prices remain weak with little news flow during the period.

Portfolio Segments

Segments in the SRS Fund remain unchanged with the finance sector making the bulk of it. The property segment will be reduced in April as I have fully divested Capland Ascendas REIT.

Dividends

Dividends in Q1 totalled $2,076.77 down YoY as the portfolio mixed shifted from REITs to the many companies holding AGM in Q2.

SRS Fund Value

The SRS Fund improved month on month at $373,606.36 with banks recovering within the portfolio. The SRS Fund value should be given a boost in Q2 with year-end final dividends paid out by the many companies within the fund.

Cash Levels

The cash level remains at a record low level due to lower dividends received during the period.

---