The SRS Fund Apr 2024 Update

The Higher for Longer Theme

Into the 2nd quarter of the year, the market realised that inflation may not be falling after all. The stock market for one is heating up as earnings from major corporations over the world showed strong growth.

April was also a month full of annual general meetings. I have personally attended meetings of DBS, UOB, Capland India and HR Net. My main takeaway from these meetings is that the Singapore economy together with regional South East Asia will be a bright spot for the year.

With higher interest rates for longer, the local banks are benefitting from high net interest margins as well as non-interest income. The rise in the valuation of the local banks enables them to constitute almost half of the Straits Times Index

With such a huge weighting on the STI, it will likely be much more difficult for the SRS Fund to outperform as it begins to underweight the 3 local banks on a relative basis.

The SRS Fund ended Apr at its all-time high up 0.35% YTD as dividends from investees began their contributions. Strong performance by the 3 local banks also contributed, taking the SRS Fund into positive territory for the year.

Portfolio Segments

Finance will likely continue to play an important driver of the SRS Funds with Singapore being at the heart of the emerging Southeast Asia economy. I will continue to look for more diversification opportunities as the SRS Fund evolve into an all-weather Fund.

Dividends

Dividends continue to trickle in for April with $1080.00. The SRS Fund would expect the record dividend to be received in May as companies approve them during their AGMs.

SRS Fund Value

The SRS Fund hit a historical high of $382,183.32 and is expected to continue its upward trajectory given the heating stock market in May.

Cash Levels

The cash level is expected to increase as dividends begin to contribute in May. Cash level may also see a spike if the Fund can continue divesting its REITs holdings.

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