The SRS Fund May 2024 Update

No sale in May

Investors did not go away this May, and the economies in Singapore and the United States kept on humming. Listed companies generally reported good solid earnings providing the foundation for the stock market to reach new highs.

Some highlights in the results of companies in the SRS Funds were SATS and Jumbo. Both were bought on the thesis of the revenge travel boom and boy they deliver. For SATS, it returned to profitability and paid dividends for the first time after Covid 19. Jumbo did even better by delivering a 31.8% in earnings to its shareholders.

A new investment into Powermatic Data during May. Powermatic has a small market cap of just above $100m with its business providing wireless solutions to multinational companies. My thesis on the investment is based on the strength of its improving wireless business, exceptional balance sheet and most importantly the willingness to return value to shareholders by developing and then selling its freehold industrial building. I expect the thesis to play out nicely over the next 2 to 3 years.

The SRS Fund ended May at record value as dividends from investees company pour in and the fund generally kept pace with the STI index which is up 3.8% YTD.

Portfolio Segments

The SRS Fund is heavily weighted towards the banking sector due to my optimism about their prospect, especially in South East Asia. Finance will continue to be a major segment of the SRS Fund. With the inclusion of Powermatic, the manufacturing segment increased to 5.8% of the SRS fund providing further diversification.

Dividends

$7,766 worth of dividends were received in Q2 already surpassing the previous year with June still to come. Hence dividends will again likely be the single most important driver contributing to the growth of the SRS Fund for the year.

SRS Fund Value

The SRS Fund value hit a new high of $392,551.71. With this on going pace, pending any big drawdown, the SRS Fund will likely cross the $400k mark by the end of the year.

Cash Levels

I would be more comfortable if the cash level was much higher than the current 2%. Legacy holdings of REITS like Capita India Trust and Mapletree Pan Asia Commercial Trust will be disposed of if the price is right. Nevertheless, I am not too concern at the current level of cash as future dividend collections will allow the SRS Fund to continue to diversify and turn it into a truly all weathered fund.

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