The SRS Fund Jun 2025

The Return of the REITs

Cash savers will know that it is increasingly difficult to get a decently high interest rate in the mid of 2025. It was not long ago that yields on T-bills and high savings accounts, etc, were giving out in excess of 3% in returns.

Now, the window of high interest rates is closing, with banks adjusting their interest rate downwards every other month. The 3-month SGD Sibor has dropped 100 basis points in this year alone, hovering at just 2%.

With all safe return yields dwindling, the next alternative points to REITs. The iEdge S-REIT ETF at 6% yield means a risk premium of 4% over cash cash-like return. I believe this, together with the reduced debt cost REITs will improve the fundamentals of all REITs going forward.

SRS Fund REITs Positioning

The SRS Fund took this opportunity to position the increasingly bright REITs narrative. I invested 5.3% of the fund into Capitaland Invest with the thesis of improving REITs and property fundamentals due to lower interest rates.

Together with MPACT and Capland India Trust, which had seen their recent price rebound, the SRS Fund’s exposure to REITs is now more than 15% of the portfolio.

Half Million Mark Again

In line with the STI rebound from the April low, the SRS Fund again hit the half-million milestone. Bearing unforeseen circumstances, the SRS Fund should begin its march past this significant signpost at year’s end with the world economy in healthy shape.

Portfolio Segments

The property segment grew to 18.5% with our investment in Capitaland Invest. Otherwise, the SRS Fund is still heavy in the finance sector with the 3 local banks making a bit less than half of the fund.

Dividends

Dividend closed at $11,504.53 for Q2 of 2025. This is the highest level received since the SRS Fund’s inception and truly shows the effect of compounding over the long term.

SRS Fund Value

While not at its historical high, the SRS Fund again surpassed the half-million level and hopefully continues to reach new heights as our businesses prosper from a vibrant Southeast Asia economy.

Cash Levels

With more funds deployed due to the positioning of a REIT’s recovery, the cash level dropped to a mere 2.8%. Hopefully, with more dividend payouts, the cash level can replenish quickly during Q3.

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