Sunday, 20 December 2015

A mock S-REIT portfolio

If I were to construct a high-yield REITs portfolio of 10 stocks (prices were taken from Nov15 as I drew this last month), this is how it would look like:


Market $ Entry $ Div yield% Shares P/B EV/EBIT Amount invested
S-REITS
Ascendas Hosp Trust 0.625 8.20 4800 0.7 26.7 $3,000
First Reit - health 1.19 7.00 2600 1.1 20.1 $3,094
CDL hosp 1.32 7.20 2300 0.8 15.6 $3,036
Ascott hosp 1.2 7.10 2500 0.7 28.8 $3,000
Mapletree logistics 1.005 7.30 2800 0.8 18.5 $2,814
Lippomall 0.305 10.20 10000 0.5 10.8 $3,050
Starhill global 0.765 6.80 3000 0.8 19.3 $2,295
Frasers Centrepoint 1.89 6.10 1600 1 20.3 $3,024
Ireit 0.685 7.60 4000 0.896 $2,740
CapitaRetailChina 1.335 6.90 3000 0.8 16.9 $4,005
0.998333 7.44 $30,058

This basket would give an average yield of 7.44% with an average price of $1 per share. I steered away from industrial reits because they weren't performing well. Each REIT is allocated about the same weightage in the portfolio. I cut down slightly on Ireit shares due to its very concentrated tenants portfolio (risk) but included it in this basket due to its unique exposure in the Europe market. I am currently vested in Capitaretail China.

Target entry prices are deliberately left blank because I want to observe how the market would react to the rising interest. It's too early to decide on the entry prices when the market is still bearish.

Also note that the REITs with oversea assets or debts in foreign currencies are subjected to exchange fluctuation risks.

I would review this in a few month's time.

If you are new to reits please read this first - http://www.moneysense.gov.sg/Understanding-Financial-Products/Investments/Types-of-Investments/Real-Estate-Investment-Trusts.aspx

*Disclaimer: this is a mock portfolio for my experimental purpose and does not serve as a stock recommendation.

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