Don’t bother looking online. The answer you are looking for is a grand total of $0.
What? How is that possible? Didn’t they pay out dividends of SGD 0.023 in October 2013? (You can get ABF Singapore Bond Index Fund dividend history [A35] from SGX.com)
Similar to what was done for Nikko AM STI ETF, they have quietly shifted the dividend distribution date to January 2015.
Regardless, ABF Singapore Bond Index Fund remains my preferred instrument of a quick and easy way of gaining access to SGD$ denominated debt obligations including HDB, LTA, PSA, SP Power and of course, the Singapore Government.
- WHAT
ABF Singapore Bond Index Fund - NET ASSET VALUE
S$1.16800 - FUND SIZE
SGD 508.42 million - TOTAL EXPENSE RATIO
0.26% - CPFIS-OA INCLUDED?
Yes
ABF Singapore Bond Index Fund Prospectus
The Manager currently intends to pay out income dividends of the Fund to the Holders annually around January of each year. There is currently no dividend reinvestment service. (Clause 50, Page 33)
I don’t like bond funds because there’s no guarantee of capital upon maturity, which to me, is one of the most important features of investing in bonds. Without this, I might as well invest in a few pref shares listed in sgx. Different but also quite similar to bonds. Any thoughts on this?
Hi La Papillion,
Indeed there is no guarantee of capital for bond funds, but I would first consider the portfolio holdings. Specifically for ABF Sg Bond Fund, I’m comfortable with likes of HDB and LTA for their low risk. More importantly, what I am after is the “low correlation to equity” characteristic plus ease of re-allocation, especially when it’s gonna be only $100+ per lot in 2015 after the board lot reduction.
I’m not too familiar with preference shares though. The last I remembered, there isn’t much choices on SGX? I could be wrong.
I have my view for not buying this etf. The only reason why I would go for a bond fund is to diversify the credit and interest risk. However this etf is already holding bonds with very good credit risk. At such, I would rather go for sgs bond ladder.
The ocbc 360 saving account also can be consider as an alternative, the interest is @3.05% pa ( subject to conditions). The good thing about that is there is no transaction cost when you rebalance your portfolio.
The OCBC 360 is an excellent product in my opinion. I just don’t like having rules and conditions to adhere to.
Ya, it’s pref shares from the banks lah, so it’s pretty safe, but the yields are pretty decent too. I’m treat ‘low correlation to equity’ with a bit of skepticism…from what I’ve observed, doesn’t seem so true. At best, it drops slower than the stocks…maybe that’s good enough.
Anyway, thanks for the good sharing. I really hope they will open up the retail bond market by lowering the min, instead of 250k.
Haha! That was why I put “low correlation to equity” in double quotes in the first place – gotta take it with a pinch of salt.
I have heard a lot about this fund and the millionaire teacher also recommends it. Other than for the sake of “low relation to equity”, isn’t the returns really low – like since 2006 – now price fluctuates roughly between 0.94 – 1.30. If they don’t even issue dividends, is this really worth putting money into this? How does gaining access to SGD$ denominated debt obligations including HDB, LTA, PSA, SP Power etc. make this a worthy investment if your money does not grow much?
Hi wooi,
I’m guessing Andrew Hallam recommended ABF Sg Bond Fund because this is pretty much the most convenient tool available to construct the bond component of a classic, 3-fund portfolio.
My understanding from what he wrote in the Millionaire Teacher is not to look at each component as a single entity but rather to focus on the entire portfolio as a whole. I felt that a significant reason for his massive portfolio growth is due to rebalancing – cashing in his earnings during bull runs to buy bonds, and selling off bonds during crashes to stock up on equities.
An alternative to this Bond fund would be 1) Nikko AM Shenton Short Term Bond Fund 2) UOB United SGD Fund Class A. Both are short term bond unit trusts with 0% sales charge if you choose the right distributor. Plot both their returns against the STI and you how superior their performance are (applicable even during 08/09 subprime crisis).