Low Risk Investment (Edition Oct2019)|3y Endowment, Portfolio or Bonds?

If you like low risk investment or even those with no risk, your expectation of returns should be lowered.

Some alternative methods to get some interest would be by accounts such as the DBS multiplier or the OCBC 360 account which should be explored. 

These accounts do have terms and conditions to fulfil thought and they can change the interest rates easily.

But let's say you've done them already or you don't like them and are ready to get invested, these are 3 possible options.

3y Endowment plans into the NEW Singlife Endowment Series 4

Below is a snapshot of Singlife Endowment Series 4 options.

3years plan gives you 2.25%p.a and 5years plan gives 2.38%p.a.

If you don't know, SingLife is a new insurer with a BBB credit rating.

However, your investment into the endowment will be guaranteed by SDIC if it's $75,000 and below.

PROS: 2.25%p.a fully guaranteed and capital guaranteed at maturity.

CONS: Cannot withdraw early

*This plan is subjected to change and if you are keen to find out more now, click here to contact us

Low Risk Portfolio into IFAST DPMS "Income Growth" portfolio

IFAST DPMS has an "INCOME GROWTH" portfolio which is moderately conservative. I'd feature it here.

This had been the investment journey so far and it is important to understand some performance history.

An investor who sells out after a 8% decline in end 2018 would miss out on the quick 12% gain that comes after.

The moral of the story is investments have risk, even if it's a low risk portfolio.

If you gain from interest on CPF or fixed deposits, it will be a straight (if not exponential) line return.

Investments returns though are never a straight line. But potential returns are more, agree?

Updated with Aug2019 portfolio updates

You get 35% equities and 65% bonds in this "INCOME GROWTH" portfolio.

It is extremely diversified (in fact one of the most well rounded in this aspect) and has the flexibility to allocate 20%-40% equities into the portfolio for you. 

The portfolio seeks to help you to capture market opportunities better with active investment allocations. If Asia equities for example are expect to do better than US equities, you should see them getting for you a larger than usual percentage of Asia equities and a smaller than usual percentage of US equities.

PROS: No lock in period for investment. Actively invests and diversifies into bonds and equities.

CONS: Performance is non guaranteed and periods of losses is possible. Total annual fees for investing into the portfolio is higher at up to 1.3%p.a.

This portfolio is a globally diversified approach with active management. But personally I prefer the IFAST Balanced portfolio. Since there are annual fees to it, might as well have a wider mandate to it.

The allocation is currently 55% equities and 45% bonds and more information in the link below...

What Is IFAST DPMS? | How You Can Get Invested For Long Term!

Low Risk Bond Fund into Eastspring Investment Unit Trust - Singapore Select Bond A

Eastspring Investment Unit Trust - Singapore Select Bond A SGD fund is a morningstar 5* rated fund worth considering.

The Fund objective" investing primarily in Singapore-dollar denominated debt securities and foreign currency debt securities which will be hedged back into Singapore Dollars.". Read more here.

While the fund invest mainly into investment grade bonds, it's performance can fluctuate according to interest rate expectations of the market.

As compared to a short duration investment grade bond fund in NIKKO AM Shenton Short Term bond fund, it has more volatility as shown below.

Both funds are considered low risk investments with it's 1/10 risk rating in IFAST.

A further alternative to consider include ABF Singapore Bond Index ETF (A35) which did a 2.16%p.a over the last 3 years.

Past performance does not guarantee future returns.

PROS: No lock in period for investment. Actively invests and diversifies into many bonds.

CONS: Performance is non guaranteed and periods of losses is possible. Performance can be affected by interest rate changes. Focus is narrowed to Singapore issued bonds.

*This fund can be purchased as part of your portfolio, click here to contact us

Conclusion and invitation to join "Millionaire Kids" by TheAstuteParent

Investments are an important part to achieving your financial goals.

There are other options for low risk investment portfolio and low risk bond funds to pay out dividends regularly to you as an investor.

If you'd like to know more on how to start investing, check the following post below. It will address how to conquer your concerns on losses and have 5 must see tips

How To Start Investing: Financial Advisors Gives Their Best Advice!

Here at TheAstuteParent, we are one of the largest resource for insurance planning and financial advice for families! Over the course of our careers, we have met and helped many families. 

Click here to join the Facebook Group Millionaire Kids by TheAstuteParent. #millionairekids. The community is there for you ask and answer questions, share your knowledge and meet like-minded people.  

Being a breadwinner is a unique stage in life. So take on that responsibility and be an Astute Parent !

Last updated on October 8th, 2019 at 05:43 pm

Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://theastuteparent.com/josh-tan Practising financial planner with Promiseland Independent Pte Ltd. TJL100057681 EXPERIENCE: More than 14years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.

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