3Q 2026 Portfolio Update

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 The latest wave of earnings reporting is more or less done for my portfolio, and my dividend calendar has been fixed. So let's get into my 3Q 2026 Portfolio Update.

My portfolio has delivered +20.06% total return YTD. This is lagging behind the STI, which has returned +23.30% YTD. As mentioned in my last portfolio update, I had reduced my DBS position and rotated into G3B, CLR and CFA ETFs. This contributed to the underperformance this year. My current portfolio exposures are as such:


  • G3B STI ETF (28.47%): ETF tracking the flagship Straits Times Index, giving exposure to 30 Singapore blue chips. With a single lot of the banks becoming increasingly capital-intensive, buying G3B has become a convenient way for me to continue building exposure to the three local banks while maintaining greater diversification.
  • CFA and CLR REIT ETFs (9.06%): Taken profit from CFA REIT ETF and mostly rebalanced to G3B which I view as more diversified and resilient. 
  • OCBC, DBS, UOB (25.96%): OCBC (13.43%), DBS (6.59%), UOB (5.94%)
  • Individual S-REITs (20.13%): CICT (4.23%), FCT (3.64%), Suntec (2.09%), Others (10.17%)
  • Others (16.38%): Singtel (5.99%), CapitaLandInvest (2.93%), ComfortDelGro (1.76%), Others (5.70%)
In hindsight, the rotation cost me some upside as DBS continued to outperform. However, I remain comfortable with the decision as it reduced my concentration in a single stock and increased diversification across the portfolio.

REITs Share Price Weakness

Even as earnings and DPU improve, REITs were being sold down in August with the primary catalyst being a spike in long-term US bond yields. In the short-term, REITs are often treated as "bond proxies". Investors buy them for their steady distributions, evaluating them based on the yield spread, the extra return an S-REIT pays over risk-free government debt. 

When US long-term bond yields spiked past 4.7% to 5.3%, the gap between "risk-free" returns and S-REIT dividend yields (which average around 5.5%) narrowed aggressively. With Treasury yields offering a substantially higher risk-free return, the yield premium investors demand from S-REITs narrows, putting downward pressure on REIT valuations.

I am expecting REITs share price weakness to continue amidst challenging economic conditions. My partial sale of CFA REIT ETF happened around the first week of August, and I intend to re-purchase shares moving forwards with potentially attractive entry yields. 

So far in July and August, I have also purchased individual REITs such as AIMS APAC, Keppel DC, Lendlease and UIB REIT. As a component of my portfolio, individual REITs remained relatively flat even after additions as share price weakness continued. 

Mixed Earnings, Steady Dividends

Several of my portfolio companies reported margin pressure from wage inflation and normalization from post-pandemic peaks. However, boards of directors declared steady or increased dividend payouts, sending a clear message about their balance sheet strength and underlying cash flows. 

Sembcorp's underlying net profit contracted 25% YoY to S$369 million due to power tariff normalization and transaction costs for the Alinta Energy acquisition. Despite lower short-term earnings, the board hiked the interim dividend by +22.2% to 11.0 cents. The dividend hike nevertheless suggests that management remains confident in the group's cash-generating capacity despite the near-term earnings decline.

Similarly as I have previously written, ComfortDelGro's reported PATMI fell 19.7% YoY and they maintained an interim dividend of 3.91cts. 

What I'm Doing Next

DBS Group Research gave the STI a year-end target price of 5850 for 2026, as well as a 12-month target price of 6110 (5% discount to the 12-month bottom up target prices of component stocks). My plan for the rest of the year is the same as always, to reinvest dividends and new capital. 

I will build up my existing blue chip exposures through G3B STI ETF, while also deploying capital to counters with discounted valuations and/or attractive entry yields. 

As of this week, I have purchased more shares of HRNet, FCT and CLR REIT ETF. 

If US bond yields remain elevated and trigger further selloffs, I am looking to keep deploying funds into blue chip REITs with resilient debt profiles, positive rental reversions and healthy interest coverage ratios. 

Stay the course and let dividends compound. All Huat !!

Upcoming Dividends

Received:

  • 3 August: CFA REIT ETF
  • 13 August: Keppel Infrastructure Trust
  • 19 August: Singtel
  • 25 August: DBS
  • 28 August: OCBC, UOB, Suntec, CLR REIT ETF
  • 31 August: CDG, YKGI
Upcoming:
  • 4 September: Sembcorp
  • 7 September: MIT
  • 8 September: PLife, Ascendas
  • 16 September: MLT
  • 18 September: KDC
  • 21 September: Lendlease
  • 22 September: Genting
  • 23 September: AIMS
  • 25 September: CICT
  • 30 September: HRNet
  • 2 October: Riverstone

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