If you want a low risk investment, both the Income GrowtPortfolio and United SGD Plus Fund can be good options! Click on their links if you haven’t read about them yet.

Which of these 2 is better? Can we list the pros and cons?

Obviously one is a fund and the other is a portfolio. Both seem a better option over a fixed deposit. Beyond that, these two solutions give you different potential returns so let’s compare them further for you!


Dividend payout? (Fund wins)

United SGD Plus Fund is going to pay out a stable dividend of 0.3% on a monthly basis from Feb2018 onwards. On the other hand, the income growth portfolio collects dividends from the various funds it owns and your monthly dividends can vary.

Annual dividends for the United SGD Plus Fund totals to about 3.6%pa which is more than the latest projected of 2.7% from the income growth portfolio (as some funds are auto-reinvest mode and some equity funds pay little dividends).


Some capital gains along with dividends? (Portfolio wins)

United SGD Plus Fund invests into Asian short duration bonds and Asian High Yield bonds. There is going to be little expected capital growth in the bond prices it owns. It is more of a “stable” investment kind.

In comparison, the income growth portfolio is extremely diversified (in fact one of the most well rounded in this aspect) and has the flexibility to get 20%-40% equities into the portfolio. The portfolio seeks to help you to capture market opportunities better with active investment allocation. If Japan for example is expect to do well, you may see them having a larger than usual percentage of Japanese equities bought into your portfolio. And when it is time to sell, they can buy other equity or bond opportunities.

Comparing the two performances for year 2017, investors in the Income growth portfolio were net better off by about 3-4%. It must be mentioned that if equities come down, the income growth portfolio may likely be negative that year. Having said that, I do believe that for capital gains in the long term, the income growth portfolio wins.


More on the income growth portfolio

Scrutinising the allocation, I realised that there is 30% into short duration and Asian High Yield Bonds which is what the United SGD Plus Fund invests for you. Currently, the remaining 70% goes into 35% equities and 35% other bonds (which include global bonds, global high yield bonds and Asian Investment grade bonds).

What this means is as the portfolio charges 1.3%pa to run, the potential capital growth from this 70% holdings must be significant to win against a passive investment into United SGD Plus fund.

Actual account breakdown of income growth portfolio holdings

Name of Fund Product Type Available Units Investment Amount
Indicative Price Current Value
Aberdeen Japan Equity UT 196.1800 300.00 SGD
307.28 2.43
Allianz Eur Equity Gth Cl AT Acc H2-SGD UT 11.3800 200.00 SGD
202.56 1.28
Blackrock European Spec Situations A2 EUR UT 4.3900 300.00 EUR
308.33 2.78
Blackrock Fixed Inc Global Opps A5 SGD-H UT 53.9500 800.00 SGD
801.70 0.21
Fidelity Asian HY AMDIST SGD Hedged UT 215.2900 200.00 SGD
198.93 -0.54
Fidelity EmEur MidEast and Africa A USD UT 9.6600 200.00 USD
213.22 6.61
First State Asian Quality Bond Dist SGD-H UT 711.9800 700.00 SGD
693.04 -0.99
HGIF Glb High Income Bond AM3H SGD UT 45.1490 500.00 SGD
495.28 -0.94
JPM Latin America Equity A Acc USD UT 5.5350 200.00 USD
208.90 4.45
LionGlobal Short Duration Bond Cl A Dis SGD UT 422.9500 697.97 SGD
689.96 -1.15
Nikko AM Shenton ShortTerm Bond(S$) UT 808.4700 1,200.00 SGD
1,193.53 -0.54
PIMCO Income Fund Cl E Inc SGD-H UT 47.4090 500.00 SGD
494.00 -1.20
PineBridge Asia Ex Japan Sm Cap Eq A5CP SGD UT 17.7620 300.00 SGD
299.78 -0.07
Schroder Asian Growth Fund UT 126.8000 500.00 SGD
497.82 -0.44
Schroder ISF Glb High Yld A Dis SGD-H UT 6.4800 300.00 SGD
298.76 -0.41
United Asian HY Bond Dist SGD UT 255.6800 300.00 SGD
291.99 -2.67
United Emerging Markets Bond Fund UT 516.1200 700.00 SGD
687.47 -1.79
United SGD Fund Cl A Dist SGD UT 579.9700 600.00 SGD
593.89 -1.02
Vanguard Emerging Markets Stock Index USD UT 2.2200 600.00 USD
625.48 4.25
Vanguard Global Stock Index Fund UT 24.5800 900.00 USD
930.70 3.41
Discretionary Cash Account ( SGD ) CA 26.80 26.80


Future analysis

I will be analysing the balanced portfolio from IFAST next and what kind of investor should look to that.

Ready to invest? Click here to “Contact Josh Tan”.


Image credits: https://www.freeimages.com

I have been providing investment advise since the global financial crisis of year 2008 where markets tumbled at breakneck speeds. Focusing on a dividend strategy (not just price) helped me personally stay the investment course and profit from eventual market upswings. Currently, many share markets are close to an all time high but there are definitely still opportunities with a WIDE RANGE of funds that you can buy to start building dividend income!

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