Low Risk, Low Returns. High Risk, High Returns. Period.

It is known that low risk assets and securities brings about lower returns, while high risk assets and securities would generally yield higher returns. This is the tenet of the risk-return trade-off known in investment circles.

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If someone comes up and tells you that there is a low risk, high returns financial product, you would really need to take a step back and think thrice about it. 

Fraud aside, there are such things exist legitimately, but it does not exist permanently.

A good example of a legit low-risk-high-returns financial instrument is our own almost risk-free treasury bills (T-Bills). When short term interest rates began to rise back in mid-2022, for three years, we had enjoyed high yields from 6-month and 1-year T-Bills, whose average buying rates reached an all-time high of 4.36% and 4.24% respectively in Dec 2022. However, in Jul and Aug 2025, the numbers came back down to below 1.8% for both, the last time of which were that low was back in May 2022¹.

Thus for low-risk, high-returns, it is a simple case of “enjoy while it still lasts”.

As for the other end of the spectrum, i.e., high risk, low returns, any sane investor should be avoiding this scenario at all costs.

 

1 – SGS Prices and Yields – Benchmark Issues. Monetary Authority of Singapore. https://eservices.mas.gov.sg/statistics/fdanet/BenchmarkPricesAndYields.aspx (accessed 28 Sep 2025)

More On The REITs Front: UI Boustead And Keppel DC

Proposed UI Boustead REIT

Boustead Singapore has announced the proposed listing of the UI Boustead REIT (UIB REIT) on the Singapore Exchange (SGX). The REIT will focus on investing in logistics, industrial, high-specifications industrial, and business space assets in the Asia Pacific region, with an initial emphasis on Singapore and Japan. The initial public offering (IPO) portfolio is expected to include 23 properties, comprising 21 leasehold properties in Singapore and two freehold properties in Japan, with a total gross floor area (GFA) of 5.9 million square feet and a net lettable area (NLA) of 5.3 million square feet. The total agreed property value of the IPO portfolio is estimated to be S$1.9 billion.

Boustead will hold up to 16.9% of the IPO units post-listing and is expected to recognize a gain on disposal of approximately S$52.6 million. The REIT will be sponsored by UIB Holdings Limited, in which Boustead has a 20% interest. The listing is subject to regulatory approvals and market conditions.

Keppel DC REIT Preferential Offering

Keppel DC REIT is set to raise approximately S$404.5 million through a preferential offering to fund its acquisition of the freehold Tokyo Data Centre 3 for 82.1 billion yen (S$707 million). The preferential offering will allow entitled unitholders to subscribe to 80 new units for every 1,000 existing units held, at an issue price of S$2.24 per unit, which is a 5.2% discount to the volume-weighted average price of S$2.3622 on September 22, 2025.

The proceeds from this placement will not only fund the Tokyo acquisition but also support an asset enhancement initiative at Keppel DC Singapore 8, cover associated costs for a 30-year land lease extension for Keppel DC Singapore 1, and assist in debt repayment. The acquisition of Tokyo Data Centre 3 is expected to be completed by the end of 2025.

The preferential offering is slated to open on 3 Oct 2025 and close on 13 Oct 2025, with the new units listed on 22 Oct 2025.

 

The Bedokian’s Take

It is noteworthy that 100% of Tokyo Data Centre 3 is contracted to a leading global hyperscaler for 15 years with annual rent escalation (Amazon? Microsoft? Google Cloud?). The rise of cloud services and use of artificial intelligence had made data centres good proxies to invest in the former fields. With an accretive distribution-per-unit of +2.8%, and a still healthy gearing of 34.5% post-acquisition, we would at least be buying up our entitlement.

As for UIB REIT, I would wait for the issue of the prospectus before deciding.

Disclosure

The Bedokian is vested in Boustead Singapore and Keppel DC REIT.

Disclaimer

References

UI Boustead REIT

https://boustead.sg/sites/boustead.sg/files/2025-09/2025-09-18_Proposed-Divestment-of-Stakes-In-Certain-%20Singapore-Logistics-and-Industrial-Assets-And-Other-Potential-Transactions-In-Connection-With-The-Proposed-Listing-of-UI-Boustead-REIT-On-The-SGX-ST_1.pdf

 

Keppel DC REIT

https://www.keppeldcreit.com/en/file/investor-relations/presentations/2025/kdcr-acquisition-of-tokyo-dc-3-and-preferential-offering-presentation.pdf

https://www.businesstimes.com.sg/companies-markets/reits-property/keppel-dc-reit-raising-s404-million-unitholders-help-fund-82-billion-yen-tokyo-data-centre-buy

 

Two IPOs Coming Up

Two initial public offerings (IPOs) got the investing town talking nowadays: one is a bond exchange traded fund (ETF) and the other a real estate investment trust (REIT), namely the LionGlobal Short Duration Bond Fund (Active ETF SGD Class) (LionGlobal Bond ETF) and the Centurion Accommodation REIT (Centurion REIT). 

I will briefly go through these two IPOs and will give my very short take.

Screenshots of LionGlobal Short Duration Bond Fund brochure cover and the 2024 Centurion Corporation annual report cover

LionGlobal Bond ETF

The LionGlobal Bond ETF is an active bond ETF and is the listed version of an existing unit trust fund with the same name. It is an actively managed ETF that has a wide exposure of short-term duration bonds across various countries (primarily Singapore with about 40% of its net asset value or NAV) and sectors (76.5% NAV from financial and real estate). The weighted yield to maturity, duration and credit rating stood at 3.18%, 2.25 years and A-, respectively.

The main selling points of the ETF is the advent of falling interest rates, to which short duration bonds are less correlated to, and the stability of the Singapore Dollar (SGD) from which it would be hedged with against non-SGD bonds in the ETF. 

The LionGlobal Bond ETF IPO application period is from now till 23 Sep 2025 and will be listed on 29 Sep 2025, with an issue price of SGD1.00 per unit.

Centurion REIT

In the first of its kind in Singapore, the upcoming Centurion REIT is focused on worker and student accommodation (hence the word in their official listing name), with 14 properties across three countries (Singapore – 5 worker dormitories, United Kingdom – 8 student dormitories and Australia – 2 student dormitories), and a possible one more student dormitory coming up in Australia. The sponsor, listed company Centurion Corporation, is a known player in the dormitory business.

Yield wise, the projected distribution for 2026 is 7.47% and 2027 is 8.11%. The gearing ratio is around 20.9% at IPO, increasing to 31% after the acquisition of the 15th property mentioned in the previous section. Though 262 million plus units are issued in the IPO, only 13.2 million units are available for public offering in Singapore.

Centurion REIT is now open for IPO application till 23 Sep 2025 and will be listed on 25 Sep 2025, with the issue price of SGD0.88 per unit.

The Bedokian’s Take

I would view the LionGlobal Bond ETF as a corporate bond since the bond issuers are mostly in the commercial side. For our Bedokian Portfolio, it sits somewhere in between the cash portion and bond component, since the maturity (2.25 years) is too short for a corporate bond (five years minimum based on guideline) and too long as a cash-equivalent (one year maximum). The 0.25% management fee for an actively managed ETF is reasonable relative to the Amova SGD Investment Grade Corporate Bond ETF (Amova IG Corporate Bond ETF) which is at 0.26%, and not actively managed.

The LionGlobal Bond unit trust version had provided a 3.7% per annum performance since its inception in 1991, which is impressive given its bond status. While as an ETF, the risks are somewhat distributed, the big one in my opinion would be a systemic risk affecting the entirety of the financial and real estate sectors, since 76.5% of the bonds are from them.

As for the Centurion REIT, with accommodation as its primary driver, the income deriving from workers and students would have to depend on which they are supporting, that is the construction/manufacturing sectors, and education sector respectively. According to the prospectus, the increasing demand for workers is there with Singapore’s ongoing development and expansion of infrastructure and industrial capabilities. For students, particularly international ones, the United Kingdom and Australia remained as one of the top three study destinations for them. 

Both IPOs do have their unique propositions in terms of the potential; low correlation of short-term bonds to interest rates, and a REIT on dormitories. It would be a go for me though I find the Centurion REIT might be harder to get due to the small Singapore public offering numbers vis a vis the total number of units offered.

All figures are from the respective IPO and fund documentation unless otherwise stated.

Disclosure

The Bedokian is vested in the Amova IG Corporate Bond ETF.

Disclaimer

A Sign Of Market High?

A few weeks ago, I was taking a private hire vehicle home when the driver struck a conversation with me, which (somehow) drifted to the topic of investing and trading, and I was asked this question, “What do you think of (insert asset/security name)?”.

Picture generated by Meta AI

He claimed that he knew nuts about the workings of the market, and he picked this asset/security up from a recent passenger who did day trading on it, and apparently became quite successful. While I enjoy discussions like these, but taking into his investing/trading background (which I gave him the benefit of doubt of his stated zero knowledge), I treaded carefully the dialogue and advised him to read up more, since the asset/security he brought up is volatile.

For those who are aware, and/or had seen a couple of Hong Kong TV series on the stock markets, whenever anyone who has had no investing/trading experience suddenly engage with you on the markets, it is a sign of exuberance and hubris. The reason for this occurrence is simple: when people make money from the markets, the beneficiaries tend to talk about it, and if there are a lot of them around, the network effect gets bigger. Adding into the effects generated by news and social media, the outreach becomes greater to the point that those who were initially not interested would become so.

So, does this imply that the bubble is about to burst? My “think fast” instincts might tell me it is going to happen soon, and I needed to do some extreme hedging actions on my portfolio (e.g., sell all and run for the hills). My “think slow” brain, however, may be telling me to sit back and analyse on the asset/security in question, e.g., whether its bull case is justified. A balance is needed between the two, but I admit it is difficult to keep it this way.

Our remedy is simple: if we are vested in this asset/security and has future potential, we would just hold or rebalance when it goes up, or buy more when it is down. Following diversification and its related factors like correlation, this holding would not be the only thing in our portfolio, but only form part of it.

Therefore, whenever someone brings up a market tip in the car, just listen, evaluate and enjoy the ride.

Are We Fickle-Minded?

Being fickle-minded means not being consistent, and this can be a bit perturbing for others, especially when seeing that person ordering food and correcting a few times before settling on the final item.

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People love consistency because it signals a form of integrity from which trust is build upon. If someone is displaying inconsistency a.k.a. fickle-mindedness, that person would run the risk of losing his/her credibility, since a choice, an opinion or a viewpoint can change at any moment.

Speaking of change, as the saying goes, it is the only constant around. Things may change for the good, or the bad, thus we must adjust our expectations and views of the things at hand. It is not wise to stick to the same stand and maintaining the aura of consistency when the situation is heading south.

In the world of investing, you may have encountered occasions where an analyst or economist is saying one thing about the markets and economy today and then switched tack and commented the other thing on the very next day. This is also seen in posts by financial bloggers and podcasts/videos from financial influencers. Some may abhor these actions as the individuals are seen to be fickle-minded and not trustworthy, but I view them as adjusting their opinions after probably obtaining new data/information.

However, some things do remain consistent, like investment philosophies, principles and methodologies (e.g., diversification) that work most times, and age-old adages such as “be fearful when others are greedy and vice versa”.

Therefore, whenever you see someone changing their minds on something in their posts/broadcasts, take a step back and understand what their rationale was in doing so, rather than quickly judge and dismiss them.

Investing In Overseas Markets With Your CPF?

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Imagine investing in Apple shares using your CPF Investment Account (CPF-IA).

Sounds too good to be true? It is, to a certain extent.

Due to strict CPF-OA (Ordinary Account) rules allowing only certain locally listed shares, it is almost impossible to use these funds to invest in major US large cap stocks. While direct ownership is unavailable, indirect investment is possible through unit trusts (UTs) or investment-linked insurance policy (ILP) funds, which may include foreign securities like Apple depending on the funds’ investment mandate.

UTs and ILPs are categorised as Professionally Managed Products (PMP) under the CPF investment scheme, and they have a higher threshold for allowed CPF-OA investible funds compared to shares and gold.

While I shall not touch on the insurance component of ILPs as they are individualised products, their funds within share similar properties to that of UT’s. A common gripe about UTs is the deemed higher expense ratios vis-à-vis their exchange traded fund counterparts. However, in view of the CPF-OA investing rules, the choice of investment vehicles available, and the higher PMP investible limit, UTs are probably the main way to go if one wants to go beyond the 35% stock and 10% gold limits. 

Before going along this path, one needs to consider a few points before putting his/her CPF-OA to work. I had written two blogposts (here and here) to assist in the decision.

Disclosure

The Bedokian is vested in Apple, and invested in unit trusts via a robo-advisor with CPF-OA funds.

Disclaimer

The Japanese Market: Hai? Iie?*

*Yes? No?

It was once an economic powerhouse second only to the United States, and its companies, products and technological innovations ruled the international business community and attracted a huge consumer base. 

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However, after a series of events brought about by policy and economic factors, a drastic crash of its markets and economy resulted, and deflation and stagflation kicked in, marking the beginning of the so-called Lost Decade in the early 1990s. Later, the term had been pluralized to include the decades of 2000s and 2010s (i.e., Lost Decades). The extension of the lost years was due to the subsequent natural and market disasters such as the Global Financial Crisis in 2008, the Tohoku earthquake of 2011, and the COVID19 pandemic in 2020, not to mention the rise of the Chinese economy and competition.

In late 2023, the Nikkei 225 index, one of the two indices used as barometers of the Japanese equities market, began its surge to recovery, and by around February 2024 had gone to its all-time high, surpassing the level last reached in December 1989. In recent times, there were calls by institutions to invest in Japan, and Buffett’s company Berkshire Hathaway had made inroads into the five largest trading houses, which are diversified companies with huge horizontal and vertical industries and services.

On the economic front using the gross domestic product (GDP) growth rate, between Q4 2023 (coinciding with the beginning of the Nikkei 225 recovery) and Q2 2025, five of the seven quarters were positive, ranging between -0.5% (Q1 2024) and +0.7% (Q2 2024)¹. 

However…

Core inflation figures went to at least 2% every month year-on-year since Apr 2022², and while such figures were considered normal in most developed countries, for Japan, after experiencing periods of low or negative inflation, this was a rude shock, especially when real earnings including bonuses were mostly in the minus region during the same period³. Whilst the government tried to arrest the issue of inflation by raising interest rates, the sharp spike from 0.1% to 0.25%⁴ in end Jul 2024 caused a brief global market crash in early Aug 2024 (dubbed the “unwinding of the Yen carry trade”).

On top of GDP and inflation, two others longer termed “elephants in the room” are the oft-mentioned decreasing population demographics and the threat of a large earthquake (and accompanying tsunami) within the next 30 years. With so much not-so-good factors and news happening, is it still a compelling market to enter?

The Bedokian’s Take

Currently Japan is ranked fourth globally in nominal GDP on an individual country basis, below the United States, China and Germany respectively, but it is forecasted that their position would slip to fifth by the end of this year with India overtaking them. Despite having more negative than positive factors highlighted above, the silver lining is to capitalise on the weaknesses themselves. For instance, the rapid greying population favours healthcare and its related sectors and industries (e.g. medical technology components, geriatric equipment, etc.). Automation, where Japan was at the forefront before their Lost Decades, sees further runway ahead with its major role in addressing the dwindling labour population.

A weakened yen, though sounded like bad news for Japanese tourists wanting to travel overseas, is a good one from the country’s point of view in terms of the price competitiveness of its exports. In turn, this would bring about an increase in export-oriented domestic production and manufacturing (and incoming tourist dollars, too).

Learning Points

Looking at the macroeconomics of a country constituted part of The Bedokian Portfolio’s economic conditions layer for fundamental analysis⁵. Numbers like GDP, interest rates, inflation rates, etc. are publicly available from many sources and they tell an economy’s health and performance. While these macro variables are beyond one’s control, it is good practice to take them in for thought while carrying out one’s investment analysis.

Disclaimer

1 – Japan GDP Growth Rate. Trading Economics. https://tradingeconomics.com/japan/gdp-growth (accessed 16 Aug 2025)

2 – Japan Core Inflation Rate. Trading Economics. https://tradingeconomics.com/japan/core-inflation-rate(accessed 16 Aug 2025)

3 – Japan Real Cash Earnings YoY. Trading Economics. https://tradingeconomics.com/japan/real-earnings-including-bonuses (accessed 16 Aug 2025)

4 – Japan Interest Rate. Trading Economics. https://tradingeconomics.com/japan/interest-rate (accessed 16 Aug 2025)

5 – The Bedokian Portfolio (2^nd ed), p91-93