Seedly Motley Fools Growth Dividend Yield Portfolio

How To Build A Growth Or Dividend Portfolio With S$50,000

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06 Aug 2019

The process of building a strong, robust portfolio can be long and time-consuming.

Investors need to understand their personal risk tolerance as well as their investment goals and objectives in order to build a productive and resilient portfolio.

When I speak to investors, two types tend to emerge: those who lean more toward a growth-oriented portfolio, and those who prefer a yield or income approach.

I decided to explore how investors could construct two different portfolios using a total sum of S$50,000.

These will take into account portfolio allocation as well as the availability of cash. Through these two examples, I hope to illustrate that it does not take a huge amount of effort or imagination to build a portfolio. With either strategy, investors need to be mindful of the risks and monitor the ongoing business developments that could affect each company.

Disclaimer: This is not a sponsored post. Opinions expressed in the article should not be taken as investment advice. Please do your own due diligence.

Sample Growth Portfolio

	Ticker	No. Of Shares	Share Price as of 30 Jul 19 (S$)	Value (S$)	% of Portfolio	Dividend Per Share (S$)	Total Dividends (S$)
Mindchamps Preschool Ltd	CNE	15,000	0.62	9,300	18.6%	0.0134	201
Raffles Medical Group Limited	BSL	9,000	1.04	9,360	18.7%	0.025	225
iFast Corporation Ltd	AIY	9,000	1.13	10,170	20.3%	0.0315	284
SATS Ltd	S58	2,000	4.88	9,760	19.5%	0.19	380
Breadtalk Group Ltd	CTN	12,000	0.72	8,640	17.3%	0.015	180
Cash	-	-	-	2,770	5.5%	-	-
Total	-	-	-	50,000	100%	-	1,270

A sample growth portfolio looks something like the above. And consists of companies like:

Mindchamps Preschool Ltd
Raffles Medical Group Limited
iFast Corporation Ltd
SATS Ltd
BreadTalk Group Ltd

Notice, though, that even though this is a “growth” portfolio, each company still pays out dividends, albeit at a lower overall yield compared to higher-yield companies.

I have each company close to equal weight but also made sure I had cash on hand of around 5.5% of the portfolio’s value in order to take advantage of opportunities.

Growth, in this case, refers to companies that have identified good catalysts for long-term expansion, have made plans to broaden their geographical reach, and have engaged in mergers and acquisitions or are engaged in building assets overseas.

The companies above fulfil these criteria and are therefore labelled as “growth” companies. The portfolio yield is also noticeably low at 2.7% of vested capital as the portfolio gears more towards capital appreciation over time.

Sample Yield Portfolio

	Ticker	No. Of Shares	Share Price as of 30 Jul 19 (S$)	Value (S$)	% of Portfolio	Dividend Per Share (S$)	Total Dividends (S$)
VICOM Limited (excludes special dividend)	V01	1,300	7.20	9,360	18.7%	0.3663	476
Frasers Logistics & Industrial Trust	BUOU	8,000	1.20	9,600	19.2%	0.0708	566
DBS Group Holdings Ltd	D05	400	26.49	10,596	21.2%	1.20	480
Singapore Exchange Limited	S68	1,100	7.95	8,745	17.5%	0.30	330
Boustead Singapore Limited	F5D	11,000	0.78	8,580	17.2%	0.030	330
Cash	-	-	-	3,119	6.2%	-	-
Total	-	-	-	50,000	100%	-	2,183

For this sample yield portfolio, I selected companies with an overall higher dividend yield (more than 4%) and are more geared toward income consistency and stability.

These companies are:

VICOM Limited
Frasers Logistics & Industrial Trust
DBS Group Holdings Ltd
Singapore Exchange Limited
Boustead Singapore Limited

Some of these names (e.g., DBS Group Holdings Ltd (SGX: D05) and Singapore Exchange Limited (SGX: S68) also pay quarterly dividends, which is a very useful feature for a retiree.

Note here that the overall portfolio dividend yield is 4.7%, noticeably higher than for the growth portfolio. Although this may be labelled as a “yield” portfolio, there is still growth present in some of the above names, it just may not be as aggressive or as high as some of the names within the growth portfolio.

Investors should assess each company on its own merits to decide if the projected growth rate is suitable for their risk appetite.

Investors Can Mix And Match

The above are just two methods of constructing portfolios, based on either growth or yield characteristics.

Investors can mix and match different names in order to create a portfolio customised to their own circumstances and goals.

I generally look for a mix of fairly high-yield names to bolster my dividend income, while also seeking growth in other names.

Investors can use these two sample portfolios as guides for how to structure their own personal portfolios to attain the investment goals they seek.

Want More In-Depth Analysis And Discussion?

Why not check out Seedly’s QnA and participate in the lively discussion surrounding stocks like Raffles Medical Group Ltd (SGX: BSL) and BreadTalk Group Limited (SGX: CTN)many more!

Stock Discussion on Raffles Medical Group Ltd

Stock Discussion on BreadTalk Group Limited

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