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