Asia Focused Bond Funds Besides PIMCO GIS Income Fund Which Has Overly Concentration in United States.

With the numerous online concern by many folks over the weakening USD and US inflationary pressure from Donald Trump's import tariff, the popular PIMCO GIS Income fund and other US bond funds which are heavily concentrated in US assets has been making people very uncomfortable. The funny thing is that the market cannot decide on whether it will be an inflationary environment or a declining interest rate environment (from imminent rate cut due to worsening business sentiment). There are currently 2 Asian bond funds which I have considered for diversification away from US geographical sector over-concentration.

1. PineBridge Asia Pacific Investment Grade Bond Fund

The 12mth yield for this fixed income fund is at 5.63%. Howver, annualised 1 year return has only been at +2.70%. Strangely, despite it being an Asia Pacific focused bond fund, it contained 2.16% of US bonds in its portfolio- but I guess this is a lot better as compared to the Fidelity Asian Bond Fund which I will discuss further below in Pt 2.

2. Fidelity Asian Bond Fund

As aforesaid mentioned, a surprising high amount of 27.32% of its investment in bonds is in the United States albeit being an Asian focused fixed income fund. It is giving out 5.65% of distribution yield. Its annualised 1 year return of +2.56% is almost similar to the PineBridge Asia Pacific Investment Grade Bond Fund. 

Parting Thoughts

I am currently vested in the PineBridge Asia Pacific Investment Bond Fund as it has the least concentration of US assets in its geographic allocation relative to Fidelity Asian Bond Fund. My personal experience of a higher return fixed income fund is still PIMCO GIS Income Fund which delivered an annualised return of 4.61%. With the economic downturn, it is inevtible that the distribution yield of all bond funds will continue to go further down and prices of bond funds will have potential upside. Anyway, good to put away some of my investments in bond funds which do help a lot in reducing wild volatiltiy in valuation as compared to my equities holding. 

Shocked to Learn that 90% of Pre-University Space Reserved for Indigenous Population- Be thankful!

Snippet Extract from The Straits Times on 9 June 2025 "Malaysian top scorers’ hopes for pre-uni spots dashed, reigniting fairness debate"

I was shocked beyond words that Malaysian top scorers scoring 10As in our neighbouring country of Malaysia does not guarantee a spot for public Pre-University programme. Apparently, 90% are still being reserved for indigenous population. I thought that things have improved slightly since the new poltical parties coalition took power. If separation from Malaysia did not happen in 1965, Singaporeans would also have faced the same policy and the only way out were to send your kids to costly private college programme. Think we should be grateful that our local meritocracy system (albeit its con of highly stressful education environment) creates a equal opportunity environment regardless of race and religion.  

Alibaba Shares Dropped Back to HKD110 Level- Thanks to King of Mayhem Donald Trump.

Interestingly, Alibaba has been on a wild see-saw ride over the past year with unprecdented level of violatitlity thanks to the antics of the King of Mayhem Donald Trump who ranted on China for violating the trade pact reached in Geneva to avoid punishing Geneva. On mid-may 2025, Alibaba hit a high of HKD131 per share but yesterday it went down to HKD110 on 2 June 2025. This is a crazy drop of 16% within 2 short weeks. 

1. Added 300 Alibaba shares at HKD110 per share

When I happened to see the sudden dip to HKD110 level just before lunch break, I decided to take action and accumulate additional 9988 stocks. I pumped in S$2K and also sold off all my Industrial and Commercial Bank of China stocks to raise funds to purchase 300 Alibaba shares. Alibaba cloud busines looks promising in the long term with ambitious global growth-this is now the new growth engine of Alibaba. 

2. The famous AK71 now also buying Alibaba

When you see long time critic of Alibaba and China stocks now changing his stock pick to Alibaba, it does point to the severe undervaluation of its current weak market share price relative to its underlying business growth potential. But I kinda find it amusing that AK71 just changed tune like that when over the past few years, his stand on China was that it was uninvestable due to political/policy changes risk.

Parting thoughts

I may acquire further Alibaba shares if the price plunge to HKD100 level or below. In addition, Alibaba will be paying out its annual dividend soon. For those interested, it will ex-dividend on 11 June 2025 (Wednesday) and payout US$0.2501 per share on 3 July 2025 (Thursday). This is a 1.7% dividend yield and not too bad while waiting for the market to re-price Alibaba. 

Capitaland Ascendas REIT Disastrous Acquisition of Data Centre & Science Park- Selling Out Long Term Loyal Retail Shareholders.

I am utterly flabbergasted by the mostly raving praises by analysts with regard to the recently announced S$700Mil acquisition of the new Tai Seng data centre and business property at Science Park by Capitaland Ascendas REIT ("CLAR"). Yes, I have no doubt that the usual yield accretive argument and stable & resilient income streams from established tenants (Shopee) makes perfect sense. But the financing aspect of this acquisition exercise is a slap in the face of long term loyal retail Unit-holders with the severe dilution in their investment into CLAR via only a private placement instead of opening up to all unit-holders. 

How bad is the dilution on long term unit-holders?

Most long term Unit-holders probably entered into CLAR at prices ranging from S$2.80 per unit to S$3.00 per unit. If one entered during the pre-COVID days, then it will be S$3.00 to S$3.50 per unit range. Worst still, CLAR management offered a 5% discount to the market price of S$2.6059 per unit on 27 May 2025, that is, S$2.47 per unit.

Overall, S$500Mil of private proceeds were raised to fund the purchase of the above mentioned properties at the discounted price per unit of S$2.470. 

Parting thoughts

Personally, I thought that the CLAR management ought to have opened up the fund raising to all retail-unit holders instead of taking the easy way out and selling out long-term loyal unit-holders. Anyway, if queried, CLAR management will probably come up with the stupid excuses of (i) uncertainty of successful fund raising via preferential rights issue in current economic climate and/or (ii) the need for speed to close out the deal. This is extremely disappointing as this corporate action does not benefit existing retail unit-holders and is a stab in their back. 

Additional Thoughts on Unit Trust PIMCO Income- Opaque and Little Transparency Leads To Weird Theories.

This is following up on my last post on "The Bashing of PIMCO GIS Income Fund" on 20 May 2025. Since then, Mr Loo from 1M65 has also presented his extensive research by his 2 staff members. Similar to Master Leong, both concluded that PIMCO GIS Income Fund pays out one-third of its distribution from capital. Hence Mr Loo asserted that PIMCO GIS Income is functioning like our CPF-Life whereby one enjoy high upfront payout but the capital will be depleting as the recurring income is only two-third of the payout.  

There are a number of extremely contradictory points:

1. Capital Distribution unsustainable may not be true.

Yes. Apparently, it is true that one-third of the distribution are from capital as per additional details published on PIMCO GIS own website. The current yield from income produced from the fixed income instrutment is only 4.6%. Hence if one pays out 6.5% per annum, then the difference of <1.9%> payout must be coming from capital. Therefore, arguably, PIMCO GIS Income is a declining fund that behaves like CPF Life. Saying that, I disagree with this CPF-Life analogy and I should elaborate further below. 

Extract of Risk Free US Treasuries- 4% to 4.51% interest yield.

2. The current yield of 4.6% does not make sense.

The least attractive yield of the financial instrument invested by PIMCO should be US Treasuries as these are usually considered risk-free. As per above screenshot, Us treasuries hover around 4%-4.5% currently. Hence the other component of PIMCO Income portfolio of commercial grade bonds will be priced at 1%-3% premium on  top of any risk free bond rate. Also, PIMCO's investment into Mortgage back securities should be yielding between 6% to 7%.  Taking into account basic logic, the theoretical yield can never be 4.6%. It will be a lot higher. 

Did PIMCO publish the yield of 4.6% based on its historic original investment cost from the pre-spike in interest rate era and not after fair valuation downward adjustment? The maths looks pretty weird.

3. Published yield to maturity is 6.71% relative to the current yield of 4.63%

Now, if your current yield is only 4.63%, then how on earth will your yield to maturity hit 6.71%? This means that PIMCO does have strategy that works on reaping consistent capital gains from fixed income instrument. 

Note that "yield to maturity" of fixed income instrument considers not only the coupon payments but also any appreciation or depreciation in the bond's price if it's held until maturity. 

Parting thoughts

Based on the above 3 points, PIMCO is definitely not functioning like CPF-Life as per what 1M65 Mr Loo is asserting. I can only say that most unit trusts like PIMCO GIS is quite opaque and despite so many finance influencers analysing it, the only folks who knew the exact functioning is PIMCO themselves.  

Lendlease REIT Fell Below $0.50 Per Unit- 7.6% Distribution Yield.

The recent Donald Trump madness has caused many SREITs to decline sharply again with US Treasury rates spiking due to lack of market confidence and demand. Equities such as REITs are thus also adversely impacted. For Lendlease Global REIT (“LREIT”), based on the last half year distribution of $0.018 per unit, this will mean an annualized distribution of $0.036 per unit. Since last market traded price is $0.475 per unit as at 23 May 2025, this translates to a high distribution yield of 7.6%

While LREIT is not affiliated with Temasek Holdings such as REITs from the Mapletree and Capitaland stable, it is nevertheless still an attractive retail REIT for further diversification. Its heartland retail mall of JEM and long tenancy of office block in JEM to the Ministry of National Development added further resiliency to its rental income base. I will scoop up more of LREIT if the unit price crash further. Not sure whether it will reach $0.450 or below per unit. I am seriously pondering how low can SREIT decline and despite the global market pessimism, I believe the light will shine one day for REITs.

Interestingly, I noticed that Choon Yuan from InvestMoolah had moved in to accumulate LREIT recently. Personally, I am looking to add on additional retail focused REIT such as LREIT and Mapletree Pan Asia Commercial Trust amidst the current storm if the distribution yield spikes further to near 8%.

Living on the Knife’s Edge These Days- Investment Portfolios Heavy Losses and Personal Wealth Maybe Already Destined at Birth

Just when everyone thought that the China-US trade war has simmered down, the King of Mayhem, Donald Trump, unleashed another round of turmoil to the global stock markets by threatening a 50% tariff on the European Union (“EU”) and a 25% import tariff on Apple iPhones not made in US. This is hundred of billions in trade with EU. Retaliatory actions-which we are sure of-by the EU will basically mean the end of trade between US and the EU. It does not matter whether this is another brilliant negotiation tactic out of the “Art of the Deal” book by Trump as he has succeed in damaging trade and bilateral ties with EU even if he were to change his mind later on. 

1. Local bread and butter- potential loss of jobs in upcoming market slowdown.

There has been a slow down in business in retail definitely. I have been living on the knife’s edge (刀口上舔血) for the past 2 years. Despite my company making record profits in 2024, the senior management at HQ has not approved any salary increment again. I guess the uncertain economic outlook contributes to the current predicament. Maybe should have applied to be a civil servant in government for stability instead of taking a private commercial career path. Now too old to change with a short runway once you hit middle age.

2. REIT heavy portfolio going lower.

Wow, the recent see-saw up down up down for REITs is never ending. With bond price crashing due to higher yield demand for the supposingly risk free US Treasuries, this mean that REITs must also produce a higher income yield which puts tremendous downward pressure on REITs. We can see the Mapletree family of REITs crashing to near recent low again. Will it go down further? Yup, this is definitely possible given the antics of the King of Mayhem.  

3. Transferring CPF Ordinary Account to CPF Special Account for higher 1.5% more interest income.

When we talk about the strategy of transferring CPF OA to CPF special to get the higher 1.5% more interest income, the property guru and YouTuber Eric Chiew always come to my mind. This is because Eric will mock folks who do this as it means not much money left in the CPF OA to upgrade to bigger private condominium to make tons of money. 

Sometimes, one has to accept one’s wealth destiny. My ex-colleague (68 years old) who has retired told me that in everyone’s life, how much money one can made in this lifetime is more or less already decided at birth. Haha….so not everyone can expect to be like Eric who keep flipping properties to get wealthy and then get to live in landed property. If your destined life is like salted vegetable, chances are when you try to buy a second property to Huat big big, you may end up like in 2008 or 1990s where the property market crash over 20% and get very stressed up for 4-5 years trying to pay off the mortgage like a slave to the bank and your work place boss.

Or to share another tragic story, I had another colleague who suddenly got into a car accident (you can’t control other drivers from recklessly driving into you) with multiple fractures and also pain medication withdrawal side effects that effectively diminish your ability permanently to function effectively as an employee and business owner. Then how to pay for huge monthly mortgages?

Parting thoughts

The only light at the end of the tunnel is that Donald Trump only has 4 years tenure as president of the United States. Making America Great Again (“MAGA”) seems to be destroying everyone including US itself with the high prices for daily necessities and other imported products.