As the year-end approaches, it’s time to think about topping up your Supplementary Retirement Scheme (SRS) account.
The SRS scheme is to encourage more people to save for their retirement, and as a bonus, it is eligible for tax relief.
Tax reliefs will be granted on a dollar-for-dollar matching basis depending on how much is contributed for the calendar year.
SRS accounts can be opened at any of the three Singapore banks with a maximum yearly contribution of S$15,300 for Singapore citizens and permanent residents, at the time of writing.
Foreigners are eligible to contribute up to S$35,700 per calendar year.
While the tax relief is welcome for income earners in a higher tax bracket, the funds in the SRS account earn a pittance.
The good news is that the government allows you to purchase a wide variety of investments with your SRS accounts.
These include local stocks and exchange-traded funds.
So if you are looking to grow your SRS funds, here are three stocks you can consider.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT that owns a portfolio of 143 properties worth S$8.5 billion as of 30 September 2021.
These properties are spread out evenly across Singapore and the US, and around 53% of the REIT’s assets under management (AUM) comprises data centres.
MIT has a strong sponsor in Mapletree Investments Pte Ltd, a real estate development, investment and property management company that has an AUM of S$66.3 billion as of 31 March 2021.
The REIT has continued to report a strong set of numbers for its recent fiscal 2022 first half (1H2022).
Gross revenue climbed by 40.1% year on year to S$283.6 million while net property income improved by 40.4% year on year.
The better performance resulted from the REIT’s major acquisition of 29 data centres in the US back in May this year.
Meanwhile, distribution per unit (DPU) rose by 14.2% year on year to S$0.0682.
MIT’s units offer a dividend yield of around 5.1% based on the annualised DPU of S$0.1364.
Portfolio occupancy remained robust at 93.7% and the REIT had a weighted average lease expiry of 2.8 years by gross rental income.
Aggregate leverage stands at 39.6%, allowing the REIT to gear up further for more accretive acquisitions.
DBS Group (SGX: D05)
When it comes to stability, there are few better options than Singapore’s largest bank DBS.
The group offers a comprehensive range of banking services for both individuals and corporations.
The lender has reported a stellar result for the first nine months of its fiscal 2021, generating a record S$5.4 billion of net profit.
Aside from record fee income, the bank also reported a write-back of general provisions as economic conditions improved.
DBS also provides a decent dividend yield.
The bank has declared a dividend of S$0.33 for its latest quarter, bringing the full year annualised dividend to S$1.32.
At the last traded share price of S$32.30, investors will receive a prospective yield of around 4.1%.
Last year, DBS parked business adjacent to its core banking business under the umbrella “DBS Finnovation”.
It currently holds three assets that promise further growth for the bank.
One is a 33% stake in Partior, an open industry platform that will accelerate interbank movements and reduce friction.
Another is a 23% stake in Climate Impact X, where DBS partnered with Singapore Exchange Limited, Temasek Holdings, and Standard Chartered Bank (LON: STAN) to set up a global carbon exchange and marketplace.
The third is a 90% ownership in a digital exchange that was set up late last year.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group enjoys a natural monopoly and owns and operates a platform for the buying and selling of securities such as equities, bonds, and derivatives.
SGX has been a consistent payer of dividends for two decades, and can be counted on to provide quarterly payouts into the foreseeable future.
For its recent fiscal 2021, the group paid out a total of S$0.32 per share, translating into a historical dividend yield of 3.4%.
SGX not only pays out a consistent dividend, but also has many growth initiatives up its sleeve, as detailed in its recent Investor Day.
The bourse operator’s focus on setting up an electronics communication network by next year and boosting the trading of ETFs and ESG products means that SGX should enjoy some revenue uplift in the years to come.
The impending listing of Singapore’s very first special purpose acquisition company, or SPAC, may also help to boost trading volumes and liquidity for the bourse operator.
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Disclaimer: Royston Yang owns shares of Mapletree Industrial Trust, Singapore Exchange Limited and DBS Group.
