If you are in your 50s or close to retirement, you may want to think about investing beyond your own financial goals.
Starting young is very useful when it comes to investing as it allows your money to compound over a longer period.
Ideally, if you can start to allocate money to your investment account when you’re in the crib, you could enjoy amazing growth that can last years or even decades.
Babies, of course, are going to need a bit of help from their parents.
By allocating some money for your newborn or young child, you can provide them with a head start in life.
Parking this money into reputable blue-chip companies or well-managed REITs not only keeps their capital safe but also helps to generate returns that can be reinvested over time.
One method of doing this is to maintain a segregated investment account that invests solely for your child.
That way, you can track the progress of this fund and also periodically add to it over the years, akin to a dollar-cost averaging method.
Here are three stocks you can consider for your kid’s investment account.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT, or PLife REIT, is one of Asia’s largest healthcare REITs with assets under management (AUM) of around S$2 billion as of 30 June 2021.
The REIT owns 55 properties in total comprising three hospitals in Singapore, 51 nursing homes in Japan, and strata-titled lots in a specialist clinic in Kuala Lumpur, Malaysia.
PLife REIT has an enviable track record of uninterrupted increases in recurring distribution per unit (DPU) since its IPO in 2007.
Recently, the REIT also held an EGM where unitholders approved the signing of new master lease agreements for its three Singapore hospitals that will last till end-2042.
The sealing of this deal provides stronger visibility for the REIT and unitholders can be assured of steadily rising DPU.
The REIT also reported a mixed set of numbers for its fiscal 2021 first half (1H2021).
Although gross revenue and net property income dipped slightly year on year, DPU inched up 4% year on year to S$0.0695.
Dividend yield based on annualised DPU of S$0.139 stands at 3.1%.
United Overseas Bank Ltd (SGX: U11)
United Overseas Bank, or UOB, is one of Singapore’s three largest banks.
The group has a global network of 500 branches and offices in 19 countries and territories.
The lender has remained resilient throughout the pandemic and for its fiscal 2021 second quarter (2Q2021), it reported a healthy set of financials.
Loan growth was healthy and its net profit surged by 43% year on year to exceed S$1 billion.
The bank also declared an interim dividend of S$0.60 per share, exceeding the S$0.50 it paid out in 2019.
UOB’s wealth management arm continues to grow its AUM, up 7% year on year to S$137 billion for 1H2021.
The group has a diversified loan portfolio with the main sectors represented by building and construction (26%), and housing loans (23%), based on its 30 June 2021 financial statistics.
The bank is also beefing up on its ESG monitoring and has put together a task force for climate-related financial disclosures (TCFD) to help it achieve its green objectives.
To tap on rising consumer affluence, UOB also launched its digital bank TMRW and has garnered more than 355,000 customers in both Indonesia and Thailand.
The bank will invest up to S$500 million over the next five years to scale up its digital offerings and plans to launch TMRW in Singapore by the fourth quarter of this year.
Haw Par Corporation Ltd (SGX: H02)
Haw Par is a conglomerate that has four key divisions — healthcare, leisure, property, and investments.
Its healthcare division is represented by the famous Tiger Balm brand and manufactures a wide range of products such as balms, ointments and pain patches.
The group has seen its revenue and net profit being negatively impacted by the pandemic.
For 1H2021, revenue tumbled by 18.6% year on year to S$65.8 million while net profit plunged by almost 42% year on year to S$53 million.
Despite the sharp fall in net profit, the group continued to generate free cash flow.
The group has also paid out a consistent dividend over the years, with 2018 being a bumper year when the group paid out an S$0.85 special dividend to mark its 50th anniversary.
For 1H2021, Haw Par declared an unchanged interim dividend of S$0.15 per share.
The business should enjoy a strong recovery once the pandemic has passed and borders start to reopen.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
