If you’re worried about your financial future,
why not do something?

Singaporeans have a lot on their minds. In our upcoming investor survey*, you share your concerns about the high cost of living, increasing health care expenses and job insecurity. On top of that, over 60% of us think that we will outlive our savings or be a burden on our family in retirement.

Having enough income – now and in later life – is an important goal for most Singaporeans. Fortunately, there’s something we can do about it.

Cash is handy, but hanging on to it is a tough way to reach your financial goals. In fact, with current savings interest rates at less than 1% and inflation ticking up, you’re going backwards.

You’ve worked hard to build up your wealth but to generate the level of income you want, you’ll need to make your cash work as hard as you do. This means diversifying your portfolio into investment solutions tailored to your income needs.

Achieving your income goals

Investors should be on the lookout for ‘reliable income’ products. In particular, ‘dividend growing’ equities, or high-quality debt can deliver a higher income than cash without sacrificing portfolio growth.

*BlackRock Investor Pulse Survey, 2017

Stop sitting on cash

Stop sitting on cash
Investors in Singapore hold a lot of their savings in cash, particularly compared to the rest of Asia. Almost half (47%) of all of our savings are in cash, compared to 37% in China and 33% in Hong Kong.
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Looking for more income?
It’s all about reliability

We know income is a vital goal for you, but are you going about it the right way? Amid market volatility, it’s tempting to sit in cash and wait for greater certainty. But cash won’t deliver the regular, steady income you need.

This is particularly the case in this new era of ‘reflation’ – a return to global growth that brings challenges such as return-eroding inflation and an environment that can make income harder to come by.

The good news is that you now have access to income investments that are more effective than cash at delivering reliable income. Even better, these products don’t require you to make a choice between portfolio growth and income. And because they’re reflation resilient, they will survive and thrive in this new investment environment.

Discovering Dividend Growers

Discovering Dividend Growers


Equities tend to perform well during reflation. But those investors seeking the extra boost of income should explore what we call ‘dividend growers’.
Europe, for example, is a hub of dividend growers – companies boasting a clear track record of steadily rising payouts to shareholders, and the capacity to continue to raise dividends over time. They offer the compelling combination of growth for your portfolio but also higher dividend income streams.

Fixed Income Finds


Fixed income is also a source of reliable income. Yes, traditional government bonds do struggle during reflation, and it can be harder to squeeze income from bond investments. But higher income can be obtained in the right places.
Asia provides attractive alternatives to traditional fixed income, including emerging market sovereign bonds which can offer higher yields than developed market debt. It’s also home to corporate debt which delivers steady incomes, upside from global growth revival, and higher yields that can offer protection against rising rates and inflation.
Fixed Income Finds
Best of all worlds

Best of all worlds


Selective positioning in other markets, or looking beyond traditional income equities and bonds can help provide further support in achieving your income goals.

Casting a wider net for better income

Singaporeans are on a quest for income. But global market uncertainty and a new reflation – a return to global growth that offers both opportunities and challenges like inflation – can mean that income is harder to come by.

Stocks, bonds and property are the bedrock of Singaporeans’ income investments. But they are not the only sources, and for those prepared to cast a wider net, the income rewards can be significant.

A range of non-traditional income assets—including infrastructure, preferred securities and mortgage-backed securities—are now available to investors and can provide regular, reliable income sources and elevate the chances of reaching your financial goals.

Mortgage Backed Securities

Mortgage Backed Securities


Mortgaged backed securities (MBS) are a way of diversifying income while still having access to liquid assets that typically have a lower correlation to ‘risk’ assets like equities.
MBS’s include residential mortgaged-backed securities (RMBS) that earn cash flows from pools of mortgaged loans. Commercial mortgage-backed securities (CMBS) are secured by commercial property mortgages.

Infrastructure Strength


Infrastructure generates stable and reliable cash flow streams, often paid out as regular dividends, from economic bedrocks such as utilities, toll roads and communications towers.
Infrastructure’s long-term stable cash flows not only produce solid and reliable income streams but also underpin protection against challenging market conditions.
Infrastructure Strength
Preferential Treatment

Preferential Treatment


Preferred securities typically offer higher yields than ordinary shares and corporate bonds. A cross between a stock and a bond, they also offer more protection than ordinary share because a specified dividend is not at the mercy of a company’s directors, and most importantly, dividend payments to preferred security holders take priority over common shareholders.

Your on-the-ground team

You need an investment team with deep local knowledge, on-the-ground resources, and experience to navigate the world of traditional, and non-traditional income. A team that can seize the right opportunities to maximise your income while carefully managing risk.

 


Think Income. Think BlackRock.