Friday, May 4, 2018

Reflections - My performance investing into CapitaMall Trust

Recently I liquidated my position in CapitaMall Trust at 2.08 per unit for my home purchase. I had bought 5000 units at 1.875 each at the end of November 2015. Originally I had intended to hold for many years to come. I achieved total gain of 24.6%. Annualised over 2.5 years, that is 9.84% per annum.

Why I bought CMT
- Interest in income investing and developing passive income.
- Business is easy to understand. 
- Confidence in business as I visit their malls often.
- It was going for slightly under NAV due to fear from the impact of rising interest rate.

Comparison to SPDR STI ETF
Now I'm going to do the same thing I did for reflecting on my performance investing into Cache Logistic Trust. 5000 units of CMT at 1.875 will cost about the same as 3180 units of SPDR STI ETF back then. Let's do a comparison for if I had chosen to buy 3180 units of STI ETF instead.

Units purchased
Purchase price per unit
(include comm)
Period held (years)
Yield on cost
Overall gain from distributions
Annualised Capital Gain on cost
Overall Gain from Capital Gain
(Include Comm)
Annualised Overall Gain
Total Gain

Similar to my performance investing in Cache Log Trust, it underperformed SPDR STI ETF in the same period. Unlike Cache Log Trust, I felt I did great for my entry point. I think it's fair to conclude that in a bull market, REIT have a tendency to underperform the market.

Given my original goal was to hold for long-term (CMT is something I am comfortable holding for a decade or longer) let's also revisit this a few years down the road. Even on a shorter term outlook, I'm confident CMT will see a valuation in line with Fraser Centrepoint Trust after Funan comes back online (pun not intended - Funan was an IT mall).

What I could have done better
CMT hit its high above 2.20 in around end July 2016. This would give me another 7.8% of capital gain (About 5.5 quarters or 1.38 years of distribution). In comparison, the SPDR STI ETF was at 2.86 (a loss!). I had a hunch the stock was overbought during then.

True enough it corrected later on and fell to levels where I would be happy to buy again between Nov-Dec 2016. This is a potential form of opportunity cost right there. I guess, even as a buy-and-hold investor, there are times where it is appropriate to sell off in anticipation of a correction.


  1. Hi Marskman

    I feel its a good divestment there at $2.08.

    CMT has always traded in range and it is more beneficial than to hold it over the long term.

    1. Hi B,

      I'm pleased to have you here - avid reader of your blog here. :)

      I agree to some extent but was reluctant to divest as I liked the distribution yield - probably more to do with setting personal criteria at what point to let it go at relative to its yield.

      At the same time I also feel there is significant upside after Funan starts to contribute again so it's kind of a pity I had to let it go so soon. Haha.