What to invest in using CPF OA ?

Please note I’m not a financial advisor and this is not investment advice. 

In early March, I decided to invest a portion of my CPF OA funds. To make an informed choice, I researched various brokerage options and watched several YouTube videos. After careful consideration, I opted for POEMS, primarily because it provides access to funds with global equity exposure—something CPF funds cannot be used for when investing in individual foreign stocks. While I also considered Endowus, which I already use for my SRS investments, POEMS seemed like the better fit for this purpose.

For those looking to explore CPF investment platforms in depth, I highly recommend checking out Chris @HoneyMoneySG. His YouTube videos offer a comprehensive analysis of the different options available.

Once my account was set up, the real challenge began—deciding where to invest. I had already settled on investing in ETFs or mutual funds but wasn’t sure how to structure my portfolio. Eventually, I landed on a simple allocation: two ETFs and two mutual funds, each comprising roughly 25% of my investment.

My CPF investment strategy was straightforward—outperform the 2.5% OA returns without taking excessive risks with what I consider my “coffin money.” With this in mind, I allocated the first 25% to the NikkoAM SGD IGBond ETF (Ticker MBH). This ETF is designed to mirror the performance of SGD-denominated investment-grade non-sovereign bonds and carries a total expense ratio of 0.26%. Its top holdings consist mainly of bonds issued by large, reputable financial institutions. As of June 7, 2025, it offers a yield of approximately 3.25%.

Source: Nikko Asset  Management

The next 25% of my CPF investment was allocated to NikkoAM-STC Asia REIT (Ticker CFA), a REIT ETF with a total expense ratio of 0.55%. Most REIT investors should be familiar with many of its top holdings, as several are listed on the SGX. LINK REIT, based in Hong Kong, is the largest REIT in Asia by market capitalization, while Embassy Office Parks REIT holds the distinction of being India’s first publicly listed REIT.

As of June 7, 2025, the ETF offers a yield of approximately 5.98%. Both investments were made via FSMOne, which charges a flat fee of $3.80 for SGX ETF transactions, including those funded through CPF.

Source: Nikko Asset  Management

For the remaining 50% of my CPF investment, I chose two Amundi funds that track the MSCI World Index and MSCI Emerging Markets Index. These funds provide exposure to a diversified portfolio of global stocks while maintaining relatively low management fees.

The breakdown of the respective holdings is shown in the table below:

Source: Amundi Factsheet for MSCI World Index

Source: Amundi Factsheet for MSCI Emerging Markets

The table below summarizes the three funds, highlighting their fees and performance. Based on these factors, Amundi Prime US Fund appears to be the better choice.

My decision to invest in the World and Emerging Markets indexes was driven purely by diversification. However, it’s worth noting that the top 10 holdings of the MSCI World Index remain predominantly large-cap U.S. stocks. 

Fund	Amundi Prime USA	Amundi Index MSCI World	Amundi Index MSCI Emerging Markets
Expense Ratio (TER)	0.05%	0.10%	0.18%
1-Year Performance	8.65%	8.56%	7.65%
3-Year Performance	12.11%	10.90%	2.86%
Underlying Index	Solactive GBS USA Large & Mid Cap	MSCI World Index	MSCI Emerging Markets Index
Geographic Focus	United States only	Developed markets globally	Emerging markets globally
Market Coverage	Large & Mid Cap US stocks	Large & Mid Cap developed market stocks	Large & Mid Cap (~85% of free float market cap)

Source: Endowus

So this is the thought process for my CPF investments, no frills, no overthinking, just keep it nice and simple.

Missed Opportunities: Reflecting on Two Overlooked Stocks

This post reflects on two investing opportunities that slipped through my fingers—OKP Holdings and Centurion Corporation. Pls note this is not investment advice to buy or sell stocks, so pls do your own diligence when investing.

1. OKP Holdings: A Resilient Comeback

OKP is a well-known construction company in my field. They gained notoriety in 2017 when a viaduct they were constructing (linking Tampines Expressway to PIE and Upper Changi Road East) collapsed, causing their stock price to plummet. However, the company has staged an impressive recovery.

Recently, OKP secured a S$258.3 million contract from the Land Transport Authority (LTA) to build cycling path networks in eastern Singapore, boosting their total order book to S$735.8 million. In fact, they’ve been consistently winning LTA contracts for cycling paths infrastructure—something I noticed firsthand while walking past their construction sites. Unfortunately, despite observing this trend, I failed to track the stock, and the opportunity passed me by.

2. Centurion Corporation: Riding the Post-COVID Demand Wave

I came across Centurion while screening local stocks. The company specializes in purpose-built worker and student accommodations, and its stock has also been on an upward trajectory.

As COVID-19 restrictions eased, Singapore’s delayed construction projects surged back to life, driving demand for foreign worker accommodation. Additionally, with the resumption of Terminal 5 (T5) development, the need for worker accommodations is set to grow further. Once again, I recognized the trend but hesitated to act.

Key Takeaways

Famous investors like Warren Buffett and Peter Lynch advocate investing in what we know best—opportunities we observe in our daily lives and work environments. However, my focus on the US market blinded me to these local prospects.

Hindsight is always 20/20, and even when we spot potential investments, conviction is crucial. Moving forward, I’ll strive to act on such insights—backed by thorough research and confidence in the companies I choose.

Golden Opportunity now ? Buy gold or not ?

Been wanting to buy some gold lately even though gold prices have been on a tear in 2025 and it's currently trading around $3300 USD, up by more than 20% since the start of the year. Since I had some free time on my own last week, I recently decided to drop by Bullion Star and decided to buy a 2.5g Pamp gold bar

I started investing in gold bullion in 2023 by buying gold coins (0.1 Oz). The only reason I chose coins instead of bars that time was purely due to aesthetics reasons as the design of the coins look more attractive. But I have since purchased only PAMP gold bars (2.5g or 5g) as it's more cost effective. I know some prominent investors like Warren Buffet hate investing in gold as it's not a productive asset. But I decided to take a leaf out of Robert Kiyosaki’s advice by investing some money into “God’s Money”, even though I’m not a particular fan of his. 

My philosophy towards financial independence is to take the wisdom of different investors and adjust them towards my risk appetite and personality. I’m not sure how you guys feel, but I just feel the world just seems to be getting crazier with Trump being the current US president and all the conflicts that are happening around us. Hence it is not surprising that central banks around the world have also been significantly increasing their gold purchases, where 1045 tonnes of gold were added to their reserves in 2024. 

My target now is to achieve a gold portfolio of about $10,000 but currently I'm not even at the halfway mark 😂. It will take some time before I can reach the target but it's ok. With regards to my gold investment, I shall take one small step at a time and buy in greater bulk when there is a pullback in gold prices. 

Stock Focus in the Logistics Industry: Kerry Logistics (KLN)

This article is regarding the Hong Kong logistics company Kerry Logistics Network Limited (KLN). I do have shares in KLN and my holdings have dropped by more than 20% and I was very tempted to cut losses or at least to reduce my holdings a few weeks ago. But I managed to hold my temptation and decided to consolidate my thoughts by writing this article before making the decision to sell off the stock of this company. This is not investment advice so please do your own due diligence when investing.

1. Company Overview

Kerry Logistics Network Limited (KLN) is a prominent Asia-based logistics company with a strong presence across Greater China, Southeast Asia and a network spanning 59 countries and territories. KLN used to be part of Kerry Properties (owned by Kuok Group) but was acquired by SF holdings in 2021. Despite the deal, Kerry Properties still holds a significant minority stake of about 20% in KLN.

2. Industry & Market Analysis

The logistics and freight forwarding industry is the backbone of global trade and supply chains, responsible for the planning, execution, and control of the movement of goods, services, and information from origin to consumption. 

Following years of high volatility for supply chains due to the global pandemic, 2024 painted a more stable picture, with many industry indicators returning to pre-COVID levels. The post-pandemic period has seen demand normalize from the artificial highs of 2020-2022, creating operational challenges for logistics companies. There have been several trends observed post COVID with the shift in Just-in-time (JIT) model to Just-in-case (JIC) model (see Appendix for more details on the 2 models). The vulnerability of the JIT model was exposed during COVID as issues like delays, port congestion and supplier shutdowns were the norm during the COVID period. There was no buffer to deal with sudden demand spikes or supply delays. The JIC model, on the other hand, holds extra inventory to buffer at various points in the supply chain to mitigate disruptions. It's a more resilient model, albeit at the expense of higher warehousing and inventory costs. 

With the advancement in AI and digital transformation, the industry will also need to incorporate strategies like integrating operations with advanced AI and machine learning, real time visibility tracking systems and automated decision-making processes. 

Despite the challenges, the logistics industry is positioned for sustained growth and the global freight and logistics market size is expected to reach USD 6376.99 billion in 2025 and grow at a CAGR of 4.99% to reach USD 8136.88 billion by 2030

3. Business Model & Strategy

KLN has 2 main business segments, 1) Integrated logistics (IL) and 2) International Freight Forwarding (IFF). IL involves end-to-end supply chain solutions, primarily warehousing, distribution, and contract logistics. The main key services involve warehousing and fulfillment (storing, packing, and shipping goods from a warehouse to customers), last mile delivery (final step of delivery—from a local distribution center to the customer’s doorstep) and value added services like packaging, labeling and inventory management. 

KLN has a strong Asia Pacific presence and a diversified portfolio with multiple service offerings across different logistics sectors. It is also a market leader in NVOCC (Non-Vessel Operating Common Carrier) through its wholly-owned subsidiary, Kerry Apex. Apex has been able to capitalize on its strong NVOCC leadership position by maintaining its dominance in the key Asia US trade lanes. APEX also offers a full suite of services from ocean and air freight, customs brokerage, to logistics solutions and door-to-door delivery in the U.S. This end-to-end capability differentiates them from pure freight forwarders and the positioning in the Asia-US trade lane is particularly valuable as it represents the world's busiest container shipping route, generating substantial volumes and revenue opportunities while providing a platform for further geographic expansion.

4. Financial Analysis

KLN currently has a market cap of $14.21 billion HKD and the table below shows some of the key financial metrics. Even though KLN registered strong revenue growth, profitability seems to have dropped. This is probably not too surprising as the company is slowly recovering from a challenging 2023 where the industry was greatly impacted by a slower than expected recovery in retail and an increase in operational costs due to global supply chain disruptions. The current PE does seem high as compared to the 5 year average but it is still lower than 2 of its biggest competitors Kuehne + Nagel International (18.5) and DHL (13.76).

Metric	Current	5 year average
PE Ratio	10.19	9.8
Debt / Equity	0.6	0.5
Current Ratio	1.44	1.49
Revenue growth	23%	10.5%
ROE	8.1%	10.9%
ROIC	5.52%	6.3%

Compared to 2023 which saw a 42% and 78% decline in revenues and net profit respectively, 2024 was characterized by a strong recovery with revenue surging 23% to HK$58.27 billion (2023: HK$47.41 billion), core operating profit increasing 23% to HK$2.73 billion, and core net profit growing 12% to HK$1.36 billion.

The drop in revenue in IL business (about 4%) was more than compensated by the strong surge in growth in the IFF business with revenue surging 39% to HK$1.95 billion, benefiting from increased demand in China, the US, Hong Kong, and Asia, higher ocean freight rates amid market supply shortage, and a strong position in the Asia-US trade lane as a leading NVOCC. IL and IFF constitute about 25% and 75% of revenue respectively. The surge in IFF revenue was due to a spike in ocean freight rate triggered by the red sea situation. In terms of geographical allocation, Hong Kong, China and Asia constitute about 58% of revenue.  

5. Investment Thesis

Ecommerce remains a major driver of air freight demand, particularly in Asia-Pacific markets, which will account for 80% of the projected $36 trillion global B2B ecommerce market by 2026, and is expected to grow by 20-25% in 2025 alone. This trend particularly benefits companies like Kerry Logistics with strong Asia-Pacific positioning.

The acquisition by SF holdings will be transformational for both companies, giving SF Holdings the international logistics capabilities it needed for global expansion while providing Kerry Logistics with access to SF's massive domestic Chinese network and resources

In addition, KLN's strong leadership in NVOCC through Kerry Apex provides it with a strong position in critical trade lanes. Kerry Apex massive 500,000 plus TEU annual volume also gives it significant negotiating power with ocean carriers for container space rates. 

6. Risks & Challenges

The global freight industry is undergoing significant regulatory changes which would increase operational costs. For example, the EU emissions trading system for shipping aims to curb CO2 emission by making it mandatory for ships over 5000 GT to pay for CO2 emissions. Another example is the EU's alternative fuels infrastructure regulation which mandates LNG and electric charging at major ports by 2030.

Besides all the new regulation, the global trade tensions and major conflicts do not see signs of abating. To mitigate the risk, alternative shipping routes would be required, and the longer routes and transit times would further push up costs.

China’s slower than expected economic recovery is also seeing significant impact to the global freight industry. China’s slowdown is a sign of deeper issues which involve long term structural shifts in its economy and companies must be able to match the lower demand, diversify its trade lanes and not be over reliant on China and leverage tech to cut costs. Failing which, the company runs the risk of being obsolete in the fast-changing global freight landscape.

7. Conclusion & Recommendation

My current holdings in KLN are down by about 25%. After a strong recovery in 2024, the stock has rebounded but I'm still wary of the global trade risks so I will be closely monitoring the performance of the company in the next few quarters. Probably will not be adding or reducing my current position also. 

APPENDIX

Just in Time (JIT) A Just-in-Time supply chain strategy minimizes inventory by receiving goods only when needed in the production or sales process — no earlier, no later.

Just in Case (JIC) A Just-in-Case model involves holding extra inventory or buffers at various points in the supply chain to mitigate disruptions or demand surges. 

Non-Vessel Operating Common Carrier (NVOCC) A Non-Vessel Operating Common Carrier (NVOCC) is an ocean carrier that transports goods under its own House Bill of Lading, or equivalent documentation, without operating ocean transportation vessels. NVOCCs act as intermediaries between shippers and actual vessel operators. It acts exactly like an ocean carrier, transporting cargo from one part of the world to another, just that it does not own any sea-going transportation vessels

Stock Focus in the Specialty Chemical Industry: Sika

Recently I have been thinking about diversifying some of my equities into Swiss companies. One of the main reasons for the sudden interest in Swiss equities is due to the strength of the Swiss franc and my desire not to be overly concentrated in US equities. The company I'm currently looking at is called Sika, which specializes in the specialty chemicals industry. This is a brand which I'm quite familiar with as it's widely used as an adhesive and sealant chemical in the construction industry which I'm currently working in. Whenever there are waterproofing and concrete bonding works, the name Sika almost always pops out.

Pls note this is not a buy or sell recommendation and do your own due diligence.

1. Company Overview

Sika is a Swiss company founded in 1910 and its headquarters is in Baar. It operates in over 100 countries with 400+ factories and is a global leader in construction chemicals and industrial bonding. The current CEO is Thomas Hasler who has been with the company since 1989.

2. Industry & Market Analysis

The specialty chemical industry which Sika operates in focuses on high-value, performance-driven chemical solutions tailored for specific applications such as construction chemicals (adhesives, sealants, waterproofing, concrete additives) and industrial manufacturing solutions (automotive, aerospace, renewable energy). The trend towards green construction and building more energy efficient buildings and the demand for EV and battery adhesives are just some of the growth drivers. 

It comes with no surprise Asia Pacific dominated the market with a 52.31% share in 2023, driven by robust demand in countries like China and India due to increasing pace of urbanization and infrastructure development. North America and Europe also hold significant shares, with ongoing investments in infrastructure and industrial development. (Fortune Business Insights)

Based on Fortune Business Insights, the specialty chemicals market was valued at approximately USD 627.7 billion in 2023, with projections indicating growth to USD 721.5 billion in 2024 and reaching USD 1,063.4 billion by 2032, reflecting a CAGR of 5.0% during the forecast period.

3. Business Model & Strategy

Sika business operations is divided into 2 main segments: 1) Construction (84% of revenue) and 2) Automotive and Industry (16% of revenue). Some of the construction solutions Sika provides in the construction industry include concrete admixtures for strength and durability enhancement, waterproofing systems, repair and reinforcement of aging infrastructures. Sika products are also widely used in the automotive, aerospace and manufacturing sectors. 

Over the years, Sika has strategically acquired several companies to improve its competitiveness. For example, it acquired Modern Waterproofing Group in 2020 which is a leading Egyptian company specializing in water proofing works to enhance its position in the Middle East and North African region. It also acquired MBCC Group and Kwik Bond Polymers in 2023 and 2024 respectively. MBCC is a leading global supplier of construction chemicals which further expanded Sika's portfolio with innovative, sustainable, and digital solutions across various sectors, including buildings, infrastructure, and underground construction. Kwik is a manufacturer of polymer systems for the refurbishment of concrete infrastructure in the USA. These strategic initiatives and acquisitions demonstrate Sika's commitment to growth, innovation, and market expansion, reinforcing its position as a global leader in the construction chemicals industry.

In summary, the company adopts a 5 pillar strategy for expansion namely 1) Market penetration, 2) Innovation, 3) Acquisitions, 4) Operational efficiency and 5) Sustainability. 

4. Financial Analysis

Sika currently has a market cap of $35 billion CHF and the table below shows some of the key financial metrics. It can be observed that the revenue growth and profitability margins seem to be slowing down. This could be due to weakness in the Chinese construction market (China is a significant market, contributing about 11.6% to the company’s net sales), currency fluctuations of the Swiss franc against other currencies and a challenging macroeconomic environment. 

Metric	Current	5 year average
PE Ratio	28.11	38.35
Debt / Equity	0.82	0.94
Current Ratio	1.77	1.89
Revenue growth	4.67%	8%
ROE	19.2%	23.3%
ROIC	8.8%	10.2%

In 2024, it achieved $11.76 billion in sales (an increase in 4.7%) and an increase of 17.4% in net profit to $1247.6million CHF.  The company announced it achieved sales of $2678 million CHF in Q1 as compared to $2648 million CHF in the previous year. The Americas and EMEA region saw organic growth of 4.9% and 0.7% respectively while Asia Pacific remained flat. Sales increase is expected to be in the region of 3-6% for fiscal 2025. 

In the last 12 months, operating cash flow was 1.74 billion and capital expenditures was 331.10 million, giving a free cash flow of 1.41 billion. Cash and cash equivalents currently stands at 712.9 million CHF. 

Sika does pay a dividend, and the current yield is 1.65% and the payout ratio is 21.25% which suggests there is ample room to increase payout in the future. 2025 payout is 3.6CHF which is an increase of 9.1% as compared to 2024. 

5. Investment Thesis

Sika is a household name in the construction industry and most professionals working in this industry would have heard of it. It's truly a market leader in the specialty chemical industry and it has strengthened its competitiveness over the years through strategic acquisitions as highlighted above. 

Urbanization and the rise of mega infrastructure projects are set to propel global construction demand. Speaking of mega infrastructure projects, look no further than home soil, where Changi Airport T5 is set to commence construction works after a 2-year hiatus. India is also building its first bullet train project spanning 508 km between Mumbai and Ahmedabad. The large demand for infrastructure in India and SEA will soften the blow caused by the slowdown in China’s construction market. 

Additionally, the growing need for data centers—fueled by advancements in AI and cloud computing—will further accelerate the demand for construction. For example, the $110 billion USD Stargate initiative is a massive investment opportunity.

The construction industry's strong emphasis on sustainability, cost efficiency, durability and performance has created a huge opportunity for Sika innovative products. For example, concrete is a material that has a large carbon footprint. Sika has produced several products which reduce CO2 emissions while increasing the material strength and durability. 

Sika is a high-quality, globally diversified company with strong innovation and resilience in construction markets. Its long-term growth prospects in sustainable construction also remain compelling.

6. Risks & Challenges

One of the key risks the company faces is the price of raw materials. Specialty chemicals rely on petrochemicals, resins, and polymers which are highly dependent on oil prices. The prices of raw materials could be further exacerbated by supply chain disruptions. 

The construction and automotive sectors which Sika is heavily dependent on are also highly sensitive to economic cyclicality. In the latest outlook highlighted in Sika media and investor presentation, the company did highlight the continued challenging market environment in the European construction and automotive & industry. It also highlighted the challenging Chinese construction markets as consumer confidence remains low. 

7. Conclusion & Recommendation

I do owe shares in Sika with an average price of 234.2 CHF. Its currently down by about 7% and I will be closely monitoring the performance of the company in the next few quarters. But I believe its a good company with strong financial fundamentals and its a global leader in the specialty chemicals industry  so I will probably continue to average down