Recommended Dividend Paying Unit Trusts for Retiree

Hi anon,

​

I personally prefer to examine your income requirements before deciding which UT to go into.

​

As you can tell, there are plenty of UTs on the market that pay dividends, some monthly, some quarterly.

​

You need to understand the underlying holdings of the fund, the income source can be from fixed income, equity or both. Also, the way the fund pays income is important. If a fund's underlying yield is 5% and they are paying 7% dividends, then it's obvious that capital gains are paid out as well, if not, 7% yield cannot be achieved.

​

If a fund is paying 4% yield, but has capital appreciation over the years, then your 4% dividend will eventually grow (absolute amount wise) along with capital appreciation. This is what is termed as "total return". And to me, that is one of the most important metrics to evaluate a fund. Fund level fees are not something you can influence, but if a fund outperforms after fees, do you really think the fees will be your biggest concern?

​

Of course, you could be fine with capital depreciation as long as you get your income. But be aware that over time, if a fund pays 7% with capital decumulation, your income will drop towards the tail end of your retirement. Some people are ok with that. Some are not.

​

On top of that, a good fund now, may not be a good fund in 10 years. So for someone who has no desire to monitor, it is actually not advisable to just buy and leave it to the fund managers. You still need some level of monitoring.

​

And lastly, if you don't need to take risk on your monies to get income, then why would you?

​

I won't be making any recommendations here, although I hold multiple income generating UTs as well, on top of managing UT portfolio for clients. You really need to understand your needs, and then you will know which UT may suit you. Just because I have a high yield bond fund paying 7% does not mean that you should have it too.

​

To end off, you can always buy funds on POEMS with zero sales/switching/platform charges. But you get what you pay for, you are supposed to monitor them on your own, and you decide what you want to buy on your own. If you want continous monitoring for peace of mind, then you'll have to speak to an advisor, and there'll be some kind of advisory fee involved for the work done.

The unit trust i own in my dividend portfolio. Pay out a fixed DPU of 0.06. Dividend yield of 7% p.a. payout monthly. If you focus on income.

Allianz fund AM version

https://secure.fundsupermart.com/fsm/funds/fact...

​

Allianz fund AMg2 version

https://secure.fundsupermart.com/fsm/funds/fact...

​

If you looking for growth + income. Increasing DPU YoY. Currently 5%+, dividend will vary a little. Payout monthly. I used to own it, that time only 4%+. I switched to above because of the 7% dividend, maybe i can add back my portfolio if it hit 6%.

​

UOB fund

https://secure.fundsupermart.com/fsm/funds/fact...

​

Below is the Allianz income & growth (AM version)

https://markets.ft.com/data/funds/tearsheet/cha...