Hi tigers!
Today, I'd like to introduce you to a beginner-friendly, low-volatility, and regularly dividend-paying investment: Dividend Funds.
Additionally, I'll also show you how to get two significant streams of cash flow! Ready to learn how? Let’s dive in:
1. Choose Dividend Funds to Earn Your First Stream of Cash Flow
1.What Are Dividend Funds?
Dividend funds are investment funds that regularly pay dividends to investors. They typically invest in assets that generate steady income, such as bonds, high-dividend stocks, and Real Estate Investment Trusts (REITs).
The returns from dividend funds primarily come from two sources: capital gains and dividends.
Capital Gains: These are the profits made from the appreciation of the fund’s assets in the market.
Dividend or Interest Income: This refers to the dividends or interest paid by the stocks or bonds held by the fund.
Dividends are a key feature of dividend funds. Simply put, they regularly distribute the income generated (monthly, quarterly, or annually) to investors in the form of cash. This income might come from stock dividends, bond interest, or other investment returns.
By choosing dividend funds, you can receive a steady stream of cash flow regularly.
Moreover, you can opt to reinvest these dividends back into the fund to purchase more shares, thus achieving compound growth.
What About the Risks?
The risk level of dividend funds generally depends on their investment portfolio. Funds that invest primarily in high-yield bonds or high-dividend stocks may carry higher market risks. Conversely, those investing in government bonds or high-credit corporate bonds tend to have lower risks.
In summary, dividend funds are suitable for investors looking for stable income streams and less capital volatility.
2. How to Choose Dividend Funds？
It’s simple: you can select funds based on your risk tolerance.
Let’s consider two examples: Allianz Income and Growth Fund (LU0943347566) and PIMCO Income Fund (IE00B9HH6X13).
1. Aggressive/Moderate Investors ➜ Equity-Focused Dividend Funds
Equity-focused dividend funds invest a portion of their holdings in the stock market, aiming to distribute surplus income at relatively high levels to investors. Compared to non-dividend-paying equity funds, these offer more stable returns, making them suitable for aggressive or moderate investors.
Example: Allianz Income and Growth Fund (LU0943347566)
Open the Tiger Trade app, search for the fund code “LU0943347566,” and check the fund details and holdings (as shown in the picture).
Here’s what we can deduce:
The fund’s asset type is mainly bonds, resulting in relatively low underlying asset volatility.
The sector allocation is well-diversified, mitigating stock volatility.
The fund’s investment is primarily in the mature U.S. market, which is less volatile than emerging markets.
With a balanced approach to stocks and bonds, the Allianz Income and Growth Fund can be both defensive and offensive, making it a good choice for those wanting a bit more aggressiveness with stable dividends.
2. Conservative Investors ➜ Bond-Focused Dividend Funds
Bond-focused dividend funds aim for fixed income, generally offering lower risk and volatility than equity funds. If you prefer a "set it and forget it" approach and want steady, continuous dividends, bond-focused dividend funds are a great option.
Example: PIMCO Income Fund (IE00B9HH6X13)
Open the Tiger trade app, search for the fund code “IE00B9HH6X13,” and check the fund details and holdings (as shown in the picture).
The PIMCO Income Fund is heavily weighted towards bonds, with a net asset ratio of 194.76%, while stocks and other assets make up only 1%, primarily in less volatile sectors like real estate and finance.
Overall, the PIMCO Income Fund is essentially a "pure bond fund," with a dividend yield of 5.93% and a monthly payout frequency. It’s ideal for investors who want to avoid capital volatility and receive a steady monthly cash flow.
2.Use DDA to Set Up RSP for Your Second Stream of Cash Flow
1.What is DDA Quick Deposit?
DDA (Direct Debit Authentication) Quick Deposit is a service provided by DBS Bank that allows you to link your Tiger International account to your bank account. Simply put, it's a fast and easy way to deposit funds directly into your Tiger account from your bank account.
Here are the advantages of using DDA Quick Deposit:
Free of Charge: DDA authorization and deposits are free.
Efficient: Funds are typically available within minutes (there might be delays outside of bank working hours).
Convenient: You can submit quick deposit instructions via the Tiger International app or website without needing to log into your bank.
Direct Fund Purchases: You can pay directly from your bank account to purchase funds.
How to use:
Click on the details page of any fund you want to subscribe to > click the "Subscribe" button
Click "Payment Method" on the purchase page.
Add the DDA bank account you want to use in the pop-up payment method window. You will see the maximum amount per transaction below your bank account.
If you have not bound a bank card that supports DDA, please select "Add Bank Account" and follow the instructions on the page to go through the card binding process.
After all of the above, you will be on the following page:
If this purchase involves foreign currency exchange, "Auto-Converted Allowed" would show up below your selected bank account.
Type in the amount that you want to subscribe to. You can refer to the minimum starting amount of deposit currency and estimated amount of converted currency below "Subscription Amount".
Click Additional Terms for Fund Services and Risk Disclosure. After reviewing it, please check the box ahead.
Click "Submit Subscription".
Now you can complete the fund subscription through DDA.
2. Link DDA and Set Up regular savings plan (RSP) for Your Second Stream of Cash Flow
Once you have linked your DDA, you can set up automatic fund investments to generate your second stream of cash flow!
1.How to Set Up regular savings plan (RSP)?
How to use:
Click on the details page of any fund you want to subscribe > click the "RSP" button
After that, you will be on the page below:
Type in the amount that you want to subscribe to. You can refer to the minimum starting amount of deposit currency and the estimated amount of converted currency below "Subscription Amount".
Click "Payment Method" on the RSP purchase page> add the DDA bank account you want to use in the pop-up payment method window. You will see the maximum amount per transaction below your bank account.
If you are not bound to a bank card that supports DDA, please select "Add Bank Account"and follow the instructions on the page to go through the card binding process.
After all of the above, you will be back to the purchase page. If this purchase involves foreign currency exchange, "Auto-Converted Allowed" will appear below your selected bank account.
Click "Frequency">select the frequency for your RSP by rolling the tab into the dark grey area.
Click Agreements and Risk Notice. After reviewing it, please check the box ahead.
Click "Submit RSP". Now you can complete the set of RSP to purchase funds by transferring money from your bank account.
You can also check it in your "RSP Details" page.
2. How to Get Your Second Stream of Cash Flow?
Wondering how to get your second stream of cash flow? It’s simple. Just follow these steps:
A. Link DDA for Quick Deposits
The specific steps are mentioned earlier in this guide.
B. Set Up Automatic Fund Investments of 1000 SGD or More
Once you’ve set up your DDA for automatic fund investments, just ensure your investment amount is at least 1000 SGD. By doing this, you’ll receive six vouchers worth 5 SGD each, totaling 30 SGD! You’ll get one 5 SGD voucher for each successful investment.
For more details, check out the activity link：
https://www.itiger.com/sg/marketing/ddainvestsg?adcode=StockGame2023&lang=zh_CN
Now, follow the above steps to set up your first RSP fund investment!
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