Purplestars
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It's almost may now, but A35 price is still lower than what I bought at last may
Thanks Shiny & Revhappy,
because the price drop from 1.172 (end Dec 2017) to current 1.115 which it about 4.8% drop and the yield definitely not in that figure, so trying to understand why?
It's almost may now, but A35 price is still lower than what I bought at last may
Suppose stock X have a bid-ask of 1.0 and 1.2, and I want to buy at 1.1 preferably. But in the unfortunate event of upwards spiralling price, I want to buy between 1.3 and 1.4, not any higher.
So I should
1) Make a LMT buy order of X at 1.1
2) Make another STP LMT buy order of X at 1.3 (stop price) and 1.4 (limit price)?
3) Combine 1) and 2) with One-Cancels-the-Other?
Hi, I have a hypothetical question on order types.
It will really help in my understanding ...
Suppose stock X have a bid-ask of 1.0 and 1.2, and I want to buy at 1.1 preferably. But in the unfortunate event of upwards spiralling price, I want to buy between 1.3 and 1.4, not any higher.
So I should
1) Make a LMT buy order of X at 1.1
2) Make another STP LMT buy order of X at 1.3 (stop price) and 1.4 (limit price)?
3) Combine 1) and 2) with One-Cancels-the-Other?
Is there any simpler way of doing the above, with 1 buy order perhaps?
Not sure if it makes sense lol sorry ... thanks!
Hi, I have a hypothetical question on order types.
It will really help in my understanding ...
Suppose stock X have a bid-ask of 1.0 and 1.2, and I want to buy at 1.1 preferably. But in the unfortunate event of upwards spiralling price, I want to buy between 1.3 and 1.4, not any higher.
So I should
1) Make a LMT buy order of X at 1.1
2) Make another STP LMT buy order of X at 1.3 (stop price) and 1.4 (limit price)?
3) Combine 1) and 2) with One-Cancels-the-Other?
Is there any simpler way of doing the above, with 1 buy order perhaps?
Not sure if it makes sense lol sorry ... thanks!
The interest rate sensitivity of a bond fund is directly proportional to its duration. This fund is a medium term bond fund with modified duration of 6.7 years. So it is it kind of expected that in the short term you will see losses of this magnitude when interest rate rises so much.Thanks Shiny & Revhappy,
because the price drop from 1.172 (end Dec 2017) to current 1.115 which it about 4.8% drop and the yield definitely not in that figure, so trying to understand why?
Btw, I just setup my RSP with POSB-IS for G3B, seems like the sales charge is no longer 1% with no minimum....
It's now 0.82% with no minimum!
The lesson learnt is to stick your money in a safe bank account for a guaranteed 3%.
Bond prices have a tendency to move in the opposite direction of interest rates.
The interest rate sensitivity of a bond fund is directly proportional to its duration. This fund is a medium term bond fund with modified duration of 6.7 years. So it is it kind of expected that in the short term you will see losses of this magnitude when interest rate rises so much.
If you don't want to see big swings in your bond fund, it should be very low duration like 1 year.
So this ABF bond fund over a period of time, will give you stable returns. It is just volatile in the short run.
Sent from Xiaomi REDMI NOTE 4 using GAGT
This is what I got from Google:you can get guaranteed 3% in bank account? how?
i was thinking about SSB vs A35. after some digging, looks like this being already discussed before.
https://forums.hardwarezone.com.sg/money-mind-210/*official*-shiny-things-club-4866757-594.html
Thanks for reminding this noob
so let's have a scenario where one already fully allocated in A35-STI-IWDA portfolio... no more DCA just bi-annual re-balancing
since A35 being bought at higher prices, and let's say with raising interest rates bond prices will get progressively lower. how will this affect A35 value 6.7 years down the road?
or maybe am just overthinking ....
No, it doesn’t mean that. Interest rates could continue to rise, and the fund’s share price will thus continue falling and still be lower at the end of that 6.7 year period. Approximately half the bonds the fund currently holds (in value terms) have a longer maturity than 6.7 years, so that’s how it works.This means over a period of 6.7 years you will definitely get a yield of 2.49% per annum and your principal back.
I get your point now. I think the main reason for this deviation is big variance is duration between various bond constituents of the ETF.No, it doesn’t mean that. Interest rates could continue to rise, and the fund’s share price will thus continue falling and still be lower at the end of that 6.7 year period. Approximately half the bonds the fund currently holds (in value terms) have a longer maturity than 6.7 years, so that’s how it works.
Moreover, unless that yield to maturity is adjusted for fund management expenses (probably not), fund dividends will be lower.
Let’s just make it simple: a bond fund does NOT offer guaranteed principal. There is principal risk in a bond fund, and for much longer than 6.7 years for A35. If you want guaranteed (by the AAA rated Singapore government) principal, there are two ways: (a) buy SSBs directly, or (b) buy Singapore Government Securities (either at original auction or on the secondary market), and hold them to maturity.
you can get guaranteed 3% in bank account? how? [
eh... ultimately this is made up of bonds and the returns that bonds make is mainly off coupons, not capital gains...
Hope no one is expecting a significant long term ETF price increase for any bond ETF, (at least those that distribute all coupons out). That is just expecting the impossible
No, that's not how it works either.Bond funds, typically have most instruments of similar maturity, so a medium duration bond fund will have instruments maturing in 5 years +/- 1 year. So in this case the principal return is more or less assured as those maturing bonds are redeemed at par value.
Anyway, to net it out, when you invest in a bond fund you have neither principal nor face value assurance. You do have principal risk, some. You have less principal risk if the fund holds shorter maturities compared to a fund that holds longer maturities, but you always have some principal risk. With individual bond purchases, no, you don't have principal (face value) risk, except the remaining, baseline risk of bond default (very, very unlikely for a AAA rated sovereign -- the most unlikely default among Singapore dollar denominated possible defaults -- but statistically that's a non-zero probability). That's an important difference between holding bonds directly and investing in bond funds.
When you say “both accounts” do you mean that you opened an SGD e$aver account and a USD online trading account at the same time?
Am I right to say that the best brokerage(fee wise) for the respective investing amount is as follow?
<=$500: POSB Invest Saver (1%, no min)
>$500 to <=$3333: OCBC blue chip (0.3%, $5 min)
>$3333: SCB (0.2%, $10 min)
There are a couple of bank accounts in Singapore that gives 3%. Before anyone goes "waahh there are requirements you have to meet", do some homework on this forum and you will realize there are many Tricks you can use to overcome the hurdles.