*Official* Shiny Things club - Part 2

[swordsly]

Why is the POSB invest-saver the cheapest way to buy Singaporean ETFs? From their website, "A sales charge of 0.82% will be deducted from your investment amount into the Nikko AM Singapore STI ETF every month." and "A sales charge of 0.5% will be deducted from your investment amount into the ABF Singapore Bond Index Fund every month.", this seems much higher than what I would be paying via Standard Chartered's 0.20% assuming a single trade per month.

Hope to get some clarification, sorry in advance if I am missing something here.

SCB has a minimum of $10 trade fee (before GST) if you are a non-priority banking customer.

For POSB-IS, even though the fee is 0.82% & 0.5% respectively, there's no minimum fee so you can purchase in smaller amounts.
(And really, it is really only meant for small investments)

You'll need to do some math to find when are they more suitable for yourself.

 

[flowerpalms]

Why is the POSB invest-saver the cheapest way to buy Singaporean ETFs? From their website, "A sales charge of 0.82% will be deducted from your investment amount into the Nikko AM Singapore STI ETF every month." and "A sales charge of 0.5% will be deducted from your investment amount into the ABF Singapore Bond Index Fund every month.", this seems much higher than what I would be paying via Standard Chartered's 0.20% assuming a single trade per month.

Hope to get some clarification, sorry in advance if I am missing something here.

What is your investment amount that you DCA every month? We are looking more at the amount rather than comparing which broker to go with and with RSP or not.

If your monthly investment is less than $1000, the broker to invest with used to be the MBKE MIP. But since it has discontinued, the best alternative that Shiny has mentioned before several times is the POSB Invest Saver aka RSP. Do note that RSP is not ideal which also mentioned in the book.

- higher fees
- more work when you have to adjust your DCA regularly due to RSP is automatic deduction so when it comes to 1 asset per month and to the furthest from target, more monitoring when RSP is recurring, you need to open and close regularly. thats gonna take more time
- not the best choice of local stock and bond because for POSB RSP there is no ES3 and MBH but they work with G3B and A35

However, if you invest in $1000 or more per month
the RSP component can be ignored. You simply go with SCB for your local stock and bond, and IB for your global stock

 

[chickenessence]

Currency exchange effects on IWDA:

Did a quick search and found some discussion in post #2439 to 2442..
But sorry as I would like to all further on this.

Is there another ETF similar to IWDA but in other currency like GBP / EUR but dividend also accumulating?
Should we be concerned that if USD-SGD fall in value while our holding in IWDA (USD) getting higher and higher (but loses investment in currency exchange..)

Thanks.

 

[Kenken88]

Hi ST and experts,

I have bought your book and read thru it. So simple and easy to understand.

I am 31 this year and have just started investing. I have a total of $300/mth to invest. I see that I have to allocate 40% in local, 40% in global and 20% in bond. For the local stock I used POSB-IS to buy G3B. So for 1st month, I will invest $300 onto G3B. For global stock I will use standchart, 2nd month I will invest $300 onto IWDA. For local bonds I will use OCBC-BCIP, 3rd month I will invest $300 onto MBH. After that local stock again and so on to achieve the correct allocation.

My question is this method alright for me? Also I know that POSB-IS can stop the rsp after I invest in it. But I have no idea whether OCBC-BCIP can be stop.

Your book said that to only invest in the less fee. So am I doing it right? For standchart the min fee to invest is $10 so no point for me to invest MBH there. I see that OCBC-BCIP is cheaper. Correct me if wrong. Thanks

 

[poppinglenny]

Hi, I have just started exploring new brokerages after MBKE closed their Monthly Investment Plan, and after reading ST's book I see SCB being touted a lot for buying overseas stocks.

After some research I notice Saxo has a comparable, if not lower commission fee (0.08%/SGD 10 for SGX and 0.06%/USD 4 for NYSE). Is there any reason not to go for Saxo over SCB?

 

[Shiny Things]

Recently I’ve been thinking:
i) I DCA a total of 800$ a month by splitting 300$ IWDA, 300$ STI, and 200$ ABF, would it make more sense to DCA 800$ alternating into IWDA, STI, ABF to save on the fees?
ii) For the 0.2~0.3% expense ratio (hey fund managers gotta be paid), how do we pay them?

Thank you.

1) Yep, that absolutely does make sense.
2) The fund manager debits their expense ratio from the fund each day. You don't pay anything; the fund pays the fund manager. (Fund managers gotta buy their Ferraris, am I right?)

Speaking of this - how does dual-listing work for single stock or ETF (like IWDA listed in LSE, Euronext etc)? Will one affect another?

Sorry for the dumb question.

It's not a dumb question at all, it's a great question. Dual-listed stocks trade in line with each other - market-making firms will move their bids and offers for each listing based on movements in the other listings.

Generally for small investors, none of this matters; it's just an interesting feature of the markets. It matters in odd cases like Shell's dual-listed shares between London and Amsterdam, where the shares have different tax treatments; but for IWDA it doesn't matter.

this seems much higher than what I would be paying via Standard Chartered's 0.20% assuming a single trade per month.

Hope to get some clarification, sorry in advance if I am missing something here.

Yeah - you're missing the minimum brokerage fee. Stanchart is 0.2% with a $10 minimum;POSB-IS has no minimum fee, which makes it great for new investors who just want to invest a few hundred dollars a month.

Is there another ETF similar to IWDA but in other currency like GBP / EUR but dividend also accumulating?
Should we be concerned that if USD-SGD fall in value while our holding in IWDA (USD) getting higher and higher (but loses investment in currency exchange..)

No, you don't need to be concerned about this. If the listing currency strengthens or weakens, then on the one hand, you'll make (or lose) money on the currency exchange, but the value of the shares inside IWDA changes to exactly offset it.

Hi ST and experts,

I have bought your book and read thru it. So simple and easy to understand.

Thanks for the kind words!

My question is this method alright for me? Also I know that POSB-IS can stop the rsp after I invest in it. But I have no idea whether OCBC-BCIP can be stop.

Yep, your method is right.

Are there any jarring difference between MBH and A35?

Nope. MBH has a slightly different mix of bonds - it's more bonds issued by banks and such - which have a slightly higher interest rate.

 

[Tiger9119]

Hi, I have just started exploring new brokerages after MBKE closed their Monthly Investment Plan, and after reading ST's book I see SCB being touted a lot for buying overseas stocks.

After some research I notice Saxo has a comparable, if not lower commission fee (0.08%/SGD 10 for SGX and 0.06%/USD 4 for NYSE). Is there any reason not to go for Saxo over SCB?

Did you check whether Saxo has any custody fee?

From Saxo:

For accounts holding positions in Stocks, ETFs and Bonds, an annual custody fee of 0.12% will apply, except for instruments listed on the Singapore Exchange, where no custody fee will be charged.

The custody fee will be calculated daily using end of day values and charged on a monthly basis.

https://www.home.saxo/en-sg/investor/pricing#custodyfee

 

[Shiny Things]

Hi, I have just started exploring new brokerages after MBKE closed their Monthly Investment Plan, and after reading ST's book I see SCB being touted a lot for buying overseas stocks.

After some research I notice Saxo has a comparable, if not lower commission fee (0.08%/SGD 10 for SGX and 0.06%/USD 4 for NYSE). Is there any reason not to go for Saxo over SCB?

Saxo charges custody fees - 0.12% per annum of the account value. That's absolutely unacceptable; it's a shameless fee grab.

 

[flowerpalms]

Wow truth be told, IB is not easy to use. But if you are going to use IB for your IWDA, there's no shortcut so you have to hands on and go through the pain points.

For new users of IB, the book provides some great step by step instructions to follow.But there are still some hidden grey areas not mention in the book which i would like to share with you. Not to worry, if at any point you are unsure, open up your support chat and contact the IB representative.

1. Screenshots in the book to enter an order is slightly different now from what we see in the platform. Follow the instructions in the book for the options to choose. For example, NBBO price mentioned in the book is now shown as the bid and ask price. Take note for IB you need to do the FX conversion first before entering your order for IWDA.

2. This point is more critical. In order to view the current price for IWDA in the platform, you will need to subscribe to the market. There are 2 options to choose.
- LSE group data bundle Waived
- UK LSE equities as charged

Choose the data bundle option but do note that for first time subsciptions, you need to have minimum USD 2000 in your account before IB can approve the subscription. Subsequently, after you have subscribed to the data, you need to maintain a balance of minimum USD 500 in your account to continue viewing the NBBO prices for IWDA when you enter the order.

The current LSE group data is waived until September 2020 for asian country and non professional account I am not sure if IB will charge after Sept 2020, but since it is 1 year from now, maybe someone can suggest alternative by then.
So once you have done your market data subscription, everything will flow when you follow the book and/or use the support chat for help.

 

[flowerpalms]

To add on,

New users of IB, hands on, dont rush the process because lots of details in IB rules and platform.

Follow the book instructions and take note of the market data subscriptions. For the USD 500 subsequent balance, once you invest 1k into IWDA, you can then top up the next investment so that is fine.

I spent 2.5 hours figuring this out and chatting online with the IB representatives, with the book opened beside me to guide me along. It is useful.

 

[kram62]

Note that in general, you don't really need to pay for a market subscription. You can get enough snapshot prices for free. They cost usd 0.01 for US stocks, usd 0.03 for others, and the first USD 1 will be waived each month.

If you get subscription with fee waived that's nice. But when the subscription becomes charged again, the snapshot will suffice for a simple passive investor.

 

[flowerpalms]

Subscription is waived now until Sept 2020 for the LSE group data bundle.

But need to have mininum USD 2000 account balance for your subscription to be approved, followed by maintaining USD 500 minimum in order to continue viewing the NBBO price for IWDA

Which means it can be something like if you need the money, after your subscription has been approved, you can transfer the USD 2000 back to your personal bank account

As for USD 500, it is less of a worry because once you have put in your 1k investment, you will replace your account with your 1k for the next month investment. So you should be able to continue seeing it

Note that in general, you don't really need to pay for a market subscription. You can get enough snapshot prices for free. They cost usd 0.01 for US stocks, usd 0.03 for others, and the first USD 1 will be waived each month.

If you get subscription with fee waived that's nice. But when the subscription becomes charged again, the snapshot will suffice for a simple passive investor.

 

[justwakeup]

Why need market data subscription? Price can be higher or lower anytime right?

 

[kram62]

Why need market data subscription? Price can be higher or lower anytime right?

Unless you are trading, I think don't need it.

A snapshot just before placing order for monthly DCA is enough. Google quote also good enough for our purpose (it's not a few cents difference now that will have any impact over decades of holding).

 

[justwakeup]

Unless you are trading, I think don't need it.

A snapshot just before placing order for monthly DCA is enough. Google quote also good enough for our purpose (it's not a few cents difference now that will have any impact over decades of holding).

Ya all the while i use google quote for reference, so far so good

 

[flowerpalms]

Well according to Shinys book, you need the NBBO for the best price in the market which we have to pay attention to because it affects how much shares we can buy

Unless you are trading, I think don't need it.

A snapshot just before placing order for monthly DCA is enough. Google quote also good enough for our purpose (it's not a few cents difference now that will have any impact over decades of holding).

 

[justwakeup]

Well according to Shinys book, you need the NBBO for the best price in the market which we have to pay attention to because it affects how much shares we can buy

But tomorrow’s rate might be better, the day after might be even better? Unless you can predict, i dont think it is necessary. I just fix a date, then just buy on that day. Follow the book, like u always say

 

[limster]

Well according to Shinys book, you need the NBBO for the best price in the market which we have to pay attention to because it affects how much shares we can buy

does Shiny's book use NBBO in the context of London Stock Exchange? or are you confusing US and UK markets?

one would have thought that the NBBO concept only applies in a case where there are multiple national exchanges (Chi-X is a european exchange based in UK, not really a national exchange)

 

[flowerpalms]

Shiny's book uses NBBO for IWDA LSEETF in IB

Refer my screenshot in my earlier post. The bid and ask price supposed to be NBBO but prices are missing, which according to the IB rep, is because i did not subscribe to the LSE market data (although its waived until Sept 2020)

Which means if i dont subscribe, i wont be able to see the NBBO best market price in IB which is key to entering the order. At least thats what Shinys book mention about it

does Shiny's book use NBBO in the context of London Stock Exchange? or are you confusing US and UK markets?

one would have thought that the NBBO concept only applies in a case where there are multiple national exchanges (Chi-X is a european exchange based in UK, not really a national exchange)

 

[flowerpalms]

If i remember correctly, when i put in my investment for ES3 in SCB, there is also a market price to buy the shares in the online trading platform. I dont have to look for the rates elsewhere.

Thats why i was surprised why the prices are missing for IB. I would like to know more about the subscription too if that is really needed to get IB's NBBO price.