*Official* Shiny Things club - Part 2

[hwckhs]

Search for "rich by retirement" on amazon

Or http://richbyretirementbook.com if you just want a soft copy.

 

[Panerex]

Global stocks ETF trading on LSE (via USD) : strong fight between IWDA vs VWRD. Which one do you recommend?

In LSE, any recommended index ETF (via USD) focussing on US S&P stocks? VUSD?

TIA

 

[Panerex]

The earlier version recommends using A35 (ABF Singapore Bond Index Fund) for the bond portion but the new version recommends MBH (SGD Investment Grade Corporate Bond ETF) instead. The latter was launched last year and has a higher yield.

Not sure about other changes.

Comparing these 2 funds against SSB returns which do not vary significantly , from a risk perspective, could it be less risky to invest in SSB?

 

[hwckhs]

Global stocks ETF trading on LSE (via USD) : strong fight between IWDA vs VWRD. Which one do you recommend?

In LSE, any recommended index ETF (via USD) focussing on US S&P stocks?

It is a personal choice, really. IWDA is DM, accumulating; and VWRD is DM+EM (although EM's weight is currently about 10% only), distributing. Total return for the 2 should be similar. For me, I prefer VWRD.

The 2 major ETF providers are iShares and Vanguard. They are good starting points to do your research. You can roughly know which are the more popular ETFs by just looking at the AUM. However, newer ETFs will inherently have lower AUM. We usually want the USD variants. Consider cost too.

Take some time to study the index each ETF is tracking (its composition and weightage etc). Google for the index name. The indices have subtle differences.

 

[Ilovemathstutor]

Hi Shiny,

Since opening my IB account I have spent some time on the client portal figuring out the basics before I fund the account.

I was wondering what your thoughts were regarding cyber security around using the IB platform. I see that the security into accessing your account is your password + OTP. It seems once you can access the account, you can withdraw very large amounts easily (i think the limit is something big 50k).

I have read a few articles on security holes in online trading which scare me.. (unfortunately my post count is too low so I can't link them)

I'm not so familiar with IB - do you know if you can add some additional security layers - or a impose a lower limit on withdrawals?

Furthermore I understand if your account is somehow comprised through a cyber attack, than IB won't be liable for your losses.

However, I understand some other brokers will cover you e.g. Charles Schwab

What are your thoughts around this??

As a side note - I bought and read your book mid last year (great read thanks ) . What does the 2019 edition touch on - is there any new info on other broker options?

sorry, no.
the limit size for withdrawal is not at us$50k...

it is way bigger than that.
what u read on the link on interactive broker's website of daily us$50k withdrawal is if u do not have the security device.

don't ask me what is the cap, I don't know.
but on my trades... upon withdrawal back to my SG bank account, I did not hit any cap and my amount was > us$50k per withdrawal.

hope it helps.

 

[Fcesca]

The earlier version recommends using (ABF Singapore Bond Index Fund) for the bond portion but the new version recommends (SGD Investment Grade Corporate Bond ETF) instead. The latter was launched last year and has a higher yield.

Not sure about other changes.

Hi hwckhs - thanks for the update. I can't find this through DBS regular saving plan -- not available through there?

 

[Fcesca]

sorry, no.
the limit size for withdrawal is not at us$50k...

it is way bigger than that.
what u read on the link on interactive broker's website of daily us$50k withdrawal is if u do not have the security device.

don't ask me what is the cap, I don't know.
but on my trades... upon withdrawal back to my SG bank account, I did not hit any cap and my amount was > us$50k per withdrawal.

hope it helps.

Thanks, yes I did not look at it specifically, in any case those numbers are way larger than I would be comfortable with limiting for security reasons.. One time hacker access could wipe out the whole savings

But what tangent314 said about linking the bank accounts is quite reassuring..

 

[jasonlim1988]

How do u guys set up the trading layout for IB?
Can screenshot and upload here?
I still can't figure out a good layout.

 

[jacky817]

Guys quick question. What's the best way to transfer USD from scb to ib?

Context: I don't have a USD savings account yet. My USD are in my securities trading acc.

I probably know the answer to this one. Just hoping there's a better way out there

 

[Ilovemathstutor]

Guys quick question. What's the best way to transfer USD from scb to ib?

Context: I don't have a USD savings account yet. My USD are in my securities trading acc.

I probably know the answer to this one. Just hoping there's a better way out there

just select your currency as usd when u wire it to their sg bank account.

that's all.

of course, before that... u have to inform them that u are wiring the amount and the currency, so that they don't hit u w money laundering.

 

[BBCWatcher]

Guys quick question. What's the best way to transfer USD from scb to ib?

just select your currency as usd when u wire it to their sg bank account.

No, that doesn't work. Interactive Brokers receives Singapore dollars at their custodial account in Singapore. If you transfer U.S. dollars to that account then, if the transfer goes through, Standard Chartered or Citibank will convert the currency at an unfavorable rate.

U.S. dollars at Standard Chartered in Singapore are "strange." Unfortunately Standard Chartered is going to extract its tribute from them, somehow. You would need to wire them to IB's custodial account in New York.

 

[paythel]

Hi, was wondering what the views were on bond-components for the average SG investor's portfolio?

Most advice seems to suggest relying on the SG government, whether CPF, ABF, MBH.

I mean, if I really had to pick a single sovereign to be exposed to, I wouldn't complain too much about Singapore. But surely the approach should be the same as equities? Cast a wide net?

So if geographic diversification was a concern of mine, would AGGU on the LSE be appropriate? Ireland domicile for tax-advantage, passive, low (0.1%) expense ratio, currency hedged (USD, but SGD is sort of linked anyway), global reach (unfortunately still just developed world), split between sovereigns and corporates, many (3000+) holdings, accumulating, etc. Alternatively, there's IGLA, which narrows it to G7 government bonds, with a still acceptable (0.2%) expense ratio.

Thoughts, experts?

Thanks!

 

[tangent314]

Hi, was wondering what the views were on bond-components for the average SG investor's portfolio?

Most advice seems to suggest relying on the SG government, whether CPF, ABF, MBH.

MBH is corporates, not government

I mean, if I really had to pick a single sovereign to be exposed to, I wouldn't complain too much about Singapore. But surely the approach should be the same as equities? Cast a wide net?

As we approach retirement age we want more stability and less volatility, which is the why we increase the bond portfolio percentage, and use bonds that are in the currency where we are retiring in.

 

[sbladerz]

Hi guys, can someone enlighten me on the brokerage fees & trading charges for the investment made using SRS? is it the same fee as using cash investment? thanks

 

[tangent314]

For the platforms that support SRS, I have not seen any charge different between cash or SRS. You should probably check with the platform you are using just to be sure.

 

[unhinged_loon]

In LSE, any recommended index ETF (via USD) focussing on US S&P stocks? VUSD?

TIA

VUSD or CSPX.

Comparing these 2 funds against SSB returns which do not vary significantly , from a risk perspective, could it be less risky to invest in SSB?

MBH:
https://www.nikkoam.com.sg/files/documents/funds/fact_sheet/sgd_ig_corp_bd_etf_fs.pdf

YTM: 3.14%

A35:
https://www.nikkoam.com.sg/files/documents/funds/fact_sheet/abf2_fs.pdf

YTM: 2.38%


~30% higher yield ((3.14-2.38)/2.38).

 

[hwckhs]

MBH:
https://www.nikkoam.com.sg/files/documents/funds/fact_sheet/sgd_ig_corp_bd_etf_fs.pdf

YTM: 3.14%

Nice! Didn't know the expected return is there. Very useful for a new fund like MBH.

 

[BBCWatcher]

For the platforms that support SRS, I have not seen any charge different between cash or SRS. You should probably check with the platform you are using just to be sure.

I’ve seen such differences fairly often. They usually show up in terms of the promotions/discounts that aren’t available when you’re using SRS funds and/or in custody, platform, or other such recurring monthly/quarterly/annual charges.

Definitely check the fee schedule, agreed.

 

[BBCWatcher]

MBH:
https://www.nikkoam.com.sg/files/documents/funds/fact_sheet/sgd_ig_corp_bd_etf_fs.pdf
YTM: 3.14%

A35:
https://www.nikkoam.com.sg/files/documents/funds/fact_sheet/abf2_fs.pdf
YTM: 2.38%

~30% higher yield ((3.14-2.38)/2.38).

Nice! Didn't know the expected return is there. Very useful for a new fund like MBH.

Just be aware there’s a flip side: a higher YTM also means there’s more volatility in the fund’s share price as market interest rates vary, because the interest rate swings will be a little more pronounced than they will be with government bonds. There’s more room to move, basically.

We’ve seen a lot of posts from nervous initial investors in MBH because they purchased shares then market interest rates rose, meaning the prices of bonds fell. (Bond prices and bond yields are inversely correlated. When the price of a bond is up, the yield is down, and vice versa.) MBH’s share price at any particular moment is based on the market value of the basket of bonds it’s holding. If the fund managers buy a bond for $250,000 (let’s suppose), and afterwards market interest rates rise, that means the price of their bond falls — maybe to $245,000 let’s suppose. That decreases the share price.

Anyway, the yield of the fund will bounce around. Also, MBH, annoyingly, pays dividends once per year. This is not a nice feature. It’s too infrequent for fixed income investors, it’s inconvenient and cost inefficient for investors in their accumulation phase, and it should cause a fairly dramatic share price “burble” when the fund goes ex-dividend each year. There’s also the fact MBH is neither investment grade nor corporate. It holds unrated bonds, and it holds government agency bonds. Nikko AM Shenton picked exactly the wrong name for this fund.

Despite these flaws, it’s currently the best general purpose Singapore dollar denominated bond fund for long-term investors. MBH is not a place to park short-term or medium-term cash when you’re trying to preserve principal. Use Singapore Savings Bonds, Singapore government T-bills, possibly bank fixed deposits (at or below SDIC limits), possibly simple fixed deposit-like endowment plans (at or below SDIC limits), and/or possibly CPF (esp. near age 55 or older) for short-term or medium-term cash parking. And don’t park cash because you’re trying to time the markets. Don’t try to time the markets. Park cash when you’ve got some upcoming major expense to save for, such as a child’s university tuition bill.

I’m not really a fan of A35, and wasn’t, since you have the opportunity to invest directly in Singapore Government Securities, such as Singapore Savings Bonds.

 

[flikmy]

Guys quick question. What's the best way to transfer USD from scb to ib?

Context: I don't have a USD savings account yet. My USD are in my securities trading acc.

I probably know the answer to this one. Just hoping there's a better way out there

If you have a USD account on SCB (I have the $FCY account), you can now transfer USD to IB for free. SCB currently has a promo for free USD transfers to US accounts.
See: https://av.sc.com/sg/content/docs/scremit-promotion-zero-fees-tnc.pdf

I just did this yesterday with no charges.