*Official* Shiny Things club - Part 2

[Alyeska]

For people like me with 500 or lesser cash monthly to invest, should i look to invest in global stuffs or increase the amount i put in monthly? I have invested 2.4k in posb's IS so far over a year.

 

[chopra]

There is now vwra , an acc class of vwrd
Fyi

it's in lse?

 

[yiron]

it's in lse?

Yup, USD in LSE.

https://americas.vanguard.com/insti...ang=en&portId=9679&assetCode=EQUITY##overview

 

[assiak71]

It's the same fund as VWRD, just accumulating instead of distributing:
https://www.vanguard.co.uk/adviser/investments/product.html#/fundDetail/etf/portId=9679/assetCode=equity/?overview

TER is 0.25%, AUM is US$2.7b, same as VWRD

btw, VWRD/VWRA is 3.5% China, based on the index. Where did "5+%" come from?

Link from a prev post

Vanguard has good track record of low tracking error. I support vwra

 

[JuniorLion]

Link from a prev post

Vanguard has good track record of low tracking error. I support vwra

Sure, go ahead. You have been pushing VWRA in almost every thread you posted in.

 

[Shiny Things]

There is now vwra , an acc class of vwrd
Fyi

Yep - this is an interesting development that we’ve talked about a bit in this thread already.

VWRA ticks all the boxes. It accumulates its dividends; it’s got a low expense ratio for a global fund (it includes EM equities, which IWDA doesn’t)... I’m keeping an eye on it to make sure the spreads are reasonable, but I think this might be the new choice for the “global equities” lump of your investments. Watch this space.

For global equity ETFs, we are usually discussing USD-denominated ETFs listed on the LSE - but many of these ETFs are also listed in USD/EUR on other European exchanges like SIX, Euronext Amsterdam/Paris, Xetra... It seems like we should rule out SIX due to the 15 bps stamp duty on non-Swiss shares, but that still leaves at least Euronext and Xetra.

Given that both SCB and IBKR have access to these major exchanges alongside the LSE, and the exchange fees seem broadly similar, how do we decide which currency/exchange to use? Is it entirely down to the spreads available at each exchange?

Don’t forget the FX spreads as well. This matters less if you’re using Interactive, but Stanchart has much wider spreads for FX conversion into euros or pounds than for conversion into USD.

So at IBKR they’re neutral at best; at Stanchart they’re clearly worse. I’d just stick to the USD-denominated listings in the UK.

For people like me with 500 or lesser cash monthly to invest, should i look to invest in global stuffs or increase the amount i put in monthly? I have invested 2.4k in posb's IS so far over a year.

Sure, you can buy global ETFs through Stanchart. You’ll be buying $1000 or so every couple of months, which is totally reasonable.

Link from a prev post

Vanguard has good track record of low tracking error. I support vwra

Erm, mate, I don’t think you’re entirely clear on what you’re talking about here. Tracking error is a function of the fund, not a function of the fund manager; and there’s no difference in “tracking error” between Vanguard’s funds, iShares/Blackrock’s funds, and State Street’s funds. I think VWRA is a solid fund too, but this is nonsensical.

Thanks all for sharing your thoughts on this lively chat group!
Got a question here... My husband and I are both interested to start investing the global etf on IB. Looking at 3-4k a month. Would y'all recommend separate IB accounts or sharing one account to save on fees?

I’m not your accountant or your tax strategist, but all other things being equal yeah, you might as well lump them in together.

Also is there a threshold before one gets taxed on total holdings in IB?
Thank u!

IB doesn’t tax your holdings at any point.

Hi Shiny Things,

Thanks so much for all the advice you have been providing to the forum. I'm new to investing, so I just recently bought your book to begin my journey. I have just finished reading it, but I have a question to ask which wasn't mentioned in your book that I hope you can clarify.
[...]
So my question is, is this a fair consideration to be including into your fees and cost when choosing a broker? Why or why not? If yes, then is it significant enough that it gives MBKE an edge over SCB for either the small-time investor (<$1000/month) or the bigger investor (>=$1000/month)?

Well, the problem there is that MBKE’s stopped taking new signups for MBKE MIP.

And to be honest, no, I wouldn’t worry about that too much. Think of that thousand bucks as part of your emergency fund, not part of your investment portfolio. It’s not worth thinking too hard about, as long as you can get to the money when you need it.

Edit: On a side note, assuming one has a lump sum of $100k USD, would it be better to funnel it all into IB ASAP to get the monthly fee waiver or DCA?

I wouldn’t rush. If I recall correctly, IBKR gives you a waiver on your first three months’ minimum brokerage (the ten bucks a month); so if you’re investing your lump sum spread over four to six months (as you should!), then you’ll pay like thirty bucks absolute max. I wouldn’t worry about it.

 

[coolhead]

Any idea why 10year bond yield drop so much?

Sent from HMD Global TA-1004 using GAGT

 

[BBCWatcher]

IB doesn’t tax your holdings at any point.

That's correct because IB is not a government, but IB occasionally collects/withholds some taxes on behalf of various governments. These occasions are situational; it depends on what you're doing and who you are.

If sumos23 would like to elaborate on his/her tax questions, perhaps we can help.

 

[888888888888]

Any idea why 10year bond yield drop so much?

Sent from HMD Global TA-1004 using GAGT

ism report last wk, china tariffs.
fall in xpected inflation
declining neutral rate of interest
trade tensions leading to
worsening global growth
yield curve inversions intensified. rate cut not shifting the yc, long-end fell post fomc.
trump derangement (sth like that)

lots of things flashing at once, need to be conscious of equity curve
vicious cycle of central banks forcing inflation, politics in fray and trying to underrun the US dollar.
usdyen fell crashed into the sea. chinese (empire) strike back.

ism again later.

 

[Shiny Things]

Any idea why 10year bond yield drop so much?

Sent from HMD Global TA-1004 using GAGT

More buyers than sellers.

Anyway, serious question deserves serious answer: it was, once again, Donny Two Scoops and his dopey, Sinophobic trade policy.

I'm gonna assume you're talking about the US 10s, and more specifically the absolutely bloody gargantuan plunge in yields last Thursday, where 10s yields dumped 14bps in a day (which is a huge move): that was pretty much all down to Cheeto Jesus ramping up the rhetoric on Chinese tariffs.

Amazingly enough, yields are lower again this morning by about another 10bps in the 10yr; the benchmark 10s are yielding about 1.75% right now, off from 1.85% when we shut up shop on Friday.

I don't know for sure, but I'm going to guess this is a reaction to China letting the CNY slip through 7.0000: everyone's reading this as China saying "you want a trade war, righto then, let's have it". That's bad for global growth, but good for bonds. Moral of the story: you want to own some stocks and own some bonds.

On a not-unrelated note, that was a really messy move through 7.0000 in USDCNH—lots of forced buyers and not a lot of sellers; it smells like some fairly chunky options barriers were lurking there. I already rambled about this on Twitter but there's going to be some FX exotic options books that really got the rough end of the pineapple on that move.

 

[coolhead]

More buyers than sellers.

Anyway, serious question deserves serious answer: it was, once again, Donny Two Scoops and his dopey, Sinophobic trade policy.

I'm gonna assume you're talking about the US 10s, and more specifically the absolutely bloody gargantuan plunge in yields last Thursday, where 10s yields dumped 14bps in a day (which is a huge move): that was pretty much all down to Cheeto Jesus ramping up the rhetoric on Chinese tariffs.

Amazingly enough, yields are lower again this morning by about another 10bps in the 10yr; the benchmark 10s are yielding about 1.75% right now, off from 1.85% when we shut up shop on Friday.

I don't know for sure, but I'm going to guess this is a reaction to China letting the CNY slip through 7.0000: everyone's reading this as China saying "you want a trade war, righto then, let's have it". That's bad for global growth, but good for bonds. Moral of the story: you want to own some stocks and own some bonds.

On a not-unrelated note, that was a really messy move through 7.0000 in USDCNH—lots of forced buyers and not a lot of sellers; it smells like some fairly chunky options barriers were lurking there. I already rambled about this on Twitter but there's going to be some FX exotic options books that really got the rough end of the pineapple on that move.

Can I follow you on twitter?

The most plausible explanation is more buyers than sellers. Thanks for regarding my question is serious. I spent the weekend going thru the net for answers but couldn't find convincing ones. The only one I can thing of is that trade war will most likely worsen economic numbers and by anticipation further rate cuts by fed, bond investors are purchasing even more bonds since yeilds will go down in future.

Sent from HMD Global TA-1004 using GAGT

 

[gerdhold]

More buyers than sellers.

Anyway, serious question deserves serious answer: it was, once again, Donny Two Scoops and his dopey, Sinophobic trade policy.

I'm gonna assume you're talking about the US 10s, and more specifically the absolutely bloody gargantuan plunge in yields last Thursday, where 10s yields dumped 14bps in a day (which is ahuge move): that was pretty much all down to Cheeto Jesus ramping up the rhetoric on Chinese tariffs.

Amazingly enough, yields are loweragain this morning by about another 10bps in the 10yr; the benchmark 10s are yielding about 1.75% right now, off from 1.85% when we shut up shop on Friday.

I don't know for sure, but I'm going to guess this is a reaction to China letting the CNY slip through 7.0000: everyone's reading this as China saying "you want a trade war, righto then, let's have it". That's bad for global growth, but good for bonds. Moral of the story: you want to own some stocks and own some bonds.

On a not-unrelated note, that was areally messy move through 7.0000 in USDCNH—lots of forced buyers and not a lot of sellers; it smells like some fairly chunky options barriers were lurking there. I already rambled about this on Twitter but there's going to be some FX exotic options books that really got the rough end of the pineapple on that move.

It was a massive vol move relative to spot cnh which was down less than 2%. 1m went from 5.5 to 10.

 

[wannabelazy]

That's bad for global growth, but good for bonds. Moral of the story: you want to own some stocks and own some bonds.

Does this mean that you no longer advocate counting CPF balances as part of one's bond portfolio? And that it's better to ignore CPF and buy say MBH in addition to the stock ETFs?

 

[oxygenoxy]

Granted the tracking error is a function of the fund, but the fund manager does play a big part in how the fund is managed and this will definitely affect the tracking error of ETF passive funds. For example, different firms treat income from securities lending differently, Vanguard has a patent on using ETFs to avoid taxes on mutual funds (granted this is for mutual funds and not ETFs), etc. Saying that this is nonsensical is a bit too much?

Erm, mate, I don’t think you’re entirely clear on what you’re talking about here. Tracking error is a function of the fund, not a function of the fund manager; and there’s no difference in “tracking error” between Vanguard’s funds, iShares/Blackrock’s funds, and State Street’s funds. I think VWRA is a solid fund too, but this is nonsensical.

 

[raidorz]

Would like to ask if anybody has any opinions on this.

Let's say I'm DCA-ing IWDA (which I am) and the market dips. It is advisable to invest let's say 1 month worth when the price drops below a certain parameter (5-10% current average price) to lower your average price? This is assuming that the DCA schedule goes on as per normal, one is just buying outside the schedule.

Also, if VWRA is recommended over IWDA, how should we handle this change or just stick to our current plans?

 

[Shiny Things]

It was a massive vol move relative to spot cnh which was down less than 2%. 1m went from 5.5 to 10.

Wwwwooooowwwwwzzzzzeeeeerrrrrsssss that's a a big move.

I'm gonna guess some poor b@stard was long industrial amounts of the 7.0000 touch and short A LOT of gamma against it. I've been there and it's not fun, even in G10. Look for the nerdy-looking bloke (there is no such thing as a non-nerdy-looking exotics trader, and odds on it's a bloke) crying into his Asahi at BQ Bar tonight and you'll have found the culprit.

Can I follow you on twitter?

Knock yourself out, I'm @joshgiersch, though you'll want to take note of my pinned tweet.

Does this mean that you no longer advocate counting CPF balances as part of one's bond portfolio? And that it's better to ignore CPF and buy say MBH in addition to the stock ETFs?

Uh no, that is not even slightly what I said. I'm using "bonds" as the colloquial for "things that are fixed-income and generally stable value". (Though there is a nuance, I'll grant you: bonds go up in price when interest rates go down, but CPF balances don't go up in price. The good bit is that CPF pays a significantly above-market interest rate, so... tradeoffs!)

Granted the tracking error is a function of the fund, but the fund manager does play a big part in how the fund is managed and this will definitely affect the tracking error of ETF passive funds. For example, different firms treat income from securities lending differently... Saying that this is nonsensical is a bit too much?

Well let me put it this way: VWRD's tracking error over the last five years has been about +7bps annualised. IWDA's tracking error over the last five years is... about +10bps annualised. 3bps isn't even worth thinking about.

But what I'm getting at is that all of these fund managers are very good at doing what they're paid for, which is tracking their indices. Tracking error on large index ETFs is sufficiently low that average investors do not need to think about it.

 

[coolhead]

oh my is that really you shiny? you are amdk? pretty handsome.

 

[Shiny Things]

oh my is that really you shiny? you are amdk? pretty handsome.

I'm also taken, but thanks for the compliment

Omg!
He isn't Singaporean?
[...]
Promoting his recommended broker IB?.
Seriously, I may needed reporting this thread to MAS ...

Hey FCS! I remember we had a conversation a couple of months back where I asked you to keep your posts to the FX threads and SSI?

When you post in here about things that aren't relevant to long-term investing, you make the board a worse place for everyone. You create noise, you confuse people, and you waste everyone's time.

If you start your own thread in SSI, you can post as many trades as you like and brag about them, and nobody will report you or complain about you. But this thread is the wrong place for your preening about your trades.

 

[Johnpierpontmorgan]

I seriously can't believe the fed is going to cut 25 basis points. They have gone bonkers. The only economic data supporting the rate cut is 1.6-1.8% inflation rate, other than that all else looks good!

Sent from HMD Global TA-1004 using GAGT

The fed couldn't even raise rates if trump didn't cut taxes last year propping up stocks.

It's qe to infinity, unless US really solves their debt problem. But the political system is built to push the problem down the road. Debt ceiling lifted until 2021. Who would have the appetite to buy so much treasuries other than the fed itself. Couple with ecb in this equation. It's a done deal

The paradigm has shifted like ray dalio mentioned. I have been too early buying gold silver since 2010 but as a young investor, I now understand the phrase markets can be irrational longer than u can remain solvent. Let's continue to pretend the economy is as great as ever

If stagflation comes back to haunt, be prepared to lose more than 40% of the real value in the equities portfolio (which it did in the 70s). For investors with less risk appetite, stocks still provide a better alternative than fully in cash or bonds. Keep up the good informative work here

 

[sumos23]

That's correct because IB is not a government, but IB occasionally collects/withholds some taxes on behalf of various governments. These occasions are situational; it depends on what you're doing and who you are.

If sumos23 would like to elaborate on his/her tax questions, perhaps we can help.

Thanks for Shinythings and your reply!

But to be clear there is estate tax (or tax paid upon death by the beneficiaries) correct? And the figure I recall is 60k.
Which means anything above 60k USD gets taxed..
Hence if I wanna reduce the estate tax, I should aim to draw down the amount I have in IB to below the 60k threshold when I am closer to retirement.
Accurate?