Official Shiny Things thread—Part III

[sleepingcat]

Hi, just wondering why we need to invest in bonds?
A35 seems fo only pay 2% per annum while there are saving accounts which has similar interest rate per annum (but most of them has dropped their interest rate)

 

[cassowary18]

Any idea how to use SRS to buy IWDA? If not, what to do with SRS? Thanks.

Some options:
Lion Infinity Global Stock Index Fund SGD Class which feeds into VWRA (TER 0.82%)
J0P.SI which is a synthetic ETF that tracks MSCI World Index (TER 0.45%)

Neither of these are particularly cost-effective options though so I'd rather just use cash to buy IWDA and save my SRS for purchasing ES3.

 

[311290]

Hi ST,

Please help to recommend the funds to get for my Thai tax deduction.

As i'm in the 15% tax bracket, however i have to hold the funds for 10years before i'm able to sell.

https://docs.google.com/spreadsheets/d/1hJMZUrzbCXKRNPuUpp_Kc2AmoyWxpLeuxBV-Y7bcAPA/edit?usp=sharing

Thank you

 

[polar27]

1) As STI ETF has significant allocations to financial services to 42%, any concerns that this is not as diversified as say a global ETF like IWDA or VWRA, in the local context?

2) Any advice if dca-ing into individual local stocks on monthly basis is a better option aa compared to STI ETF, though drawbacks I can see are the commission charges and minimum lot requirements (higher entry requirements) for the dca.

Thanks!

 

[megdang]

Hi, just wondering why we need to invest in bonds?
A35 seems fo only pay 2% per annum while there are saving accounts which has similar interest rate per annum (but most of them has dropped their interest rate)

Those saving accounts only pay interest up to an amount but not the whole amount, e.g. up to $50,000 and any amount higher than this earn no interest.
But a bond pays interest for the whole amount.

 

[swan02]

Why do we keep STI ? Simply FX risks.

Also one can argue it will have a tendency to revert to the mean ie high future returns

I believe sti is already improved with more REITs allocated into it although I prefer mapletree industrial to be next. I don’t mind the high allocation to banks since REITS work with them best.. think of interest rates.

As some here have argued, perhaps a lean towards iwda is warranted 80/20 favouring iwda.

Dca individual stocks is expensive even with priority scb privilege. but i do that every month.

1) As STI ETF has significant allocations to financial services to 42%, any concerns that this is not as diversified as say a global ETF like IWDA or VWRA, in the local context?

2) Any advice if dca-ing into individual local stocks on monthly basis is a better option aa compared to STI ETF, though drawbacks I can see are the commission charges and minimum lot requirements (higher entry requirements) for the dca.

Thanks!

 

[swan02]

Hi, just wondering why we need to invest in bonds?
A35 seems fo only pay 2% per annum while there are saving accounts which has similar interest rate per annum (but most of them has dropped their interest rate)

A quick look at SSB and Bloomberg 10 year bond sgd suggest rates are not 2 percent. It makes sense it’s YTM is around 1 percent after a huge govt bond rally.

We keep bonds for several reasons but the main reason is to provide a ballast thus smoothing the volatility of your portfolio via diversification and getting higher returns through rebalancing. The only known free cake in investing.

Rebalancing works best with low correlated assets but remains controversial as to how much benefits it provides where the benefit seem potent within the equity Constituents then say equity rebalanced with bonds.

Just think about how all weather portfolio works.

anyways one may argue at this low interest rate that cash is a better candidate given a lower opportunity cost. I myself have gone towards this route since SSB is a fantastic alternative but im still considering some allocation to a35 simply it’s the best reliable sgd ballast, meaning the interest rate it provides does not matter because I want the low correlation to smooth my portfolio as well returns benefit from rebalancing.

 

[doody_]

Those saving accounts only pay interest up to an amount but not the whole amount, e.g. up to $50,000 and any amount higher than this earn no interest.
But a bond pays interest for the whole amount.

Most of those minimal-conditions savings accounts were wiped out in the last month. You're left with those that require salary credit, bill payment, cc spending, investments, and they pay around 2% with no guarantee to continue in the months to come.

Dca individual stocks is expensive even with priority scb privilege. but i do that every month.

SCB commission is already one of the lowest, don't see how it can get any cheaper.

 

[swan02]

SCB commission is already one of the lowest, don't see how it can get any cheaper.

If your buying amount is large enough and or u r at least silver member with FSMone. You are able to buy per counter no matter how many times in a day of that counter for just 10 dollars fees beating scb.

Also as an alternate if u r willing to accept TIGER brokerage as pointed out recently, it’s just 0.08% with no min fees.

But since my buying amount per counter isn’t too large and I have reservations with anything that’s made in China, I guess scb priority is still best for now.

 

[klanddt]

If I have a portfolio of stocks denomoninated in various currencies like USD, GBP, EUR, JPY, HKD, MYR are there any applications free or paid which enable one to track its performance in a base currency e.g SGD and an indexed chart showing the relative performance of its components expressed in SGD over different time frames (as currencies fluctuate all the time). Now I am using yahoo finance for both but am not sure if it converts to a base currency in order to paint an accurate picture of a portfolio performance over time.

try portfolio trader ios

 

[aYu82]

Hi ST, ii read that you recommended MCHI:US iShares MSCI China ETF for China exposure. May i know if this ETF subject to withhold tax? I understand that HKEX:2828 is something similiar but it does not include Alibaba. Is there a MCHI:US equivalent listed on HK? Thanks!

 

[flyingeagles]

Planned on making monthly investment on IB

- NXKU 200 SGD (LSE)
- IWDA 200 SGD (LSE)
- CXSE 100 SGD (NASDAQ)

and also

- 400 SGD on growth account (maybe stashaway? Haven't decide)

So 900 SGD saved for investment.

Any comments on the above portfolio or any where it is lacking? I never make any investment before other than purchasing my company stock. Total newbie... Appreciate all your advices.

Also currently looking at
Singtel, Ascendas REIT, Genting SG, OCBC into my stock portfolio.

And any idea how I can purchase Bank Rayat Indonesia stocks?

Posted from PCWX using LYA-L29

 

[polar27]

Hi ST,

We can agree IWDA is one of the better ETF arounds for exposure into developed markets. Any suggestions on how CSPX can complement a portfolio of IWDA or comments on investing solely into CSPX instead of IWDA?

Am not great at reading the factsheets, and understand the disclaimers that past performance will not indicate future performance, but can it be inferred that CSPX had performed better than IWDA all the time in the past, at least?

CSPX Factsheet:
https://www.ishares.com/uk/individu....pdf?switchLocale=y&siteEntryPassthrough=true

SWDA (IWDA in GBP denomination) Factsheet: https://www.ishares.com/uk/individu...sci-world-ucits-etf-fund-fact-sheet-en-gb.pdf

If image does not load, https://imgur.com/a/ytnfKCN

TKS

 

[megdang]

Most of those minimal-conditions savings accounts were wiped out in the last month. You're left with those that require salary credit, bill payment, cc spending, investments, and they pay around 2% with no guarantee to continue in the months to come.

Then it's another bigger problem, the terms and conditions keep changing over time. Today they remove, tomorrow they put back.

You're investing for long term, let say 20-30 years, so you should not rely on the unstable vehicle like these savings account.

 

[cassowary18]

Hi ST,

We can agree IWDA is one of the better ETF arounds for exposure into developed markets. Any suggestions on how CSPX can complement a portfolio of IWDA or comments on investing solely into CSPX instead of IWDA?

Am not great at reading the factsheets, and understand the disclaimers that past performance will not indicate future performance, but can it be inferred that CSPX had performed better than IWDA all the time in the past, at least?

CSPX Factsheet:
https://www.ishares.com/uk/individu....pdf?switchLocale=y&siteEntryPassthrough=true

SWDA (IWDA in GBP denomination) Factsheet: https://www.ishares.com/uk/individu...sci-world-ucits-etf-fund-fact-sheet-en-gb.pdf

If image does not load, https://imgur.com/a/ytnfKCN

TKS

You have to ask yourself why you're overweighting USA stock market, specifically the S&P 500. If there's a legitimate reason, for example you want to retire in Florida, then go ahead. Otherwise you end up with geographical concentration risk.

 

[polar27]

Not planning to retire overseas, but past performance of CSPX seems to be higher and any changes are in tandem with IWDA.

Based on my limited understanding, there has never been a time where IWDA has outperformed CSPX.

Agree we cant use past performance to predict future performance, or predict how the US market will face in years to come.

But given the interconnected markets and that IWDA has significant holdings in US (65%), any impact on US markets will also affect IWDA and contributions from holdings in other countries (35%) will not be a sufficient buffer as other markets as interconnected to US market to an extent, and as based on previous trends, IWDA dips whenever CSPX dips and never been a time when IWDA peaks and CSPX dips?

TIA

You have to ask yourself why you're overweighting USA stock market, specifically the S&P 500. If there's a legitimate reason, for example you want to retire in Florida, then go ahead. Otherwise you end up with geographical concentration risk.

 

[assiak71]

Not planning to retire overseas, but past performance of CSPX seems to be higher and any changes are in tandem with IWDA.

Based on my limited understanding, there has never been a time where IWDA has outperformed CSPX.

Agree we cant use past performance to predict future performance, or predict how the US market will face in years to come.

But given the interconnected markets and that IWDA has significant holdings in US (65%), any impact on US markets will also affect IWDA and contributions from holdings in other countries (35%) will not be a sufficient buffer as other markets as interconnected to US market to an extent, and as based on previous trends, IWDA dips whenever CSPX dips and never been a time when IWDA peaks and CSPX dips?

TIA

You should be comparing S&P500 and MSCI World, not the 2 ETFs which have shorter history.

I didnt check when but there was surely a decade when US did poorer. Should be around 2000-2010

 

[Shiny Things]

always interesting to know your travel tales.

what are the things u enjoy being in SG?

ultra low taxes.

other than that?

Look, firstly, low taxes are pretty fantastic. You live in a literal tax haven! There are no dividend taxes and no capital gains taxes; that's pretty great! Over here in California, if I have a short-term capital gain (on stock that I've held less than a year), I'm going to have to hand close to 50% of that gain back to the government.

Now, to be clear, I don’t mind that. I knew when I moved to California that I was going to basically triple my tax rate, and I accepted that coming in; it’s not my place to complain about it. (And you get some pretty great services in California for the money; good roads, good schools, good everything.) But it really is A LOT OF MONEY.

Aside from that, what else do I like about Singapore: being warm all year long is pretty nice (though oh my god I went through so many work shirts!). The food’s amazing. The infrastructure is fantastic: Changi airport and the MRT are both top-notch. The job market was great, and I have friends I made over there that I still keep in touch with.

And this one doesn’t apply so much to me, but because Singapore’s schools are world-class and it’s so safe, Singapore’s a great, great place to raise a family.

Hi, just wondering why we need to invest in bonds?
A35 seems fo only pay 2% per annum while there are saving accounts which has similar interest rate per annum (but most of them has dropped their interest rate)

As people pointed out, the yields on both A35 and savings accounts have plunged lately, after interest rates all around the world collapsed to basically zero. I’d point to MBH, as I always do: its portfolio yields 2.8% (some of which will come as dividends, and some as capital gains), which is a lot better than the 1.3-ish percent yield on A35, and doesn’t require you to jump through any savings-account hoops to get it.

Hi ST and BBC,

I'm a Singaporean and Australian PR living in Singapore currently. I currently have 1/3 of my assets in AUD cash that I'm hesitant to fully convert back to SGD because of the low exchange rates.

I mean, AUDSGD’s up 15% from its March lows. What are you waiting for?

I'm investing into STI, IWDA for equities and I was wondering if I should convert the AUD to USD and purchase IWDA, or just use the AUD to purchase VGS instead to fulfill the IWDA/international index part of my equities.

I plan to live in Singapore though and don't think that I'll retire in AU - def keen to know what's your take on this?

You’re lucky - Aussie residents get a pretty good lineup of Vanguard ETFs. VGS is great. I’d use it.

I know you didn’t ask me but I’m the right person to ask as I was at the same exact situation as you.

2. If you are Australian tax domiciled, it’s ok to buy via a cheap tax platform such as selfwealth n u r entitled to franking credits.[…]
4. U can still be aussie tax domiciled even living in Singapore. So becareful how u arrange your financial affairs.

Couple notes here:
Point 2: IBKR is the best platform for trading Aussie stocks. Gotta love it.
Point 4: yes, be careful you’re not Aussie tax domiciled by accident. I lost my Aussie tax residence pretty quickly when I moved to Singapore back in ’07 but this may not be the same for everyone.

Hi ST,

Please help to recommend the funds to get for my Thai tax deduction.

As i'm in the 15% tax bracket, however i have to hold the funds for 10years before i'm able to sell.

I’m sure I’ve been asked this a couple of times, but I can’t remember whether it was you or someone else who asked. Anyway: that google sheet you linked to is access-controlled. Post the view-only link, not the edit link; and make it world-viewable.

Planned on making monthly investment on IB

- NXKU 200 SGD (LSE)

WHYYYYYYYY

- IWDA 200 SGD (LSE)

OK that’s fine

- CXSE 100 SGD (NASDAQ)

WHYYYYYY

Any comments on the above portfolio or any where it is lacking? I never make any investment before other than purchasing my company stock. Total newbie... Appreciate all your advices.

OK, my advice is that you’re spreading yourself way too thin. You don’t need a USD-hedged Nikkei allocation, or any Nikkei allocation at all, because you already get that in IWDA. Why are you buying a tiny 100-a-month slug of Chinese SOEs, and why are you buying it on the Nasdaq where it becomes subject to US estate tax?

If you buy IWDA, you get all of that stuff, and you get it for just one transaction fee.

Also currently looking at
Singtel, Ascendas REIT, Genting SG, OCBC into my stock portfolio.

Do you have any idea why you’re looking at these stocks in particular, instead of buying ES3? Why do you think these stocks will outperform the index?

And any idea how I can purchase Bank Rayat Indonesia stocks?

Again—you’re spreading yourself too thin. Is this a tip you got from someone?

Hi ST, ii read that you recommended MCHI:US iShares MSCI China ETF for China exposure.

I might have recommended it to someone who specifically wanted to get exposed to China for some reason. “I think China is rising!” Is not a good reason; that was a theme in the eighties and nineties. China is done rising.

Why are you trying to get exposure to China, first? Then we can tell you how to do it.

1) As STI ETF has significant allocations to financial services to 42%, any concerns that this is not as diversified as say a global ETF like IWDA or VWRA, in the local context?

Honestly, no, I’m not worried. The Singaporean stock market is heavy on financials; it is what it is. That’s why you want to have some exposure to overseas stocks—to diversify you away from home-country risk.

2) Any advice if dca-ing into individual local stocks on monthly basis is a better option aa compared to STI ETF, though drawbacks I can see are the commission charges and minimum lot requirements (higher entry requirements) for the dca.

Those are your drawbacks right there.

Hi ST,

We can agree IWDA is one of the better ETF arounds for exposure into developed markets. Any suggestions on how CSPX can complement a portfolio of IWDA or comments on investing solely into CSPX instead of IWDA?

No, goodness, come on. Between your two posts, I understand that you want to buy CSPX because the US stock market has gone up a lot lately, and you want to say that you’re involved. Think about two things, though:

• You’re trying to buy something after it’s gone up—that’s the worst time to buy, if you’re buying for the long term. It’s like buying something the day after the GSS finishes and the price has gone up 20%. You want to buy things that are out of favor, and hold them until they come into favor.
• When you buy IWDA, you already get exposure to CSPX. The S&P 500 is about 50% of IWDA’s portfolio. So if you buy IWDA, you won’t have to worry about missing out on the S&P 500 if it rips higher again, because you’ll have a big chunk of your portfolio in the S&P already.

I didnt check when but there was surely a decade when US did poorer. Should be around 2000-2010

Oh yeah. This is a quick-and-dirty chart, leaving aside dividends, but this is the ratio of the MSCI EM index to the S&P 500 over the last thirty years. When the line is going up, EM is outperforming the USA; when it goes down, the USA is outperforming EM.

1990-’94 was a huge period of EM outperformance - and so was the entirety of the 2000s. From 2001 to 2010, EM stocks nearly tripled relative to the S&P 500!

 

[celtosaxon]

i think lots of sg folks would love to ship out to any western countries in a heartbeat, even in the midst of george floyd's induced lootings.

Anyone who has spent considerable time in a Western country will know not to take the news media hype or Hollywood stereotypes and believe that is what everyday life is like over there.

I have spent half of my life in Singapore and the other half in the U.S.

There are pros/cons to any country, but in the U.S. it very much depends on where you settle down. There are some parts of the U.S. that are equally safe or safer than Singapore. Crime data is available on each and every city and town, right down to the specific neighborhood.

One of the popular motivations for wanting to move to the U.S. is the more affordable material standard of living. The two items that clearly stand out is housing and automotive expenses. Even someone working a low-level job in the U.S. can afford a decent house and car.

But there are obviously some motivations that are specific to an individual. For example, not everyone loves hot tropical weather and high density urban living. Others might have hobbies and interests that are simply not affordable, practical or even possible here in Singapore.

Lower taxes here do help offset the higher cost of living, but I think you need to be pulling well above average for that to be a real motivating factor.

 

[razoreigns]

1990-’94 was a huge period of EM outperformance - and so was the entirety of the 2000s. From 2001 to 2010, EM stocks nearly tripled relative to the S&P 500!

Hi ST, BBC,

Assuming one is invested in IWDA and not VWRA, what do you think of using the ES3 allocation interchangeably with EIMI? I see the past performance of ES3 and EIMI being quite close. That being the case, EIMI would fundamentally provide more diversification compared to ES3 and also provide direct exposure to "China is done rising" China.