*Official* Shiny Things club

[Shiny Things]

Quoted this from another thread(Limster bro was making a comment on EIMI suddenly plunging by almost 20%). As mentioned, prices of ETFs have deviated from the underlying indexes prices.

Just to check with everyone here, do you try to pick some of these mispriced ETFs by putting a very low (15-20% off spot price) bid? Any things to consider for trying to do that?

The first thing to consider is that it hardly ever happens - it really only happens on days like yesterday when the market-makers switch their computers off to protect their necks.

The second thing to consider is that this is risky! If you put in a bid 20% away, you'll need to move it every day and you'll almost never get filled; if you put in a bid 5% away, you'll get filled more often but you might end up losing money if it's an actual move and not an illiquidity-driven spike.

I honestly wouldn't bother doing this unless I could automate it. (If I could automate it, though - yeah, maybe. Wrap 10%-wide bid-offers around some of the more illiquid ETFs; make sure you're participating in the opens and closes; and you might occasionally make a bit of bonus alpha.)

Anyway i managed to get some EIMI at $18.20 and $18

High five! And also a high-five to the people who scooped ES3 during the panic yesterday - but even if you didn't, like I said in one of the other threads, today's prices are still pretty damn good too.

I find not logging into my brokerage account very helpful for reducing panic and preventing unwise selling decisions

Apparently TD Ameritrade agrees with you. (Scottrade and Robinhood both fell over yesterday morning as well. Capacity planning, guys! Come on, this is Web-Facing Services 101!)

How do you all view the Pound against SGD? Will it strengthen it time to come with imminent interest rate increase?

Er - the BoE and the Fed are both on track to hike rates sometime soon. If you put a gun to my head I'd say I genuinely have no idea about the direction of GBPSGD.

 

[Shiny Things]

Also I endorse this, from the fine folks at the Billfold:

...none of the money we’ve set aside for retirement matters to us until we’re about ready to retire, so just keep doing what you’ve been doing and remember you’ve got many years ahead of you (if you’re like us). Maybe pour yourself a nice mug of tea and eat some pie.

 

[newjersey]

hi Shiny & any others-in-the-know,


can I ask if u can tell me the difference?

I have tried to google the results, without too much success.

I am looking at iShares China Large Cap ETF, however, there seems to be a couple of different counters for it, that I am not able to differentiate it's difference.

Kindly explain, if you can.

1. iShares China Large Cap ETF > FXI:US

2. iShares China Large Cap ETF > FXI:CI

3. iShares China Large Cap ETF > FXI:AU ( I assume this is in Oz$ )

does any of u know the diff between 1. & 2.

&

What is CI, in the "FXI:CI" description?

thanks in advance.

 

[allan_nalla]

What is CI, in the "FXI:CI" description?

I do not belong to the above groups but..

I believe CI refers to the Santiago Stock Exchange in Chile.

This might provide a clearer view and you should yield the above result when you google "Sant. Comerc".

Essentially, the various FXI:xx in Bloomberg indicates the various exchanges that the ticker is listed on. In this case, the primary exchange would be NYSE with the rest being secondary.

However, I may be wrong.


EDIT: Apparently the page keeps changing its wording, one moment it was 'Chilean Electronic Stock Exchange', another moment it's back to 'Sant. Comerc'. Both points to Chile nonetheless.

 

[newjersey]

hi, allan_nalla,

many thanks for your explanation.

 

[deathman91]

Quick question about the ES3 STI ETF. From my understanding, both NAV and P/B implies to the same thing. As in how under or overvalued the company is.

NAV in other words is book value.
So, NAV * P/B = Current Market Price right?

But why the 2 figure on the website doesn't seems to tally with market price?

 

[ston12345]

Typically, P/B is a trading comp for single stocks/companies and if I would venture a guess, it's probably the weighted average historical P/B , based on current price, for the 30 companies in the index.

NAV is sort of seen as a valuation metric for the ETF. The price should trade close to NAV but there are times when prices are diverge from the NAV but in this case it isn't very much. I'd say if you want a price better than what the market makers are posting on the exchange, you should ring them up. Their valuations models for posting the bid ask on the market might not be accurate to the second - for reasons like to cover themselves in case of a spike or whatsoever.

 

[Shiny Things]

Quick question about the ES3 STI ETF. From my understanding, both NAV and P/B implies to the same thing. As in how under or overvalued the company is.

NAV in other words is book value.
So, NAV * P/B = Current Market Price right?

But why the 2 figure on the website doesn't seems to tally with market price?

Yeah, Ston12345 is right. The price/book ratio refers to the stocks underlying the index; the NAV refers to the net asset value of the ETF itself.

The price of the ETF will usually follow the NAV pretty closely, so it never becomes over- or underpriced.

 

[V_for_Vanilla]

Hi guys

with the recent drop in major financial markets, any changes to your investment strategies?

Keep calm and buy ES3, IWDA and A35 as per normal?

I see it as opportunity to buy and add more and I did.

 

[13luetooth]

Guys can I ask a few simple question?

Currently new to investing and I have been reading quite a fair bit and to start small initially, I am looking at STI ETF and ABF ETF.

I understand how STI ETF works but do correct me if my understanding is wrong. STI ETF works like any other shares which gives dividends and it tracks very closely to STI index and can be sold in a lot of 1000 shares to earn capital growth.

How about ABF ETF? I am quite confuse over bond index. From what I know, it does not have a maturity date ? and as the interest rate increases, the price of the bond index reduces. But what else about this bond index ? From what I check in yahoo finance, ABF ETF price seems to be extremely stagnant. So how do you guys benefit from it by investing it ?

 

[Bedokian]

Guys can I ask a few simple question?

Currently new to investing and I have been reading quite a fair bit and to start small initially, I am looking at STI ETF and ABF ETF.

I understand how STI ETF works but do correct me if my understanding is wrong. STI ETF works like any other shares which gives dividends and it tracks very closely to STI index and can be sold in a lot of 1000 shares to earn capital growth.

How about ABF ETF? I am quite confuse over bond index. From what I know, it does not have a maturity date ? and as the interest rate increases, the price of the bond index reduces. But what else about this bond index ? From what I check in yahoo finance, ABF ETF price seems to be extremely stagnant. So how do you guys benefit from it by investing it ?

It is a bond fund, not a direct bond, so there is no maturity date. The managers at Nikko AM are the ones doing the buying and selling of bonds, which in turn consolidate them into this ABF ETF. The bond fund is stable because the underlying bonds, mostly made up of government or government-related bonds, are fairly stable themselves (SGS, HDB, LTA, etc.).

The benefit is more of diversification - stocks and bonds are not directly correlated, therefore when the market conditions do not favour stocks, it is likely to favour bonds.

Fact sheet - http://www.nikkoam.com.sg/files/documents/funds/fact_sheet/abf2_fs.pdf

Not vested.

 

[chopra]

It is a bond fund, not a direct bond, so there is no maturity date. The managers at Nikko AM are the ones doing the buying and selling of bonds, which in turn consolidate them into this ABF ETF. The bond fund is stable because the underlying bonds, mostly made up of government or government-related bonds, are fairly stable themselves (SGS, HDB, LTA, etc.).

The benefit is more of diversification - stocks and bonds are not directly correlated, therefore when the market conditions do not favour stocks, it is likely to favour bonds.

Fact sheet - http://www.nikkoam.com.sg/files/documents/funds/fact_sheet/abf2_fs.pdf

Not vested.

Not vested too as ocbc360 uob1 yield better. Heck even cimb is better

 

[hyperbole]

Not vested too as ocbc360 uob1 yield better. Heck even cimb is better

cimb yields better in what way?

 

[13luetooth]

It is a bond fund, not a direct bond, so there is no maturity date. The managers at Nikko AM are the ones doing the buying and selling of bonds, which in turn consolidate them into this ABF ETF. The bond fund is stable because the underlying bonds, mostly made up of government or government-related bonds, are fairly stable themselves (SGS, HDB, LTA, etc.).

The benefit is more of diversification - stocks and bonds are not directly correlated, therefore when the market conditions do not favour stocks, it is likely to favour bonds.

Fact sheet - http://www.nikkoam.com.sg/files/documents/funds/fact_sheet/abf2_fs.pdf

Not vested.

Looking at the bonds they bought definitely looks solid. So its more of a dividend income index ? Is it a capital growth type of index like STI ETF.

 

[VictorvonDoom]

cimb yields better in what way?

The interest is higher than the yield of ABF.

This is true if you don't factor in the (potential) capital gains of ABF price increases

 

[hyperbole]

The interest is higher than the yield of ABF.

This is true if the price of ABF is not factored in.

i'm not sure i understand this. cimb pays 0.8% interest. a35's yield is 2.66%

 

[13luetooth]

Not vested too as ocbc360 uob1 yield better. Heck even cimb is better

If thats the case, isn't it better if I invest regularly using DCA on Nikko am STI ETF ? since it has capital growth and the dividend yield is better than A35.

 

[hogrider88]

If thats the case, isn't it better if I invest regularly using DCA on Nikko am STI ETF ? since it has capital growth and the dividend yield is better than A35.

The point of diversifying shares n bonds is if u look back past three weeks u see how much nikko am sti etf dropped, and hw a35 has hold?

Compare urself if u're vested in nikko am sti etf fully vs diversified portfolio.

For me if i am out of cash, i will probably sell some a35 to buy some cheap sti etf at this price.

 

[allan_nalla]

If thats the case, isn't it better if I invest regularly using DCA on Nikko am STI ETF ? since it has capital growth and the dividend yield is better than A35.

From what I understand (again, I may be wrong), the primary reason why Shiny Things himself advocate readers here to invest in A35 is to act as a counter-weight to stocks.

This means that should a dip, or crash, happen, the bonds section of your portfolio should perform better due to the hypothesized correlation between stocks and bonds, thereby reducing your losses (allowing you to sleep better at night).

Having said that though, this isn't always the case as an article on Bloomberg this morning explained how China kept treasuries low despite the recent bloodbath. Sorry I can't find the article now.

If you're chasing higher marginal returns and is able to stomach higher risks, then yea, build your portfolio towards 100% stock-based. Nobody claims that it is wrong, having A35 as a part of your portfolio is just what Shiny Things recommend. It's not a heed-or-go-bankrupt kind of secret investing tactic.


P.S: I'm fully vested in stocks, contrary to what ST advocated. :/

 

[havetheveryfun]

From what I understand (again, I may be wrong), the primary reason why Shiny Things himself advocate readers here to invest in A35 is to act as a counter-weight to stocks.

This means that should a dip, or crash, happen, the bonds section of your portfolio should perform better due to the hypothesized correlation between stocks and bonds, thereby reducing your losses (allowing you to sleep better at night).

Having said that though, this isn't always the case as an article on Bloomberg this morning explained how China kept treasuries low despite the recent bloodbath. Sorry I can't find the article now.

If you're chasing higher marginal returns and is able to stomach higher risks, then yea, build your portfolio towards 100% stock-based. Nobody claims that it is wrong, having A35 as a part of your portfolio is just what Shiny Things recommend. It's not a heed-or-go-bankrupt kind of secret investing tactic.


P.S: I'm fully vested in stocks, contrary to what ST advocated. :/

actually I think instead of A35 you can also use cash instead, the point is not to be 100% in stocks and leave nothing as a "war chest" when stocks go down. The point of not being 100% in stocks is so that you dont have to sell when you need in of money during a recession, you can just use your cash portion or sell bonds to tide you through. Its just that bonds give more interest than if you were just to hold the cash itself, so why not ?