*Official* Shiny Things club

[wiz]

ES3 looks interesting yield at 3.489% now

 

[JetStorm]

Pardon me if this has been addressed several times before, but I would like to consult on the public's general view regarding:

1) What is the difference between IWDA and VWRD exactly? And I know ST recommends IWDA for global-exposure, and why is that so? I know IWDA will reinvest its dividends automatically, and for VWRD we will have the option of whether to reinvest etc.?

Hope you guys can shed some light regarding this matter, thanks!

Hey i remember that I was the one who asked this question to ST back then lol. I think by now it was already answered. IWDA if you want the dividends auto invested. VWRD if you want to see dividends in cash.

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[Tornesoul]

Sure. The catch is that that is an AWFUL interest rate. You can buy a Singapore government bond maturing right around the same time that yields 2.36%. (It's 7PMS on the SGX - the 3.125% bond maturing September 2022 - and you should be able to get it around the $104.80 mark.)

UOB is robbing you blind if you buy that structured deposit. Don't buy it. It's a bad investment.



Yep, that's them.

Any reason for only dabbling if portfolio >6 digits?

And r they r demominated in sgd or usd? A lil confused. But sgx ya?

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[SpeedingBullet]

Related note - got my mitts on a Bloomy this afternoon and I was cruising around the bond quote functions - there's a nice offer on the SGX for R1LS, the 0.5% April 2018 SGS.

Someone's offering them at $98.20; they're worth $98.40. It's the difference between a 1.25% yield and a 1.4% yield, so if you've got a bit of cash you want to park for two years you should hop onto your broker and pay that offer.

Arrgghhhh this is too tempting

ES3 looks interesting yield at 3.489% now

wont stay there for long... expect dividend cuts from the O&G sector if low oil continues. I could be wrong though.. it'll rocket higher if the mkt crashes

 

[XiaoXiaMi96]

I was wondering how big the impact is from the withholding tax. I conducted a real test by buying SGD 600 equivalent of VT in US and same SGD 600 equivalent VWRD in LSE every month from July 2015.

I received 2 dividends in September and December for both VT & VWRD. For VT, I received $3.71 (after Withholding tax of $1.59) and $9.79 (after withholding tax of $4.19) for a total of $13.59.

For VWRD, I received $5.81 and $9.88 in September and December for a total of $15.69.

Difference in Dividend is $2.10.

The commission I had paid for VT is $1.00+0.34+0.34+0.34+0.34+0.34+0.34 (Jul2015 - Jan2016) for total of $3.04. $1.00 in July because I didn't change the default fixed pricing. Thereafter, I use tiered pricing.

The commission I had paid for VWRD is $5.00+1.94+1.94+1.94+1.94+1.94+1.94(Jul2015 - Jan2016) for total of $16.64. $5.00 in July because I didn't change the default fixed pricing. Thereafter, I use tiered pricing.

Difference in commission is $13.60.

So, buying ETF in US compare with buying the equivalent ETF in LSE is not really that bad. In fact, it is better.

Has anyone has the same experience?

I changed to tiered pricing and tried to buy VWRD/IWDA but is being charged USD 8.05 for commission instead of 1.94 stated by dao. Order value is around USD 10K. Can Shiny or any pro here advise? Am I doing something wrong here?

Using fixed pricing, the commision is same USD 5 though. IB cash account.

 

[The Accountant]

Related note - got my mitts on a Bloomy this afternoon and I was cruising around the bond quote functions - there's a nice offer on the SGX for R1LS, the 0.5% April 2018 SGS.

Someone's offering them at $98.20; they're worth $98.40. It's the difference between a 1.25% yield and a 1.4% yield, so if you've got a bit of cash you want to park for two years you should hop onto your broker and pay that offer.

Hmmm.. Any idea how much would the bid ask spread be? I don't see it on my ocbc trading account.

 

[limster]

I changed to tiered pricing and tried to buy VWRD/IWDA but is being charged USD 8.05 for commission instead of 1.94 stated by dao. Order value is around USD 10K. Can Shiny or any pro here advise? Am I doing something wrong here?

Using fixed pricing, the commision is same USD 5 though. IB cash account.

Here I help you: 0.08% of $10k is $8.

 

[XiaoXiaMi96]

Here I help you: 0.08% of $10k is $8.

ohh... I see. Sorry this sounds like a stupid question now with your simple answer. cos i always though tiered pricing will be cheaper than fixed pricing for bigger orders... thx!

 

[Shiny Things]

Any reason for only dabbling if portfolio >6 digits?

No reason not to pick up a $20 bill if it's lying on the floor, because that's basically what it was.

Hmmm.. Any idea how much would the bid ask spread be? I don't see it on my ocbc trading account.

It was 98.25/98.45 elsewhere, and 98.2 offered on the SGX.

And r they r demominated in sgd or usd? A lil confused. But sgx ya?

These are Singapore government bonds, so, SGD.

 

[Johnpierpontmorgan]

bonds got capital growth?

Yes it will
In an environment of falling interest rate from 1980 to 2000. Which is why pimco bond fund is one of the best performers during that era

 

[Shiny Things]

So worst case scenario is 2.5% * 5 + 1% = 13.5% interest given over 5 years 11 months. Principal is protected albeit by the bank itself, not SDIC.

I performed some calculations against 2% FD offered by some banks here and the result shows that this SD actually performs a bit better upon maturity. Downside is I will not be able to redeem the cash out earlier without incurring some serious penalty (4% if I'm not wrong).

Seeing that it's unlikely for a bank like UOB to crash in years to come and gives a slightly better interest than FD, I just couldn't find any catch in it. Just wondering if anyone sees the catch in this?

I'm going to follow up on this and explain just why it's such a bad deal.

Here's the thing. In another thread over here, we were talking about companies buying back their debts if the price of their old bonds went down, and explaining why that wouldn't really happen - because the yield on their new bonds would be the same as the yield on their old bonds.

But what if a company could issue new bonds to idiots?

What if a company could issue new bonds at, say, a 1.25% cheaper interest rate than its old bonds, because it sold the new bonds to people who didn't know what a fair price was?

That's what UOB is doing here.

The UOB structured deposit is going to have a yield somewhere between 2.3% and 2.75%, depending on what happens with that little equity kicker at the end. But that's not a fair yield for 6-year UOB debt, and UOB is trusting that their clients will be too dumb to realise that.

The fair yield for a 6-year UOB bond is something like 3.65% (compared to a 6-year Singapore government bond that yields about 2.25%; the difference is UOB's credit risk) - if they went to the institutional market and said "hey we want to borrow money for 5 years 11 months" that's about what they'd get charged. Or they could borrow that money off idiot retail investors for 2.75% (at worst!), pay back their outstanding debt which yields somewhere in the mid-3s, and pocket the difference as PnL.

(If we're being picky they wouldn't actually pay off that debt - they'd just revalue the structured deposit based on their internal funding curves, which take account of UOB's credit risk, but it still works out as PnL anyway.)

 

[Shiny Things]

bonds got capital growth?

Yes it will
In an environment of falling interest rate from 1980 to 2000. Which is why pimco bond fund is one of the best performers during that era

Not unless you're actively trading them (so you buy them, the yield goes up, then you sell them). If you've got a capital gain on a bond, that gain is going to bleed away to zero as the bond rolls down to maturity.

JPM, I don't even know what you're trying to say there? I get that you're saying "bond funds will go up when interest rates go down", but I don't get what the second half of your statement's saying.

"Pimco bond fund" isn't a thing, the fund you're probably thinking of is "Pimco Total Return". It was founded in 1987, not 1980. Interest rates kept falling long after 2000 (US Treasury yields bottomed out in 2012). And yes Total Return has historically performed better than other bond funds, but in an environment of falling interest rates, every bond fund's going to do well.

 

[Tornesoul]

No reason not to pick up a $20 bill if it's lying on the floor, because that's basically what it was.



It was 98.25/98.45 elsewhere, and 98.2 offered on the SGX.



These are Singapore government bonds, so, SGD.

My bad shiny, i meant why pick up ql2 and 3 only when portfolio is >6 digits haha

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[Shiny Things]

My bad shiny, i meant why pick up ql2 and 3 only when portfolio is >6 digits haha

Oh righto! Yeah, it's because you only want a small clip of them - 5% or so - and if your portfolio's not that big (under six figures) then they're not going to make much of an impact on your portfolio performance.

Also because adding extra ETFs makes your portfolio a bit trickier to manage. You want to start simple - with just two or three ETFs - and then expand your range of ETFs once your portfolio gets a bit bigger.

 

[yihao93]

sorry ah guys i wanna clarify sth

IWDA- invest in basket of WORLD stocks ( emerging markets and developed countries)
also it reinvests ur divvy right?

vusd - basket of s&p 500 - does it reinvest ur divvy? no right?

whats the etf for emerging markets only ? or isit better to just buy IWDA and cover both at once huh?

buying 1 share each to feel vested soon !

also, got any suggestions for bond etf? sg one ssb is better as said on forum so looking elsewhere.

 

[chuanz]

VWRD = Developed + EM, pays dividend
IWDA = Developed, accumulates
EIMI = EM, accumulates

 

[JetStorm]

also, got any suggestions for bond etf? sg one ssb is better as said on forum so looking elsewhere.

For bond portion of your portfolio, here is my take on this. Budget. If you are those who buys monthly, A35 is a cheaper option. SSB you need min 500 and it incurs $2(?) charge. A35 if buy 500 worth or about 400 shares will only incur 460-470 inclusive of fees using SCB, with change for a drink or two at a pub. If budget is tight you only need to buy 100 shares which you cost you less than $150 per month.

Buying via POSB with $500 monthly also incurs $2.50 in charges. So ultimately it is all about budget and cost. Cheers!

Sent from Nubia NX507J using GAGT

 

[Shiny Things]

sorry ah guys i wanna clarify sth

IWDA- invest in basket of WORLD stocks ( emerging markets and developed countries)
also it reinvests ur divvy right?

vusd - basket of s&p 500 - does it reinvest ur divvy? no right?

Almost right. IWDA includes the USA, but it doesn't include any emerging-markets exposure (which is fine for you if you live in Singapore, because Singapore's stock market is already pretty tightly coupled to emerging market stocks).

So if you buy IWDA, that'll give you all the international exposure you need.

also, got any suggestions for bond etf? sg one ssb is better as said on forum so looking elsewhere.

Just use A35 - the SSB is pretty good, but A35 is a tad better.

 

[newjersey]

hi Shiny Things,

1. do you think this recent China slowdown is going to lead to a global recession?

( it doesn't seem logical, as foreign direct investments in China isn't significant, no? )

2. why is a lowering price of crude oil bad for the economy, as China stated that the price of crude oil at US$30/barrel is low enough?

3. would the china slowdown + low crude oil prices + FED interest hike cause a black swan event = global recession???

Please share your thoughts on the above, thanks.

 

[toaddd]

Hi shiney. I have 50k savings. I read the 1st page of your thread. Do you think is a good time to buy sti etf now? I am looking to grow my money for like 15 years. Is it a good idea or should I just put in a bond or fd? Thanks so much!