Commodities

[revhappy]

Hello guys,

What is your view regarding commodities? I think they have bottomed out. I just invested 30K in Schroders AS commodity fund via Fundsupermart. Is this a good choice to play the commodities rebound, if any?

Sent from Xiaomi REDMI NOTE 4 using GAGT

 

[wahkao3]

useless assets
sit there and do nothing

and you need to pay for a warehouse to store them

 

[Mecisteus]

I don't think commodities have bottomed. China is not growing and consuming as much as they used to be.

2007 was the last peak of the commodity superbull cycle. The next one would be not so soon.

 

[limster]

useless assets
sit there and do nothing

and you need to pay for a warehouse to store them

I went to look at the fund

1.93% Expense ratio
0.4% platform fee

Launch price: $10.00
Current price: $4.42

Holding 11.3% gold and 7.8% silver.

Would you pay someone 2.4% a year to hold your gold and silver for you?

All I can say is, buying iFast & Schroeder's shares nao!

 

[antonpoh]

Hello guys,

What is your view regarding commodities? I think they have bottomed out. I just invested 30K in Schroders AS commodity fund via Fundsupermart. Is this a good choice to play the commodities rebound, if any?

This Schroders AS commodity fund is it the one in SGD? The 1 Yr Performance Return is -6.5539%. Leave it inside the Bank is better.

https://api.fundinfo.com/document/68ac34eddcb6588b082cab8f236bbbc7_156386/MR_SG_en_LU0319973649_RES_2017-05-31.pdf?apiKey=a99fa3fab241f7d96d7b68b2299a10df

 

[revhappy]

This Schroders AS commodity fund is it the one in SGD? The 1 Yr Performance Return is -6.5539%. Leave it inside the Bank is better.

https://api.fundinfo.com/document/68ac34eddcb6588b082cab8f236bbbc7_156386/MR_SG_en_LU0319973649_RES_2017-05-31.pdf?apiKey=a99fa3fab241f7d96d7b68b2299a10df

Yes, it is the SGD hedged share class. In less than 1 week I have already earned 1.61% or $482 on an investment of $30K. Bank gives better?

 

[Mecisteus]

This Schroders AS commodity fund is it the one in SGD? The 1 Yr Performance Return is -6.5539%. Leave it inside the Bank is better.

https://api.fundinfo.com/document/68ac34eddcb6588b082cab8f236bbbc7_156386/MR_SG_en_LU0319973649_RES_2017-05-31.pdf?apiKey=a99fa3fab241f7d96d7b68b2299a10df

That performance was based on history. He is buying now because he thinks the returns will be better going forward.

Anyway, just buy some ETFs. ie XLE, GLD, SLV. You have similar exposure.

 

[stjoe1]

Hello guys,

What is your view regarding commodities? I think they have bottomed out. I just invested 30K in Schroders AS commodity fund via Fundsupermart. Is this a good choice to play the commodities rebound, if any?

Sent from Xiaomi REDMI NOTE 4 using GAGT

Better buy commodities ETF. I am also start monitoring commodities ETF DBC and PDBC.

 

[antonpoh]

That performance was based on history. He is buying now because he thinks the returns will be better going forward.

Anyway, just buy some ETFs. ie XLE, GLD, SLV. You have similar exposure.

I know but if a fund can't perform for 5yrs, I won't give them another chance with my money. Anyway not all commodities drop but they manage to find most of them.

Btw, their 5 Yr Performance Return is -50%. This UT can forget about it.

 

[revhappy]

I went to look at the fund

1.93% Expense ratio
0.4% platform fee

Launch price: $10.00
Current price: $4.42

Holding 11.3% gold and 7.8% silver.

Would you pay someone 2.4% a year to hold your gold and silver for you?

All I can say is, buying iFast & Schroeder's shares nao!

So 11.3+7.8 is 100% for you? Do you know any other way of holding a diversified asset class consisting of oil, metals, agricultural commodities?

 

[limster]

Better buy commodities ETF. I am also start monitoring commodities ETF DBC and PDBC.

I used to be vested in commodities ETF but the lack of dividends, contango and backwardation, and high expense ratio compared to equity ETFs made it a losing proposition.

Then I used a screener to determine whether there were any equity ETFs that had some correlation with various commodity prices. There was 1 equities market that strongly correlated with oil as well as other markets with weaker correlation.

The market? Norway (yield 2.6% less withholding). Just nice that there is zero brokerage commissions if you buy NORW on Interactive Brokers. My other commodities proxy? Australia (yield 4.5% less withholding)

 

[limster]

So 11.3+7.8 is 100% for you? Do you know any other way of holding a diversified asset class consisting of oil, metals, agricultural commodities?

Yes, pls go to www.etf.com and generate a listing of commodities ETFs.

But seriously, you think 2.4% fees a year won't destroy your returns? I will go further and say that even a 0.90% fee a year will cause serious underperformance of commodities ETFs vs equity ETFs with much lower expense ratio and furthermore declare dividends.

 

[revhappy]

That performance was based on history. He is buying now because he thinks the returns will be better going forward.

Anyway, just buy some ETFs. ie XLE, GLD, SLV. You have similar exposure.

Which broker do you use for these ETFs? Fundsupermart has only Hong Kong and Singapore listed ETFs. There is SPDR GLD listed on HKEX, other than that I didnt find any commodity ETFs.

 

[revhappy]

Yes, pls go to www.etf.com and generate a listing of commodities ETFs.

But seriously, you think 2.4% fees a year won't destroy your returns?

As you noticed how the fund crashed from NAV 10 to 4, the fee is the least of the problems. Fees is relevant for dividend yield or fixed income funds. If commodities have indeed bottomed then they will rise 30-40% from here, the 2.4% is nothing.

 

[limster]

the 2.4% is nothing.

Thats what insurance agents have been trying to tell everyone here when they sell ILPs and other high cost products: People should not pay too much attention to the cost of ILP but instead focus on the projected returns. For some reason, people are not convinced.

 

[revhappy]

Yes, pls go to www.etf.com and generate a listing of commodities ETFs.

But seriously, you think 2.4% fees a year won't destroy your returns? I will go further and say that even a 0.90% fee a year will cause serious underperformance of commodities ETFs vs equity ETFs with much lower expense ratio and furthermore declare dividends.

Thanks for the link. I had a look at this ETF:

http://www.etf.com/DBC

Expense ratio is 0.89% and 5 years return is also close to -50%. So I dont see so much of a difference.

 

[revhappy]

I tried to find the DBC fund in SGX. Couldnt find it. There are lots of ETFs on SGX but not this DBC fund. Also all these commodity ETFs are in USD. Commodities typically go up when USD is weak. So in USD terms the ETF performs well but in SGD terms not so well. So an SGD hedged shareclass ETF makes sense. I couldnt find any SGD hedged share class ETF on SGX.

 

[limster]

Thanks for the link. I had a look at this ETF:

http://www.etf.com/DBC

Expense ratio is 0.89% and 5 years return is also close to -50%. So I dont see so much of a difference.

DBC is US$, so maybe you should compare the Schroder's US$ class to it.

When I look at the US$ class fund on FSM, the annualised 5 yr return is -13.15%. Meaning the total loss attributable to the fund manager's investment choices is more than 65% in USD and that is excluding platform fees.

S$ Hedging is an autopilot thing and has nothing to do with the fund manager's skill.

At the end of the day, you have put money into a very high risk investment. I hope the returns justify the risk you are taking (and that you know what risks you are taking)

 

[alexchia01]

As you noticed how the fund crashed from NAV 10 to 4, the fee is the least of the problems. Fees is relevant for dividend yield or fixed income funds. If commodities have indeed bottomed then they will rise 30-40% from here, the 2.4% is nothing.

Your 30-40% rise is not guaranteed, but your 2.4% yearly fee is guaranteed.

The problem with unit trust fund is that they don't guarantee your success, they only sell you possibility, no matter how unlikely it's going to succeed. However, they are guarantee to earn your money regardless of your success or failure.

Your fund can fall 30-40% and they still earn your 2.4%. If you are okay with this then investing may not be for you.

If you truly want to invest, at least learn how to do it properly.

 

[limster]

Yes, it is the SGD hedged share class. In less than 1 week I have already earned 1.61% or $482 on an investment of $30K. Bank gives better?

This is the 1 week chart for NORW. I sold my commodities ETF and now using NORW as an oil proxy that declares dividends. Every month you can compare performance of the Schroders unit trust to NORW.