Need Help! Unit trust investment

[BBCWatcher]

Still, I think it's pretty ridiculous in term of how much fees you are paying for it. There's a small collection of ETFs domiciled in the US, so you are paying a lot of taxes (like 30%) on dividends. Manulife fund managers are charging 1.35% to just sit on these few ETFs. There's an additional 0.48% of fees handling the funds and including the fees for the underlying funds, resulting in a Total Expense Ratio of 1.83%/year.

And on top of all that, you are also paying 2.5%/year platform fee.

It's very safe to say D0nut94's relative can do better.

 

[tangent314]

Yeah, I can't imagine anyone being happy with a 4.44%/year drag while we are here hoping that competition between Vanguard and iShares will bring IWDA's TER to below 0.20%....

 

[BBCWatcher]

Yeah, I can't imagine anyone being happy with a 4.44%/year drag while we are here hoping that competition between Vanguard and iShares will bring IWDA's TER to below 0.20%....

There are small currency conversion and broker commission charges in/out to add to the 0.20% per year, but even so there's just no comparison. That drag is HUGE. Avoid! Run away!

As a fun comparison, U.S. fund manager Fidelity charges literally zero for their U.S. domiciled index mutual funds FZROX and FZILX. No minimums, no trading costs, no custody charges, no nothing, U.S. dollar denominated. I'm a fan. However, they're not ideal for non-U.S. persons resident in Singapore. FZROX is a broad U.S. listed stock index fund, and FZILX is a broad global (ex-U.S.) stock index fund (including emerging markets).

 

[D0nut94]

This is a dividend paying fund, so if you are just looking at NAV performance it doesn't tell the full picture.

Still, I think it's pretty ridiculous in term of how much fees you are paying for it. There's a small collection of ETFs domiciled in the US, so you are paying a lot of taxes (like 30%) on dividends. Manulife fund managers are charging 1.35% to just sit on these few ETFs. There's an additional 0.48% of fees handling the funds and including the fees for the underlying funds, resulting in a Total Expense Ratio of 1.83%/year.

And on top of all that, you are also paying 2.5%/year platform fee.

Mind elaborating on your first paragraph? If the NAV drops I'm still considered as losing money right?

Many thanks to everyone who offered their suggestions!

 

[Mr Llama]

I just set up VAP into lion seasonal series ( growth) with dollardex. Expenses ratio max 0.5%.it a mix of ETF and house fund. There is no sales charges and no platform fee.

This is a Fund of Funds. Meaning you could be 0.5% better off if you purchase a portfolio of Funds yourself

Fund of Funds meaning you are paying 0.5%, and also another tier of Expense ratio fees in the Funds that the Fund hold.

 

[limster]

This is a Fund of Funds. Meaning you could be 0.5% better off if you purchase a portfolio of Funds yourself

Fund of Funds meaning you are paying 0.5%, and also another tier of Expense ratio fees in the Funds that the Fund hold.

My back of the envelope calculations suggests that the overall TER including the ER of the underlying funds is still less than 1.0%, so by Singapore standards this is very reasonable.

The sole reservation I have with this fund is that I don't think the fixed income fund managers for LionGlobal are that good when I look at the annualised performance of those funds. Maybe they cannot afford to hire the best managers for fixed income so all they do is hug the index and charge fees?

Seems like everyone knew interest rate hikes were coming, so why didn't they mitigate interest rate risk by swapping everything into short-dated bonds, if they did that they would have massively outperformed their benchmark.

 

[cscs3]

There are small currency conversion and broker commission charges in/out to add to the 0.20% per year, but even so there's just no comparison. That drag is HUGE. Avoid! Run away!

As a fun comparison, U.S. fund manager Fidelity charges literally zero for their U.S. domiciled index mutual funds FZROX and FZILX. No minimums, no trading costs, no custody charges, no nothing, U.S. dollar denominated. I'm a fan. However, they're not ideal for non-U.S. persons resident in Singapore. FZROX is a broad U.S. listed stock index fund, and FZILX is a broad global (ex-U.S.) stock index fund (including emerging markets).

Also need to factor in lost in exchange rate. Both way as finally you will need to change back to S$.

 

[kehyi4]

This is a Fund of Funds. Meaning you could be 0.5% better off if you purchase a portfolio of Funds yourself

Fund of Funds meaning you are paying 0.5%, and also another tier of Expense ratio fees in the Funds that the Fund hold.

My back of the envelope calculations suggests that the overall TER including the ER of the underlying funds is still less than 1.0%, so by Singapore standards this is very reasonable...

As far as I understand it, LionGlobal is capping the TER at 0.5%, ie the total cost to the investor is 0.5%. I mean, that's what the "T" in TER stands for, right? Unless LionGlobal is being creative with the truth

https://www.lgidirect.com.sg/allseasonsfund/faq/

1. What is the LionGlobal All Seasons Fund (“Fund”)?
The Fund is a globally-diversified balanced fund that is accessible to all investors. The Fund offers a clear cost advantage whereby the cost of investing* is capped at 0.50% per annum (p.a.) ...

9. Will I be charged double layer of fees since the portfolio invests into other active funds?
No, the management fee of 0.25% p.a. is charged only once, as the underlying active funds’ management fees will be fully rebated**. This rebate will be done on a monthly basis.
**Rebate will only be for underlying Lion Global Investors’ funds.

 

[limster]

As far as I understand it, LionGlobal is capping the TER at 0.5%, ie the total cost to the investor is 0.5%. I mean, that's what the "T" in TER stands for, right? Unless LionGlobal is being creative with the truth

https://www.lgidirect.com.sg/allseasonsfund/faq/

1. What is the LionGlobal All Seasons Fund (“Fund”)?
The Fund is a globally-diversified balanced fund that is accessible to all investors. The Fund offers a clear cost advantage whereby the cost of investing* is capped at 0.50% per annum (p.a.) ...

9. Will I be charged double layer of fees since the portfolio invests into other active funds?
No, the management fee of 0.25% p.a. is charged only once, as the underlying active funds’ management fees will be fully rebated**. This rebate will be done on a monthly basis.
**Rebate will only be for underlying Lion Global Investors’ funds.

(1) Lion active funds - rebate only the management fees. the underlying active funds have other expenses, not only management fees. If they were giving you a rebate on the entire expense ratio, they would have said so, and not just rebate only the management fee.

(2) passive funds - no rebate.

Do note how TER is calculated. If Lionglobal promised to cap TER at 0.5%, why would they additionally have to rebate the management fee? Is it because the underlying management fee is not included in the TER thats why they have to rebate it?

Have to wait for their 1st year annual report to be sure...

 

[blue_line]

As far as I understand it, LionGlobal is capping the TER at 0.5%, ie the total cost to the investor is 0.5%. I mean, that's what the "T" in TER stands for, right? Unless LionGlobal is being creative with the truth

https://www.lgidirect.com.sg/allseasonsfund/faq/

1. What is the LionGlobal All Seasons Fund (“Fund”)?
The Fund is a globally-diversified balanced fund that is accessible to all investors. The Fund offers a clear cost advantage whereby the cost of investing* is capped at 0.50% per annum (p.a.) ...

9. Will I be charged double layer of fees since the portfolio invests into other active funds?
No, the management fee of 0.25% p.a. is charged only once, as the underlying active funds’ management fees will be fully rebated**. This rebate will be done on a monthly basis.
**Rebate will only be for underlying Lion Global Investors’ funds.

This is how I understand it as well.

 

[tangent314]

I've looked at annual reports for a few other UTs that buy into other funds and the TER is inclusive of all fees for the underlying funds if I'm understanding the reports correctly, so this seems to be the common practice for 'fund of funds' UTs.

 

[JuniorLion]

I'm not a fan of buying Fund of Funds. Just like Stashaway, you pay them money to manage a bunch of ETFs for you and they claim they can balance it well (e.g. 'Sectoral Rotation ETF').

 

[tangent314]

It won't be my first choice either, but there are some good use cases for that, the most obvious being you can buy them using SRS, and it's easy to set up an automatic RSP, which makes this suitable for a lot people out there with an aversion to manually buying ETFs through a broker every month.

 

[tangent314]

Mind elaborating on your first paragraph? If the NAV drops I'm still considered as losing money right?

Sorry, I missed this earlier. Hope you're still around.

If you purchase a fund for $10000 and after one year it pays you $500 in dividends and if the value of the fund drops to $9500, you don't exactly lose money. The fund is performing at 0%.

Generally when calculating the actual performances of a fund, reinvestment of dividends is assumed.

 

[saggice]

how about templeton global total return fund? looks good with 8% returns

 

[hwmook]

how about templeton global total return fund? looks good with 8% returns

8% returns from when to when? I don't see where did you get the 8% for.

 

[BBCWatcher]

how about templeton global total return fund?

You mean this fund? That's a global bond fund.

looks good with 8% returns

The fund hasn't been generating 8% returns. Where do you see that?

It has an up to 5.0% initial sales charge (avoidable on a zero fee platform) and a total expense ratio of 1.41%, which is quite expensive and not good at all.

If you want a global bond fund, try symbol CORP on the London Stock Exchange. It has a 0.20% expense ratio and holds over 7,000 bonds. Or, since that Templeton unit trust looks like it holds very junky bonds, try HYLA. HYLA has a 0.50% expense ratio and is accumulating. HYLA holds over 1,400 bonds, a big bump up from the ~188 Templeton holds in that unit trust.

 

[saggice]

on bloomberg
under TGTRADH

8% returns from when to when? I don't see where did you get the 8% for.

 

[tangent314]

Well the factsheet shows a performance of 4.29% since inception for the SGD version of the fund.

 

[saggice]

i was looking at yield to maturity of 9%.
i guess that’s going to be a longer term kind

Well the factsheet shows a performance of 4.29% since inception for the SGD version of the fund.