*Official* BBCWatcher club

[Battery Operator]

Signing in BBCWatcher Fan Club (hey, it is a compliment)

 

[BBCWatcher]

Do you stick to passive Vanguard passive products or do you invest in individual stocks/bonds, given your deep financial knowledge and analytical skills?

My fund holdings are not exclusively Vanguard's. I like a couple other fund managers' offerings, too. Lately Schwab is attractive for certain funds.

I'm in broad agreement with the "Bogle philosophy," so it's rare that I invest in individual stocks or bonds. (Bogle was/is also "well equipped" to invest in individual stocks and bonds -- more than I am -- and he doesn't. Not much, anyway.) But I allow some exceptions when there's strong merit, and so would John Bogle, I assume. Here are some examples of exceptions:

* If your employer offers a stock purchase program and a non-trivial discount (5% or more, let's say) on share purchases, it's usually a good idea to participate.

* If somebody gives you individual stocks and/or bonds, e.g. via inheritance, it might make sense to hold them for a while in that original form.

* Individual government bonds sold at initial auction and (usually) held to maturity are often good deals. I've personally done some of that, and I think that's particularly true in Singapore. Some older wealthy people like individual, high quality U.S. municipal government bonds (purchased at initial issue and held to maturity), and sometimes they make sense, too.

* In the depths of the Global Financial Crisis there was perhaps some merit in buying a few individual stocks (or sectors anyway) that were particularly battered down, and then only as a minor sideline. That particular event was, hopefully, truly exceptional.

* If your reliable and trustworthy broker is offering you participation in an IPO such that you get some shares and then quickly and reliably cash out for an instant profit, then you might as well accept that bit of generosity, as long as there's no insider trading. (Don't repeat Martha Stewart's mistakes.) That's bad for the corporation issuing the shares since they're leaving money on the table, but that's not your problem.

* When there's a highly peculiar intersection of tax-related reasons to hold particular individual stocks.

* Participating in a government-sponsored privatization floatation might make sense.

I haven't personally experienced most of these exceptions, but I can imagine them.

 

[assiak71]

Whats your view on Autowealth for a Singaporean? They use Vanguard ETFs for equity.

 

[theokcoral]

Any thoughts on EIMI ETF, BBCW?

 

[swordsly]

Any thoughts on EIMI ETF, BBCW?

To add on to this, what about EIMU (the dividend version of EIMI)? Also why is its volume and price so low?

 

[BBCWatcher]

Whats your view on Autowealth for a Singaporean? They use Vanguard ETFs for equity.

The Vanguard part is terrific, but my understanding is that AutoWealth uses U.S. domiciled Vanguard funds, probably because they really must for several legitimate reasons. Thus there will be a 30% tax on dividends (for the U.S. listed stocks) rather than the 15% dividend tax rate available with Irish domiciled funds, including Vanguard's Irish domiciled funds such as VWRD.

It looks like AutoWealth focuses on a fund that tracks the MSCI World Index of stocks. About 60% of the MSCI World Index consists of U.S. listed stocks. Currently the S&P 500 (a good proxy for the U.S. portion of the MSCI World Index) has a ~1.8%/year gross dividend yield. Taking 15% of that (the tax difference) yields 0.27%/year. Then, 60% of that (the U.S. portion), is ~0.16%/year. So the tax treaty differential is adding roughly 0.16%/year of cost to what AutoWealth is doing versus an Irish domiciled equivalent such as, notably, IWDA -- and assuming my math and information is accurate enough.

That ~0.16%/year of additional tax expense might still be tolerable, but you just have to run the numbers in your particular situation.

AutoWealth (and its competitors) are not really appropriate for U.S. persons.

 

[BBCWatcher]

To add on to this, what about EIMU (the dividend version of EIMI)? Also why is its volume and price so low?

EIMI seems like a great, simple, low cost way for a non-U.S. person to get emerging markets stock exposure if that's what you want to do. EIMI is "accumulating," meaning dividends (net of any dividend taxes, as always) are automatically reinvested. EIMU is "distributing," meaning the dividends (again, net of any dividend taxes) are paid out to shareholders. They both have the same 0.18%/year management fee, which is really quite excellent by Irish domiciled/London traded fund standards (and rather good by global standards, for that matter). EIMU doesn't seem to have much trading volume, though, so you'd stick with EIMI. (EIMU should have a lower price than EIMI if they started off at the same price, which they probably did. The accumulating nature of EIMI tends to boost its share price over time relative to EIMU.)

A lot of non-U.S. persons resident in Singapore who are investing in stocks would pair IWDA with EIMI in a 90-10 ratio to simulate VWRD, Vanguard's single global stock index fund that has about 10% in emerging markets stocks. Of course, you're free to adjust that market weighted ratio if you wish to underweight or overweight emerging markets stocks. (I wouldn't, personally.)

 

[swordsly]

EIMI seems like a great, simple, low cost way for a non-U.S. person to get emerging markets stock exposure if that's what you want to do. EIMI is "accumulating," meaning dividends (net of any dividend taxes, as always) are automatically reinvested. EIMU is "distributing," meaning the dividends (again, net of any dividend taxes) are paid out to shareholders. They both have the same 0.18%/year management fee, which is really quite excellent by Irish domiciled/London traded fund standards (and rather good by global standards, for that matter). EIMU doesn't seem to have much trading volume, though, so you'd stick with EIMI. (EIMU should have a lower price than EIMI if they started off at the same price, which they probably did. The accumulating nature of EIMI tends to boost its share price over time relative to EIMU.)

A lot of non-U.S. persons resident in Singapore who are investing in stocks would pair IWDA with EIMI in a 90-10 ratio to simulate VWRD, Vanguard's single global stock index fund that has about 10% in emerging markets stocks. Of course, you're free to adjust that market weighted ratio if you wish to underweight or overweight emerging markets stocks. (I wouldn't, personally.)

EIMU seems to have just been introduced. There's no performance nor dividend records.

I know EIMI and EIMU track the same thing but why is the trading volume so much lower? Also, 28USD vs 4USD right now =\

 

[BBCWatcher]

I know EIMI and EIMU track the same thing but why is the trading volume so much lower?

Investors simply prefer the accumulating version of the fund, that's all. That preference could be due to simple inertia.

Also, 28USD vs 4USD right now =\

Whenever they started, EIMU's initial price was probably initially set to some EIMI "origin date" share price. And then they track(ed) along from there, with EIMI getting dividend accumulation/reinvesting along with any capital appreciation. EIMI should continue to widen its price gap with EIMU, as long as EIMI isn't split anyway. EIMI doesn't pay any cash dividends, whereas EIMU does, so that all makes sense.

I recall EIMI having a 0.25%/year management fee recently, so the lower 0.18%/year is quite nice to see.

....Net net, you can ignore EIMU, unless and until it develops higher trading volume.

 

[swordsly]

Investors simply prefer the accumulating version of the fund, that's all. That preference could be due to simple inertia.


Whenever they started, EIMU's initial price was probably initially set to some EIMI "origin date" share price. And then they track(ed) along from there, with EIMI getting dividend accumulation/reinvesting along with any capital appreciation. EIMI should continue to widen its price gap with EIMU, as long as EIMI isn't split anyway. EIMI doesn't pay any cash dividends, whereas EIMU does, so that all makes sense.

I recall EIMI having a 0.25%/year management fee recently, so the lower 0.18%/year is quite nice to see.

....Net net, you can ignore EIMU, unless and until it develops higher trading volume.

Good information. Just looking through EIMI as I look at the IWDA + EIMI recommendation.

Reason for being interested in EIMU instead being that given the volatility of emerging markets, I thought it might be safer to cash in the dividends first rather than bang on the appreciation and cumulation of the price.

 

[nash1999]

Just curious, what are your view on Critical Illness and Personal Accident?

My friends and some of the website I been to are saying that the important insurance that should be brought is Hospitalization,Critical Illness, Life and Personal Accident instead.

One of the article they brought up is this as to why critical illness is important:
https://www.todayonline.com/singapo...s-protection-needs-life-insurance-association

Edit:
Also they have made 2 points:
CI Survival rate is increasing, so more chances of CI needing to support future care, etc
Early CI Insurance can be useful in case need to replace income or cover treatment not covered by medisave

 

[BBCWatcher]

what plans are avail for foreign spouse?
out of the big three, my immediate concern is medical.
for simplicity sake, assume that no govt medical scheme is applicable.

Your assumption translates into "not a Permanent Resident," so let's assume that.

If your spouse could hypothetically return to his/her country, re-establish residence there, and enjoy reasonable or better medical care in that country's public medical system, with minimum fuss, then a Singapore local Integrated Shield plan could be a good fit. Spouses from many developed countries, particularly from Europe, would fit that profile. Or if your spouse is more likely than not to become a PR at some point, given enough time, then starting now with an Integrated Shield plan could make a lot of sense. However, only select Integrated Shield plans are available to foreigners, at least to "dependent" foreigners such as spouses. Prudential's PRUshield Plus, designed for public hospital A ward coverage, is one such plan, and in my view it's currently the best in its class.

NTUC Income appears to be the only carrier offering an Integrated Shield plan geared toward public hospital B1 ward coverage (Enhanced IncomeShield Basic) to foreigners. NTUC Income is also the only carrier offering an Integrated Shield plan (Enhanced IncomeShield C) geared toward public hospital B2+ ward coverage to anybody, and they do sell it to foreigners. So those are foreigners' only Integrated Shield options below public hospital A ward level. The premium gap won't be as big, though, because foreigners do not benefit as much from subsidies, and consequently Prudential might offer the best value to foreigners among the Integrated Shield plan providers. However, NTUC's "C" plan is particularly interesting if your spouse has a pre-existing condition since it's better coordinated with the ward class (B2+ or lower) that he/she would most likely check into for cost reasons. If your spouse is female, please note that KK Hospital offers B2+ ward class, which is most probably the best value hospital ward in Singapore. (It's air conditioned! But it's also KK Hospital, and they're good.)

As far as I know you can pay for your foreign spouse's base Integrated Shield plan using Medisave funds, and that's helpful because those funds are tax advantaged. Other types of medical insurance are not Medisave payable.

If you can get your spouse covered through employer-provided medical insurance of some kind, likely in combination with Integrated Shield coverage, that's great. Or if your spouse him/herself is working in Singapore and getting some employer-provided medical coverage, awesome. Employers will sometimes do something reasonably sensible and coordinate their benefits with Integrated Shield coverage.

is bupa as good , worse or better than cigna?
how easy or difficult are their claims process?

Now we're referring to "expatriate" oriented global medical insurance, and that can be the better option particularly when your spouse doesn't hail from a country offering a minimum fuss medical "backstop" and/or when your spouse is not expecting to stay in Singapore (not likely to be a PR in due course and to stay in Singapore in the future).

I had personal experience with group Cigna coverage for several years, and I loved it. It was gorgeous insurance, and I'm sure it was rather expensive, too. (I didn't pay for it, not directly anyway.) Claims processing was a bit on the slow side, and on a reimbursement basis almost always. But it was phenomenal coverage. There were no pre-existing condition limitations, no annual or lifetime caps, no waiting periods of any kind for newborns or for a new spouse, low out-of-pocket limits for covered services, and practically everything you can imagine and more was covered. It was also U.S. "Obamacare" compliant, and that's a good thing. Aetna, another U.S. carrier, is probably broadly similar for their top shelf group coverage.

If you're approaching your spouse's coverage from the non-group angle, then pre-existing conditions matter a lot. And the tricky part about pre-existing conditions is that an insurer won't cover them for individually issued policies (with some rare exceptions), so that means you'll naturally want to stick mostly or completely with the public medical system in Singapore. However, if your spouse is quite sure he/she doesn't have pre-existing medical conditions that could affect whether a claim is paid, then an individually issued "expat" policy could make some sense, particularly if your spouse's tastes in medical care run toward private medical care, if your spouse doesn't have reasonably fuss-free resumption of good public coverage in his/her home country, or if your spouse hops around the globe fairly often anyway. Decent or better "expat" medical insurance won't be inexpensive, though, but you can get some really good stuff if you're a good risk (no pre-existing conditions).

 

[BBCWatcher]

Just curious, what are your view on Critical Illness and Personal Accident?

Oversimplifying only slightly, CI and PA are older types of insurance (at least in Singapore), but as the article I linked to explains (and I agree), DII is a much higher insurance priority if you can get it. In other words, I don't think CI and PA fall into the essential insurance needs category.

DII does cover critical illnesses, accidents...any ailment or malady of any sort if it affects your ability to earn a living, and from that important point of view (defending income). (OK, with very few, universal exceptions like self-inflicted injuries, e.g. suicide attempts.) CI and PA are "named risks" types of insurance, whereas DII is an "all risks" type of insurance. I much prefer the latter. The article I linked to does a rather good job explaining the priorities, and I broadly agree with that article.

Another problem with CI and PA is that the payouts tend to be pretty limited. Imagine you're age 25, working and earning $3,500/month, and a bus runs you over and seriously messes you up. You can no longer work, for life. Wham, you've just lost $1.68 million of lifetime income ($3,500/month for 40 years, 2018 dollars, no salary increments assumed in this example). Do you know of any CI or PA policy that pays out anywhere near that much? I don't. It's $100K-$200K sort of payouts if you maximally qualify, typically. DII, however, pays out $1.24 million in this example (75% coverage less 6 months, to age 65). Aviva even offers a 3%/year payout escalating option once payouts start, and that could be quite useful. (There's a price for that, of course.) And no, that's not "cheap" insurance necessarily, but that's because it actually works.

....And if 75% coverage is too expensive right now, try 60% or 50%, then ratchet up when you can. Some decent coverage is better than none, and the "long tail" is the real risk you face if you're a working person (or about to work). Your biggest asset really is your future earning potential.

 

[Shiny Things]

I'll restate some basic facts about me and leave it at that:

Also a BBC fan, so clearly you have excellent taste.

Drinks on me if you're ever on the west-coast-best-coast.

 

[heng_ah]

Excellent explanation on essential insurances. Subscribed!

 

[assiak71]

How on earth did you land on hwz?

 

[Earnasyougrow]

Signing in to support. Bookmarked.

 

[lyndonmaxewell]

How on earth did you land on hwz?

Hardwarezone being a tech forum.. It all started when Mr BBCWatcher wanted to unlock his Softbank 708SC mobile phone.

 

[intime]

Chope seat.

 

[vegavega25]

Huge fan of BBCW, this thread is a fabulous idea.