*Official* Shiny Things club - Part 2

[flowerpalms]

POSB and DBS are the same .

Depends on your monthly investment.

Less than 1k: POSB RSP for G3B and MBH, SCB for IWDA
1k and above: SCB for ES3 and MBH, IB for IWDA

Hi all - Noob here to ST's retirement strategy. I'm kinda halfway reading the book and making plans to start investing. (thanks ST for sharing - probably one of the clearest and easiest to read financial material I've ever come across!)

Is there any difference between the POSB Invest saver and DBS Invest saver ? They are considered as the same and one bank right, yet they each have an Invest Saver information page.

They both seem to have the same sales charge also ? I assume sales charge are charged based on how much you invest in ? And how about when you are selling it off - are there any charges for it in due time when you wish to sell ?

"*Sales charge of 0.5% for ABF Singapore Bond Index Fund and 0.82% for Nikko AM Singapore STI ETF apply."

Also - Shiny's book mentioned anything more than 0.5% is an excessive high fee to pay. However, I note that many season posters here are buying G3B from POSB Invest Saver (0.82%), I'm assuming we are accepting the high charges of 0.82% as it is as there are no better competition around? I'm aware that the original recommendation is to go with Maybank kim eng but have also read around here and checked that they have discontinued with the regular investment account ?

 

[spadestick]

Hi there,

Newbie here, I got to the London Stock Exchange (LSE) part in Standard Chartered (SC) Trading platform - looking to buy IDWA - do I have to trade in GBP or can I trade in SGD? I'm getting confused as it's not indicating anything and I may have to open / fund other currencies in order to do that... thanks in advance!

 

[assiak71]

Hi there,

Newbie here, I got to the London Stock Exchange (LSE) part in Standard Chartered (SC) Trading platform - looking to buy IDWA - do I have to trade in GBP or can I trade in SGD? I'm getting confused as it's not indicating anything and I may have to open / fund other currencies in order to do that... thanks in advance!

Iwda is in usd. You need usd settlement acc and prefund it first

Why do you not buy vwra instead

 

[flowerpalms]

You have to set up the US trading settlement account and enable the LSE. IWDA is traded in USD

Hi there,

Newbie here, I got to the London Stock Exchange (LSE) part in Standard Chartered (SC) Trading platform - looking to buy IDWA - do I have to trade in GBP or can I trade in SGD? I'm getting confused as it's not indicating anything and I may have to open / fund other currencies in order to do that... thanks in advance!

 

[cassowary18]

Or Interactive Brokers?

Haha, unfortunately IB's minimum $10 fee per month does not suit me.

Since I am a dividend investors, one years' dividends, around 4%, more than 'cover' the trading comms and fx spread already.

You can say that, but aren't we all looking to minimize our fees as much as possible? Of course in the grand scheme of things, SCB's fees aren't that bad honestly. At least they don't charge custody or monthly maintenance fees.

 

[cassowary18]

I was under the impression that you will simply be given a Saxo segregated account. If I am not wrong, you do need to pay Saxo trading fees, which is not cheap. Do check it out and let us know

So I messaged them and finally got a reply.
"Good morning, apologies for the delayed response, investments on our platform are free up to USD 50,000 and all the fees are soaked up by our company. There are no custody fees for the kristals which are available on our platform"

"In case you are wondering how we are sustainable, that's where the Private Wealth plan comes in where clients have their own Saxo account which we manage, and the average client ticket size is around USD 250,000"

So basically, the rich clients are subsidizing the small retail investors! Score one for the little ones! will be purchasing my investments on Kristal.AI!

 

[Shiny Things]

Hi all, i'm currently 26 this year, looking to start investing.
I've bought ST's book and wanted to invest in ES3 first with Maybank KE.
But just found out that they no longer has the monthly investment plan.
I will be investing around $300 per month and would like to purchase ES3 first.
May i know should i purchase ES3 with SCB or DBS-IS? Sorry for my noob question.

Yeah, I should update that. Use POSB-IS.

Of course, if the investment value reached $100K or frequent monthly trading, using IB will be more cost effective. Am I missing anything out on IB vs Saxo?
[/QUTOE]

Yes. You're missing that they're both more expensive than using Standard Chartered.

Just to make sure i'm interpreting correctly.
So to sell all A35 and lump sum into MBH?

Yep.

Hi all - Noob here to ST's retirement strategy. I'm kinda halfway reading the book and making plans to start investing. (thanks ST for sharing - probably one of the clearest and easiest to read financial material I've ever come across!)

Thanks! Glad you enjoyed it!

Is there any difference between the POSB Invest saver and DBS Invest saver ?

Nope.

Also - Shiny's book mentioned anything more than 0.5% is an excessive high fee to pay. However, I note that many season posters here are buying G3B from POSB Invest Saver (0.82%), I'm assuming we are accepting the high charges of 0.82% as it is as there are no better competition around?

Sort of. The good thing about POSB IS is that they have no minimum brokerage fee per transaction, whereas at a lot of other brokers you'd pay a $10 minimum. That makes it worth using POSB-IS.

Hi there,

Newbie here, I got to the London Stock Exchange (LSE) part in Standard Chartered (SC) Trading platform - looking to buy IDWA - do I have to trade in GBP or can I trade in SGD?

None of the above. IWDA (the fund you're thinking of) is listed in USD.

So basically, the rich clients are subsidizing the small retail investors! Score one for the little ones! will be purchasing my investments

No, come on, don't be ridiculous. You don't even know what they're going to invest you into.

The reason for the higher overseas investment allocation is the chance to get better returns - is this allocation too risky?

It seems like a bet that global markets will continue to outperform Singaporean markets, and I don't think that's a sure thing. Do you actually have some knowledge here, or is this just thinking "wow, global markets have done so well in the past, surely that will continue"?

 

[spadestick]

Thanks Joshua, Flowerpalms and assiak - Ok I've funded the USD portion, when I was trying to buy the stock IWDA on the LSE in USD - it popped a window to do a "CAR" check and a "understand the risks" agreement. the stock got rejected, and now I think I'm waiting for "approval". Will it happen? got to wait and see... man, investing is not straightforward at all, I got rejected twice for trying to purchase ES3 at current stock price, looks like I have to go higher and I forgot that I can't trade the SGX at night! Next I have to refer to Shiny's book on how to take into account these difference when Standard Chartered Bank (SCB) is charging exorbitant SGD to USD exchange rates.

Have to be patient! My day job is definitely not in this field!

 

[spadestick]

Quick update : I've passed the CAR test - now I've placed an order on IWDA and this is result of the fees!
Stamp Duty =34.88
Levy = 0.00
Brokerage Fees = 17.44
GST = 3.66
Total Fees = 55.98 !!

Is this a lot?! It's not been fulfilled yet - not sure if I should get out at these kinds of fees!?

 

[flowerpalms]

Trust me, IB is harder. But the book has instructions so good to follow. When in doubt, you can also use their support chat

I hope you bougnt your shares at not the current price, but a few cents above the offer price.

Lastly, be it ES3, MBH or IWDA, only buy when the market is open!!!

Thanks Joshua, Flowerpalms and assiak - Ok I've funded the USD portion, when I was trying to buy the stock IWDA on the LSE in USD - it popped a window to do a "CAR" check and a "understand the risks" agreement. the stock got rejected, and now I think I'm waiting for "approval". Will it happen? got to wait and see... man, investing is not straightforward at all, I got rejected twice for trying to purchase ES3 at current stock price, looks like I have to go higher and I forgot that I can't trade the SGX at night! Next I have to refer to Shiny's book on how to take into account these difference when Standard Chartered Bank (SCB) is charging exorbitant SGD to USD exchange rates.

Have to be patient! My day job is definitely not in this field!

 

[Shiny Things]

Quick update : I've passed the CAR test - now I've placed an order on IWDA and this is result of the fees!
Stamp Duty =34.88
Levy = 0.00
Brokerage Fees = 17.44
GST = 3.66
Total Fees = 55.98 !!

Is this a lot?! It's not been fulfilled yet - not sure if I should get out at these kinds of fees!?

The stamp duty is wrong. Stanchart incorrectly applies UK stamp duty to IWDA trades, but IWDA - like all other ETFs listed in London - is not subject to stamp duty. You'll see the correct amount debited from your account in a couple days when the trade settles.

 

[Okenba]

Yeah, I should update that. Use POSB-IS.

Sort of. The good thing about POSB IS is that they have no minimum brokerage fee per transaction, whereas at a lot of other brokers you'd pay a $10 minimum. That makes it worth using POSB-IS.

None of the above. IWDA (the fund you're thinking of) is listed in USD.

Question:
For local ETFs, there are the RSS from POSB/DBS, OCBC, Poems.
Are there any RSS equivalents for global ETFs?
Is there a way to automate investing into IWDA or VWRA?

 

[ashrmsh]

It seems like a bet that global markets will continue to outperform Singaporean markets, and I don't think that's a sure thing. Do you actually have some knowledge here, or is this just thinking "wow, global markets have done so well in the past, surely that will continue"?

Haha yeah you got me there! I'm a complete newbie, so I'm mostly only going by the contents of your book

You mentioned the higher risks and higher returns associated with global investments, which one should be able to ride out provided they start early. Since I'm starting at 22, would you still recommend a 50-50 local-global split?

Thanks again for all the help, both on this forum as well as your book!

 

[dullthings]

May I ask if there a website or source of raw data available where we can try to back-test various ratios of IWDA/MBH/A35? Also, since Invest Saver has 4 etfs now (A35/MBH/CFA/G3B), hope to find out how adding CFA to the mix can improve the portfolio’s resilience or yields.

I know this is slightly beyond the scope of this thread (straight forward allocation to IWDA/G3B/MBH 40:40:20)... but there isn’t additional transaction costs if we buy more types of etf via POSB. I do acknowledge the 4 POSB ETFs have different expense ratios...

Also, maybe it is time to have a 2020 revision of the book, to address the FAQs that many have brought up (with respect to Maybank’s exit from MIP, queries with regards to robos, various ETFs such as new ones avail in POSB and VWRA etc).

 

[eD1s0n]

Question:
For local ETFs, there are the RSS from POSB/DBS, OCBC, Poems.
Are there any RSS equivalents for global ETFs?
Is there a way to automate investing into IWDA or VWRA?

Can achieve something similar using robo. But most of them use US listed etfs

 

[cassowary18]

No, come on, don't be ridiculous. You don't even know what they're going to invest you into.

You can buy IWDA, ES3, and A35 straight from them.

 

[spadestick]

Thanks Joshua! Though the process here is not listed in your book - amazing that you know that we can get back the stamp duty! Thanks for the reassurance

Thanks flowerpalm for the tips! Appreciate this greatly!

 

[wheel1983]

IB is the current low cost leader for regular savers who are long-term investors and who have "medium" or "large" savings flows.

What would be a "medium" or "large" savings for to use IB?

No, not really. You're probably better off placing one buy order for VWRA. Then you have no rebalancing to do between developed economy stock market and emerging economy stock market stocks -- VWRA handles that all for you, internally in the fund -- and you'll reduce your commission at Standard Chartered by roughly US$10. VWRA has a 2 basis point per year higher management charge than IWRA, but that's very reasonable indeed for the automatic rebalancing and initial commission savings. The initial commission savings is worth about 10 basis points before compounding, so that pays for roughly 6 years of that +2 basis point VWRA management fee. Automatic rebalancing then takes over from there as an ongoing benefit.


Great, even better than great. So why aren't you planning to DCA the global stock index fund leg, too?

So now I change my strategy, i.e DCA to VWRA. Let's say i have a lump sum of $10K to invest. What would be the regular amount to split to best optimize the charges? Why would DCA work better, cos to avoid timing the market?


Also, currently I am contributing monthly to G3B and MBH for 3 months already. Seems like that would not be optimising the cost of investment. Let's say I would want to do DCA to all 3 legs with a monthly investment of $1500, and i split $600 to G3B and $600 to VWRA and $300 to MBH, i shouldn't do this monthly cos of the cost right? that means this month i contribute $1800 to VWRA, next month i contribute $1800 to G3B and the 3rd month i contribute $900 to MBH, and repeat. Would that be a more sound investment plan? Meanwhile i try to accumulate my warchest so that i can sustain this plan.

And with this plan seems like subscribing to stanchart for the global leg is more reasonable. Any advice?

Thanks BCCWatcher and Shiny Things for advice!! Really great to read the posts on this blog. Unfortunately, there are so many posts in this thread that i couldn't capture everything so pardon if you have to repeat yourself in explaining certain things.

 

[Okenba]

What would be a "medium" or "large" savings for to use IB?

100k USD

So now I change my strategy, i.e DCA to VWRA. Let's say i have a lump sum of $10K to invest. What would be the regular amount to split to best optimize the charges? Why would DCA work better, cos to avoid timing the market?


Also, currently I am contributing monthly to G3B and MBH for 3 months already. Seems like that would not be optimising the cost of investment. Let's say I would want to do DCA to all 3 legs with a monthly investment of $1500, and i split $600 to G3B and $600 to VWRA and $300 to MBH, i shouldn't do this monthly cos of the cost right? that means this month i contribute $1800 to VWRA, next month i contribute $1800 to G3B and the 3rd month i contribute $900 to MBH, and repeat. Would that be a more sound investment plan? Meanwhile i try to accumulate my warchest so that i can sustain this plan.

And with this plan seems like subscribing to stanchart for the global leg is more reasonable. Any advice?

So 40% Global Equities, 40% SG Equities, 20% Bonds.

My understanding is that Portfolio is not so much about ensuring that you invest in that ratio, but more about keeping your investments in that ratio.

If Equities go up, they will end up being a larger %, and so you cash in some of them and use the money to top-up the other parts of your portfolio that are underbalanced.

Since we are talking about DCA, you don't need to cash in, but just use your next batch of money to top-up the other parts that are lagging behind.

In this sense, there is no strict rotation of buying all parts of the portfolio, just a constant topping-up of which-ever part is lagging behind.
IE. If stock market goes on a long bull run, your equities will rise disproportionate to your bonds, so you may spend several months topping-up your bonds and not buying as much equities.

 

[ashrmsh]

So now I change my strategy, i.e DCA to VWRA.

Since VWRA is accumulating (unlike VWRD), and looks at both developed and emerging countries, is this a better choice compared to IWDA, in terms of higher returns? Or has it not been around long enough to predict its long-term performance?