Official Shiny Things thread Episode V, The Empire Strikes Back

[ExEngineer]

A couple points:

1. Snorex mentioned early Critical Illness, not CI.

2. The insurance industry in Singapore doesn't seem to offer ECI policies (either standalone or attached as riders to life insurance) with terms that end at age 25. Or at least I haven't found any such ECI policies yet. That i-Care policy, for example, has a minimum term to age 75.

Good point on the “Early”, I missed that,

For regular CI, (non-early), I know from experience that it’s entirely possible to add such a rider to basic Term life cover ending at a young age eg 15, 20, 25 years. If that’s what you’re interested in.

 

[BBCWatcher]

Nope, I hadn't gotten the quote but can try to ask for it. Just a little concerned that I haven't actually heard of these guys. Not sure if I am overthinking it.

China Taiping (Singapore) has an AM Best financial strength rating of A (just reaffirmed and stable last week) and a S&P rating of A-. That's all rather good. Singlife is also S&P A-, for example. They're also within the SDIC's Policy Owners' Protection Scheme.

China Taiping (Singapore) was born in the 2002 merger of China Insurance Co. Ltd. (Singapore) and Tai Ping Insurance Co. Ltd. (Singapore). Those two companies date to 1939 and 1938 in Singapore respectively. China Taiping (Singapore) started writing life insurance policies in 2019, and that's the primary reason many people haven't heard of them yet. The company's parent is Hong Kong-based China Taiping Insurance, and that holding company also owns Taiping Life, the 5th largest insurance company in China.

 

[snorex]

Thanks BBC Watcher!

 

[Orochi_Death]

Hi Shiny,

I have been already doing DCA for IWDA for my monthly savings, buying the SAF term insurance and have max out my SA account.
I am looking to invest using my CPF OA money now and have found out about the Amundi world index fund in Endowus that i can invest in. Is it worthwhile considering that is a holding charge for Endowus and this Amundi world index fund LU2420245917 is having an entry charge (maximum) of 4.5%. This mean that for every 100 dollars invested, i will need to pay $4.50 upfront? - read from another post that 4.5% is not for CPF OA.

So in your view, if i want to replicate what i have been doing for IWDA (Cash) with my CPF OA money, do you think Amundi world index fund is a good choice, considering it is domicile in LUX (30%) instead of IRE (15%)?

 

[Shiny Things]

Hi Shiny,

I have been already doing DCA for IWDA for my monthly savings, buying the SAF term insurance and have max out my SA account.
I am looking to invest using my CPF OA money now and have found out about the Amundi world index fund in Endowus that i can invest in. Is it worthwhile considering that is a holding charge for Endowus and this Amundi world index fund LU2420245917 is having an entry charge (maximum) of 4.5%. This mean that for every 100 dollars invested, i will need to pay $4.50 upfront? - read from another post that 4.5% is not for CPF OA.

So in your view, if i want to replicate what i have been doing for IWDA (Cash) with my CPF OA money, do you think Amundi world index fund is a good choice, considering it is domicile in LUX (30%) instead of IRE (15%)?

Woof, no. If the entry fee is anywhere within an order of magnitude of 4.5% it's a ripoff. (The ongoing fees in that fund are 0.1%, which is quite reasonable for MSCI World index exposure, it's just the entry fee.)

It might be better to use your CPF for your bond or Singapore-stocks component, and keep IWDA in your regular brokerage account where the fees are lower. (I haven't done the math on the relative tax deferral benefit, though, because it's Sunday morning over here and my coffee hasn't kicked in.)

 

[BBCWatcher]

I am looking to invest using my CPF OA money now and have found out about the Amundi world index fund in Endowus that i can invest in. Is it worthwhile considering that is a holding charge for Endowus and this Amundi world index fund LU2420245917 is having an entry charge (maximum) of 4.5%.

Where are you seeing the entry charge? Endowus doesn’t have any entry charge for that fund as far as I can tell. There’s an ongoing Endowus charge (0.30% per year plus GST for a single fund), and there are CPF Investment Account-related fees levied by UOB, OCBC, or DBS, as applicable. Details here.

 

[bobobob]

Hi all,

Do you guys think it would make sense to replace MBH with Chocolate finance? https://www.chocolatefinance.com/

MBH dividends pays about 3.2%, which is what chocolate pays but chocolate pays daily and allows you to withdraw easily and without paying any fees to sell units.

 

[chyn_no]

Where are you seeing the entry charge? Endowus doesn’t have any entry charge for that fund as far as I can tell. There’s an ongoing Endowus charge (0.30% per year plus GST for a single fund), and there are CPF Investment Account-related fees levied by UOB, OCBC, or DBS, as applicable. Details here.

use poems. 0% fee. only fund level 0.1%

 

[FnangB]

Hey Shiny & BBCWatcher,

Regarding Bonds. It seems that you both favor Corps [1] (Notably LQDA / CRPA etc. (depending on the retirement currency etc.)).

However every time I cross-search for corporate bonds, LQDA.. on Bogleheads forum or Boglehead reddit, people there seem to majorly defend a different stance.
They vastly prefer Govt or at ""worst"" a mix like BND. Mentioning being full Corporate feels like being an heretic!

They mostly quote Bernstein and Swedroe "take your risks on the equity side" with the argument that:
"Corp adds back some link to Equity and more risk. If you want to take more risk, instead of adding Corp, you can simply lower you bond ratio and take more real equity"
(It seems that Bogle was defending more of a mix like BND, still with a good sovereign chunk).

What do you think about their point? A.k.a take more equity if you want more risk, but not add it in via Corps.

Thanks

[1] - "Govvy bonds are too conservative. Live a little." - Shiny Things - Dec 2019
- "FWIW Shiny Things and I agree that the bond portion of your long-term investment portfolio should generally not be in sovereign bonds but rather in an investment grade corporate bond fund." - BBCWatcher - Apr 2024

 

[chekseng80]

Poems has Amundi world index unit trust with zero sales charges. Does it make sense to invest CPF OA or srs with peoms than endowus now? Any hidden cost?

 

[Shiny Things]

Hey Shiny & BBCWatcher,

Regarding Bonds. It seems that you both favor Corps [1] (Notably LQDA / CRPA etc. (depending on the retirement currency etc.)).

However every time I cross-search for corporate bonds, LQDA.. on Bogleheads forum or Boglehead reddit, people there seem to majorly defend a different stance.
They vastly prefer Govt or at ""worst"" a mix like BND. Mentioning being full Corporate feels like being an heretic!

So this is a good question. TL;DR: As of early 2025, I think corporate bonds are still a better bet for SGD investors than government bonds, but it's not as clear-cut as it was.

Going a little deeper: the reason I generally prefer corporate bonds over government bonds is because corporate bonds give you a higher yield—and over the long term, that higher yield has more than compensated for the additional risk of defaults. It makes a meaningful difference to portfolio returns - about half a percent per year, and over a 20-year period that's an extra ten percentage points, which is real money.

That higher yield - the "spread" between corporate and government bonds - changes over time, though. And right now, it's at very tight levels: MBH's portfolio yield is only about 0.45% higher than A35's. (There's a few confounding variables there, the big one being that MBH's portfolio has a shorter duration to maturity and thus it has less interest rate risk - but that doesn't make a huge difference to the broad thesis.) That spread has to be offset against the expected losses from defaults.

I still think MBH (and corporate bonds in general) are worth it over the long term; and you shouldn't sell your MBH. But at current prices, I think they're about equally good, instead of MBH being clearly better.

 

[BBCWatcher]

….I still think MBH (and corporate bonds in general) are worth it over the long term; and you shouldn't sell your MBH. But at current prices, I think they're about equally good, instead of MBH being clearly better.

I think there’s a great way to enjoy the best of both bond worlds. CPF MA, SA, and RA pay 4.0% (or occasionally higher) interest. That’s not quite guaranteed, but it’s highly likely. And it’s attractive. For the bond (or “bond-like”) portion of your investment portfolio how about CPF (the higher interest rate parts) and MBH? Plus a dash of Singapore Savings Bonds for emergency reserve months 3 to 9 (for example).

 

[Shiny Things]

I think there’s a great way to enjoy the best of both bond worlds. CPF MA, SA, and RA pay 4.0% (or occasionally higher) interest. That’s not quite guaranteed, but it’s highly likely. And it’s attractive. For the bond (or “bond-like”) portion of your investment portfolio how about CPF (the higher interest rate parts) and MBH? Plus a dash of Singapore Savings Bonds for emergency reserve months 3 to 9 (for example).

Love it, this is a great idea.

 

[BBCWatcher]

Love it, this is a great idea.

And, if you really want to get fancy, add an “offshore“ investment grade corporate bond index fund, investment grade “total bond market” index fund, or investment grade sovereign bond index fund. It could be U.S. dollar or multi-currency bonds, and/or it could be nominal or real return bonds. This holding would help defend against the remotely possible chance something weird and bad happens to the Singapore dollar. However, I think that’s getting too fancy for most people. A global stock index fund would also fulfill this role albeit with greater volatility.

 

[KinoChoco]

Hi Shiny/BBC

May I ask, if I wanna now start DCA IKBR monthly, should I get VWRA or ISAC? It seems VWRA is the most popular, however I’ve also read that ISAC with now lower expense ratio and identical to VWRA, isn’t it a no brainer to get ISAC for someone just starting out on IKBR (like me)?

Or is there something I’m missing out? Do correct me if I’m wrong, appreciate your time.

 

[highsulphur]

Hi Shiny/BBC

May I ask, if I wanna now start DCA IKBR monthly, should I get VWRA or ISAC? It seems VWRA is the most popular, however I’ve also read that ISAC with now lower expense ratio and identical to VWRA, isn’t it a no brainer to get ISAC for someone just starting out on IKBR (like me)?

Or is there something I’m missing out? Do correct me if I’m wrong, appreciate your time.

I'll chip in first. I actually bought ISAC first and when I accumulated a certain after 3 years I switched to vwra. Both are equally liquid and shouldn't matter which one you choose

 

[KinoChoco]

I'll chip in first. I actually bought ISAC first and when I accumulated a certain after 3 years I switched to vwra. Both are equally liquid and shouldn't matter which one you choose

Why did you switch tho?

 

[highsulphur]

Why did you switch tho?

it got to a notional amount that I thought there is no harm is diverisfying to VWRA.

 

[twinbaby]

I would like to check what is the best investment strategy for peace of mind and mental health.

This is what currently I'm doing:
1) VWRA, Dca bi-weekly 800 USD, with 5000 USD upfront, using IBKR platform.
2) ESPP - currently I have accumulated 12 months worth of share, put about 10% per month, currently the company has shared buy back and scheme as well. ESPP is good because there will be no sell off for long, share buyback to buy back in times of downturn, 15% extra credit given, this is my favorite so far.
3) rest of the money in moomoo MMF, waiting to DCA into IBKR.
4) currently, I'm also investing in msci fund into CPF OA, start with 10k, Dca monthly 800 into it with OA.

Okay the reason why I like, DCA, because it gave me a psychological piece of mind, 1) the swing won't be as huge 2) I got to invest in bad times as well. I have plans to dollar cost average when it is 52 weeks low.

 

[BBCWatcher]

This is what currently I'm doing:
1) VWRA, Dca bi-weekly 800 USD....

Biweekly, as in US$800 every 2 weeks?!? You're working too hard.