Official Shiny Things thread—Part III

[chinta]

Which broker is cheaper for SG is purely a maths problem. For some investors, philips is cheaper, some IBKR is cheaper, and for some, FSM is even cheaper.

user cclee created a spreadsheet for which broker is cheaper for foreign shares, maybe he can expand the spreadsheet to which broker is cheaper for SG shares, to help those who can't do the maths

limster, good idea. Where can I find that spreadsheet?

 

[chinta]

POEMS's no minimum charges is a promotion until end of 2020 if you read the fineprint.



AND dividend handling fee:

Hi zoneguard, most likely they have to extend the promotion to stay competitive. Phillips also has free live data for Singapore, US markets. If one can manage to trade at least once per quarter, their offer seems better.
Any other missing details are welcome for discussion.

 

[CWL84]

limster, good idea. Where can I find that spreadsheet?

Here you go...

There are often questions about using SCB vs IBKR, and what if buying monthly/bimonthly/quarterly... I tried to model the costs of the commonly discussed options in a spreadsheet -- no idea if it will make sense or be useful to anyone else, but here it is:

https://docs.google.com/spreadsheets/d/1BqIhbYNJF7VJbtj6PS08Csbyx1s4vs_03Kvh0pPRUCI/view#gid=0

I'm sure someone will point out if there are any glaring errors

I did find it a bit surprising that while it makes sense to use IBKR over SC if you're intending to buy $700/mth of IWDA on monthly basis, SC is still cheaper up to $1800/mth on quarterly basis. I'm not sure how to weigh the value of clocking in more time-in-market, to decide between investing monthly over bimonthly or quarterly.

(You'll have to make a copy for yourself to plug in your favourite scenario. Click on File -> Make a copy.)

 

[Converged]

Hi all, just realised ibkrsg dont allow the purchase of fractional shares. Any possible reasons for this ?

Posted from PCWX using Nokia 3310

 

[zoneguard]

Hi zoneguard, most likely they have to extend the promotion to stay competitive. Phillips also has free live data for Singapore, US markets. If one can manage to trade at least once per quarter, their offer seems better.
Any other missing details are welcome for discussion.

Well, if they don't extend the promotion and your holdings are already custodized with Phillips and you start paying dividend handling fee?

I don't see a compelling reason to start using this broker when there are other better alternatives - IB SG, FSMOne , SCB. The live market data isn't really a big plus point if you are in this thread and subscribe to the buy/hold and DCA.

 

[little pupsky]

so you can finally, FINALLY, put IWDA and ES3 in the same account without paying horrifically large fees somewhere along the line.

Oh so local counters like ES3 bought using IBKR SG won’t go into CDP?

 

[highsulphur]

Oh so local counters like ES3 bought using IBKR SG won*********t go into CDP?

Likely no cdp

 

[jugzter]

VWRA as global index fund

Hi Shiny Things,

Long-time reader, first time poster. I read your entire book and found it educational, relevant, and highly entertaining, especially your Singapore-related commentary. Highly recommended for Singapore-based investors!

What are your thoughts on VWRA as the alternative to IWDA? I think it warrants the Shiny Things Seal of Approval:

• It is globally diversified and low-cost. For only 0.22% expense ratio (just 2 basis points higher than IWDA), it includes both developed and emerging markets, thus is even more diversified than IWDA. And it's simpler to implement than IWDA+EIMI.
• Accumulating
• Domiciled in Ireland
• Physical ETF

A number of people seem to be concerned with VWRA's lower volume and higher bid-ask spread. They seem to confuse an ETF's volume with its liquidity. However, what really determines an ETF's liquidity is its underlying securities, which in VWRA's case, is a non-issue since its underlying holdings are the world's biggest companies by market cap.
JP Morgan has an insightful paper on this called "Debunking myths about ETF liquidity" (I cannot link here as I'm not experienced enough on HWZ).
Unless one is trading frequently (which I presume we aren't since we're all long-term investors here), he/she shouldn't be overly concerned about the bid-ask spreads.

Personally, I've switched my funds from IWDA to VWRA a few months ago and hasn't looked back since.

Thanks in advance!

 

[Rknight]

Hi,

I have reached a point where i need to ask how does one re-balance.
I also just want to check if i am on the right track.

My current portfolio is as below,

STI ETF, position 1690, Lost $-580 , 23%
NikkoAm, position 1900, Profit $0.41, 42%
IWDA, position 51, Profit $17.7 , 35%

Total pie:
58% share and 42% bond
My age is 35 this year. So i need to sell and buy, to rebalance to
75% share and 25% bond

Now my bond makes $0.41, i can't possibly sell it.
So that leaves the option of me buying more shares (STI and IWDA) to increase the portion to 75% ?

 

[Thoreldan]

Hi,

I have reached a point where i need to ask how does one re-balance.
I also just want to check if i am on the right track.

My current portfolio is as below,

STI ETF, position 1690, Lost $-580 , 23%
NikkoAm, position 1900, Profit $0.41, 42%
IWDA, position 51, Profit $17.7 , 35%

Total pie:
58% share and 42% bond
My age is 35 this year. So i need to sell and buy, to rebalance to
75% share and 25% bond

Now my bond makes $0.41, i can't possibly sell it.
So that leaves the option of me buying more shares (STI and IWDA) to increase the portion to 75% ?

Hi there, just curious are you doing dca while arriving at the above allocation ?

 

[iceblendedchoc]

Hi,

I have reached a point where i need to ask how does one re-balance.
I also just want to check if i am on the right track.

My current portfolio is as below,

STI ETF, position 1690, Lost $-580 , 23%
NikkoAm, position 1900, Profit $0.41, 42%
IWDA, position 51, Profit $17.7 , 35%

Total pie:
58% share and 42% bond
My age is 35 this year. So i need to sell and buy, to rebalance to
75% share and 25% bond

Now my bond makes $0.41, i can't possibly sell it.
So that leaves the option of me buying more shares (STI and IWDA) to increase the portion to 75% ?

no need to sell. Just direct your money to STI and IWDA until it reach your 75%

 

[Rknight]

Hi there, just curious are you doing dca while arriving at the above allocation ?

Not really, I DCA for first few months until March-April when prices dropped. So i went in more during this months. The result would be worst if i really DCA every month.

 

[Rknight]

no need to sell. Just direct your money to STI and IWDA until it reach your 75%

Sounds like the next thing I should do, thanks buddy.

 

[Shine.gdj]

There is a disconnect between the economy and the stock market.
The economy is in bad shape while the stock market has been on a rally since March.

Any thoughts on the above?

 

[tesarise]

Hi,
Now my bond makes $0.41, i can't possibly sell it.

why not? then when can you "possibly sell"?

 

[RuiQi_91]

Hello, Interactive Brokers has this stock yield programme and I would like to know if it is something that I should opt in. I am only using IBKR to invest in the IWDA ETF.

 

[blackwaltz3]

Hi all,

I have tried to transfer my IWDA holdings from scb to ibkr afew months back but was told it's no longer possible.

I'm 30 years old and have around 50k SGD worth of IWDA in scb.

Will it be recommended to sell from scb and buy via ibkr?

If so, will it be recommended to be done as one big bang or gradually over several months?

Monthly investment to IWDA will be USD 1k.

Thank you.

If you're still a long way off from US$100K, why not just leave your holdings in SCB and start IB first?

Did they say why it was no longer possible to transfer? I have been investing in IWDA through StanChart for several years and it is now worth more than 100k. was intending to transfer it to IBKR but seems like that's not possible now.

I usually purchase IWDA in lump sums, twice a year. Should I continue to accrue IWDA through StanChart? Sell my current StanChart IWDA holdings and buy through IBKR? Or start buying IWDA through IBKR from scratch and leave what I have with StanChart alone?

Thanks in advance!

 

[Inediblebulk]

Hello, Interactive Brokers has this stock yield programme and I would like to know if it is something that I should opt in. I am only using IBKR to invest in the IWDA ETF.

Stock yield only for US stocks/etf/cef

 

[limster]

Did they say why it was no longer possible to transfer? I have been investing in IWDA through StanChart for several years and it is now worth more than 100k. was intending to transfer it to IBKR but seems like that's not possible now.

IBKRSG has a local Singapore custodian. Maybe got chance if you convert account to SG account, but lose SIPC protection.

 

[Shiny Things]

H
Questions;
- When rebalancing should I just purchase delta difference to maintain the 80/20 rule or actually sell every 6 months?
- IWDA + EIMI will cost me over time in fee's, to maintain the emerging markets exposure it would be best to change this to VWRA?

1) Whatever you need to. If there’s a big rally in stocks, and you end up way over allocated to stocks, you might need to sell some stocks and redeploy the cash into bonds. If you’re only a little bit out of alignment, you might be able to get away with just buying.

2) If you want specific EM exposure, then sure, use VWRA instead. Either is fine.

Now on to the main one, a few months ago I took a new job and relocated from SG to Thailand, I am paid in baht and have concerns about its outlook over the next year (I am compensated well so overall better off even with a 10-20%+ drop). Particuarly with how exposed the economy is to tourism which is unlikely to pick up until next year.

I am wondering what would be a good way to hedge against a major decline, assuming I want to hedge for the next 12 months would I look at taking a July 2021 put option against the THB? or what other products could I research here that would meet the need (I am still a noob in this area).

Buying THB put options (or USDTHB call options, which is how they trade in the market) is absolutely the right way to hedge your situation.

A 1-year 32-strike USDTHB call will run you about 2.25% of the USD notional. A strip of 12 monthly calls will be even cheaper.

Hi all, just realised ibkrsg dont allow the purchase of fractional shares. Any possible reasons for this ?

I talked about this over in another thread, but I’ve poked around how to actually implement a fractional-shares offering, and it’s surprisingly gnarly.

It’s more complicated than just changing numberOfShares from an Integer to a Decimal or whatever; the broker has to be able to take risk themselves (because they’re going to be long or short myriad fractions of a share with all their customers), and you have to put legal structures in place to allow yourself to do that.

Hi Shiny Things,

Long-time reader, first time poster. I read your entire book and found it educational, relevant, and highly entertaining, especially your Singapore-related commentary. Highly recommended for Singapore-based investors!

What are your thoughts on VWRA as the alternative to IWDA? I think it warrants the Shiny Things Seal of Approval:

Thanks for the kind words! Yeah, “IWDA vs VWRA” is a pretty common topic; it was great news when Vanguard launched VWRA 18 months back or so. At the moment, I lean toward IWDA as a default, because it has a tighter bid/ask (so it’s cheaper to trade in and out of), but VWRA is perfectly good as well. If VWRA becomes a bit more liquid, I might recommend it as the default.

JP Morgan has an insightful paper on this called "Debunking myths about ETF liquidity" (I cannot link here as I'm not experienced enough on HWZ).

JPM is wrong. The traded volume of an ETF doesn’t matter, but the bid/ask spread definitely does. (The quantity available at the inside price matters too, but not so much unless you’re a big investor). I suspect JPM has a vested interest in plugging their own ETF lineup, which is unfortunately a lot less liquid (in terms of tight bid/ask spreads and active market makers) than the rest of the market... so they would argue that bid/ask spreads and liquidity don’t matter.

Now my bond makes $0.41, i can't possibly sell it.

Your profit or loss on a position doesn’t matter. Sell the bonds if that’s what you need to do to rebalance.

There is a disconnect between the economy and the stock market.
The economy is in bad shape while the stock market has been on a rally since March.

Any thoughts on the above?

Which economy and which stock market are you talking about—the Singaporean economy vs the STI, or the US economy vs the S&P 500?

Hello, Interactive Brokers has this stock yield programme and I would like to know if it is something that I should opt in. I am only using IBKR to invest in the IWDA ETF.

There’s no downside to switching the stock yield enhancement program on.

Did they say why it was no longer possible to transfer?

The problem is that Stanchart and IBKR clear their European and UK stocks through entirely separate clearing houses. Basically it’s not something any of us on here can fix; if you want to move IWDA from Stanchart to IBKR, you’ll need to sell and re-buy it.