Official Shiny Things thread—Part III

[limster]

Hi,
but i heard there are risks of me losing all my portfolio if the company goes bankrupt.

can your provide the link to the blog/post/article that says this? this is not the first time someone said he heard something like this so i'm curious where's the source of the info

 

[BBCWatcher]

https://www.bloomberg.com/news/arti...?utm_source=google&utm_medium=bd&cmpId=google
Stumbled upon this article mentioning the possibility of hyperinflation.

The article you linked to doesn’t mention the possibility of hyperinflation. It doesn’t use words like hyperinflation, inflation, rising prices.... Nothing.

However, I’ll offer an answer: if you’re concerned about hyperinflation or even high inflation, then you should be interested in IGIL, listed on the London Stock Exchange. IGIL invests only in inflation-linked (real return) bonds issued by high quality governments across the developed world. IGIL is extremely highly positively correlated to global inflation, and unless you can find a lower cost fund that’s otherwise similar you won’t find anything more highly correlated.

 

[BBCWatcher]

I just opened a FSMOne account... but i heard there are risks of me losing all my portfolio if the company goes bankrupt. Is it safe to use?

Probably pretty safe, but if you are concerned you can split your allegiances across a couple different broker-custodians. Also, every so often you can transfer SGX-listed securities from your FSMOne account to your individual CDP account, and currently that’s free of charge.

I am looking to invest $300-400 into either ES3 or IWDA. Is interactive brokers the only brokerage that have IWDA? Because i dont see it when i try to search for IWDA in FSMOne. Also do i alternate between ES3 and IWDA every month?

Standard Chartered also offers IWDA. “$300-400 into either ES3 or IWDA” doesn’t really make any sense. They’re two very different stock index funds. What’s your preferred target allocation and monthly savings flow?

Let’s suppose you have a monthly savings flow of S$350. Then one approach is to sign up with POSB Invest Saver for $100/month into G3B, which (last I checked) will cost 82 cents per month in commissions. Then take the other S$250/month and batch it up into S$1,500 purchases of IWDA every 6 months, probably via Standard Chartered. Each purchase via Standard Chartered will cost US$10.70 in commissions plus a currency conversion charge. This’ll result in a 28.6%-71.4% split between local and global stocks on an inflow basis. That’s slightly too high on the local side for my tastes, so I’d take the dividends on the local side and include them as part of each buy on the global side. Your tastes may vary, of course, but this is one example that’s reasonably cost efficient.

 

[cassowary18]

Hi,
I just opened a FSMOne account... but i heard there are risks of me losing all my portfolio if the company goes bankrupt. Is it safe to use?

I am looking to invest $300-400 into either ES3 or IWDA. Is interactive brokers the only brokerage that have IWDA? Because i dont see it when i try to search for IWDA in FSMOne. Also do i alternate between ES3 and IWDA every month?

The chance of you losing your holdings in FSMOne if it goes bankrupt is practically zero. They're held in a separate account which can't be touched by creditors should they go bankrupt. If you're really worried, transfer your holdings to CDP, it's free currently.

IWDA is only available on Standard Chartered and Interactive Brokers. FSMOne does not allow access to LSE.

 

[razoreigns]

Probably pretty safe, but if you are concerned you can split your allegiances across a couple different broker-custodians.

Can you advise what are the next best low cost alternatives to IB for holding IWDA? I am considering reducing some exposure to IB. I have been using it to buy IWDA.

 

[binary_0011]

why i cannot get IWDA dividend payout history on the internet?

 

[kehyi4]

why i cannot get IWDA dividend payout history on the internet?

maybe because IWDA doesn't pay any dividends, since it's an accumulating fund?

 

[cfleee]

I just slogged my way through almost 3 months of posts. I mildly regret doing that now, but still have no regrets staying away from this thread during the craziness and staying the course.

since many have asked about doing RSP, i thought it might be good to share some update from FSM.

their spread of ETF had increase to 49 now.

fees are cheap,
for SGX: 1.07
For USD: USD 1.07

those who wanna do IWDA/CSPX, closest is Vanguard Total World Stock Index Fund ETF Shares (NYSE.VT)

I believe all 3 of them mentioned are domiciled in the US? Which means 30% tax on dividends and estate tax liable. But VT’s expense ratio only 0.08% which is half that of IWDA.

yeah, you are right.

but someone had actually did some maths of the comparision.

After much consideration, i hv decided to switch my IWDA (SCB) to VT (FSMOne RSP). I'm fully aware of the witholding tax and estate tax issue with US ETF, but the cost saving is quite significant.

As I am investing S$800/mth for IWDA/VT, this is my comparison.

1) SCB forex spread = 0.4%, FSMOne forex spread = 0.25%
2) SCB brokerage fees = $10.7 * 4 (batch 3 mths), FSM brokerage fees = $1.07 * 12
3) IWDA witholding tax = 15%, VT witholding tax = 30%. Assuming dividend at 2% pa, the saving from IWDA is 0.3%. (corrected)
4) IWDA TER = 0.2%, VT TER = 0.09%
5) FSMOne has dividend handling fees of $2.5 per dividend. So its $10 per year of dividend loss.

Based on the above number, I use the spreadsheet created by another forummer, VT annual fees is S$43 (include dividend handling fees) vs IWDA S$96 (didn't include opportunity cost).
However, this comparison only applicable to my case.

As Okenba pointed out at the time, this gap closes quite quickly based on the total holdings/AUM.

To use the same example of $800/mth, buying IWDA through SCB quarterly is currently about $99.40 for the year (ignoring opportunity cost) and $131.40 (with quarterly batching opportunity cost).

For that same $800/mth, buying VT through FSMOne RSP monthly starting from zero is $47.16 in year one, $74.38 in year two, $101.59 in year three, $128.81 in year four, and it only goes up from there as the total holdings increase. This includes the forex and brokerage, gains from lower TER, loss of 15% of the dividends at 2.69% dividend yield, and the FSMOne dividend handling fee every quarter.

(This is just a quick back-of-the-excel-sheet calculation. For simplicity, I'm assuming the dividends don't get reinvested, and the ETF has exactly 0% growth each year. That's unlikely to be the case, the total holdings hopefully will grow on average, so this naive estimate should be understating the VT case. I also have not attempted to price in the cost of additional life insurance to address estate duty but it would be less with a lower dividend yield.)

Buying VT just doesn't look like a very good choice in the long run.

 

[makav31i]

I just slogged my way through almost 3 months of posts. I mildly regret doing that now, but still have no regrets staying away from this thread during the craziness and staying the course.







As Okenba pointed out at the time, this gap closes quite quickly based on the total holdings/AUM.

To use the same example of $800/mth, buying IWDA through SCB quarterly is currently about $99.40 for the year (ignoring opportunity cost) and $131.40 (with quarterly batching opportunity cost).

For that same $800/mth, buying VT through FSMOne RSP monthly starting from zero is $47.16 in year one, $74.38 in year two, $101.59 in year three, $128.81 in year four, and it only goes up from there as the total holdings increase. This includes the forex and brokerage, gains from lower TER, loss of 15% of the dividends at 2.69% dividend yield, and the FSMOne dividend handling fee every quarter.

(This is just a quick back-of-the-excel-sheet calculation. For simplicity, I'm assuming the dividends don't get reinvested, and the ETF has exactly 0% growth each year. That's unlikely to be the case, the total holdings hopefully will grow on average, so this naive estimate should be understating the VT case. I also have not attempted to price in the cost of additional life insurance to address estate duty but it would be less with a lower dividend yield.)

Buying VT just doesn't look like a very good choice in the long run.

How do you get $47.16 for year one with FSM RSP? The fee is 0.08% or minimum US$1.07...For US$800 investment per month your fee is only US$1.07 or US$12.84/year...

Also why are you comparing IWDA against VT when VWRD should be the one used to compare against VT...

 

[flowerpalms]

Going to do rebalancing next week

Exciting

 

[celtosaxon]

Going to do rebalancing next week

Exciting

What is exciting about it?

 

[hahaman111]

Dunno whether to dca this month. Tiagong it is the fed buying and pushing up the price despite 1 in 4 americans being unemployed.

 

[highsulphur]

How would etf like ES3 respond to rights issue like SIA? would they have enough funds to participate fully?

 

[flowerpalms]

Buy and sell the fun part. Rebalancing and stay on course

What is exciting about it?

 

[flowerpalms]

I would say just continue to dca monthly, dont think so much. My next investment for May will be early next week. Time to rebalance. Price will still be going up

Dunno whether to dca this month. Tiagong it is the fed buying and pushing up the price despite 1 in 4 americans being unemployed.

 

[5408854088]

I believe all 3 of them mentioned are domiciled in the US? Which means 30% tax on dividends and estate tax liable. But VT’s expense ratio only 0.08% which is half that of IWDA.

if stay within the limit of US$60,000 exemption threshold it should be fine

 

[5408854088]

Hi,
I just opened a FSMOne account... but i heard there are risks of me losing all my portfolio if the company goes bankrupt. Is it safe to use?

I am looking to invest $300-400 into either ES3 or IWDA. Is interactive brokers the only brokerage that have IWDA? Because i dont see it when i try to search for IWDA in FSMOne. Also do i alternate between ES3 and IWDA every month?

your concern will apply to all custodian accounts. foreign stocks and shares purchased via regular savings plans are likely held in a broker's custody also. shouldn't be too concerned about it. CDP is for securities traded in SGX.

https://financialhorse.com/best-stock-broker-2020/
https://dollarsandsense.sg/singapore-stock-brokerage-house-comparison/
https://blog.moneysmart.sg/invest/investment-brokerage-singapore-guide/
https://blog.seedly.sg/step-step-guide-opening-stock-trading-brokerage-cdp-account-singapore/

 

[5408854088]

maybe because IWDA doesn't pay any dividends, since it's an accumulating fund?

anyway to find out the earnings before/after tax, to know exactly how much is reinvested? wondering how much shares or fraction of a share are investors given for accumulating, and if it is significant enough to go on accumulation. imagine S&P 500 ETF accumulating.. how long will it take to accumulate to 1 share?

 

[5408854088]

I just slogged my way through almost 3 months of posts. I mildly regret doing that now, but still have no regrets staying away from this thread during the craziness and staying the course.







As Okenba pointed out at the time, this gap closes quite quickly based on the total holdings/AUM.

To use the same example of $800/mth, buying IWDA through SCB quarterly is currently about $99.40 for the year (ignoring opportunity cost) and $131.40 (with quarterly batching opportunity cost).

For that same $800/mth, buying VT through FSMOne RSP monthly starting from zero is $47.16 in year one, $74.38 in year two, $101.59 in year three, $128.81 in year four, and it only goes up from there as the total holdings increase. This includes the forex and brokerage, gains from lower TER, loss of 15% of the dividends at 2.69% dividend yield, and the FSMOne dividend handling fee every quarter.

(This is just a quick back-of-the-excel-sheet calculation. For simplicity, I'm assuming the dividends don't get reinvested, and the ETF has exactly 0% growth each year. That's unlikely to be the case, the total holdings hopefully will grow on average, so this naive estimate should be understating the VT case. I also have not attempted to price in the cost of additional life insurance to address estate duty but it would be less with a lower dividend yield.)

Buying VT just doesn't look like a very good choice in the long run.

not sure if it is a good idea to add opportunity cost into the comparison. opportunity cost can go both ways and there are a lot of ambiguity surrounding it. again, past performance may or may not be an indicator of future outcomes. nobody really knows.

 

[thisislife]

is COTY a good stock to invest in?