Official Shiny Things thread—Part III

[zoneguard]

Not sure anyone read the Vanguard's paper published last year on international equity and home bias.

This paper?

That's not the conclusion drawn by the authors.

In light of our quantitative analysis and qualitative considerations, we have demonstrated that domestic investors should consider allocating part of their portfolios to international equities. In determining how much to allocate between domestic and international equities, a helpful starting point for investors is global market-capitalization weight.

Singapore's data was not in Figure 2. The paper compared 4 other countries in Figure 3. Our market cap weight is really a tiny dot compared to the world's.

 

[ftpofmpo]

sti remains a laggard while s and p recovered a lot, how can ppl still have confidence in sti?

 

[d5dude]

This paper?

That's not the conclusion drawn by the authors.



Singapore's data was not in Figure 2. The paper compared 4 other countries in Figure 3. Our market cap weight is really a tiny dot compared to the world's.

Exactly. The paper recommends Japanese investors allocate no more than 10% to their domestic market even though the Nikkei225 is 8% of VTI. STI is only <1% of VTI and people want to allocate 50% of their stock portfolio in it.

Think people, think.

 

[yourplaceormine]

Attempted to transfer IWDA from SCB to IBKR in Apr 2020.

Was subsequently told by both SCB and IBKR that the transfer is not possible, because SCB can only perform the transfer using local UK CREST, whereas IBKR has a mandate to receive all iShares holdings through Euroclear only. To be exact, IBKR can receive GBP holdings using CREST, but iShares holdings cannot be performed through CREST.

Since SCB cannot use anything other than CREST, and IBKR cannot receive iShares through any other means other than Euroclear, the transaction was declined. The transaction was done using the Share Transfer form located on SC Trading Online, and also put in a request to receive positions on IBKR through International Asset Transfer (similar to the instructions in the quote above).

Since there have been successful transfers reported (Sep 2017, Aug 2019 as far as I'm aware), it sounds like something may have changed in settlement instructions for SCB or IBKR.

@those who succeeded - any chance you could assist to ask how the transfer was made, and whether it was using CREST or Euroclear? Also if this method can still be continued moving forward?

@Shiny and other friendly advisors here - caveat is that starting out with SCB and then transferring to IBKR may no longer be feasible.

keen to know about this as well, can anyone shed some light on this?

 

[binary_0011]

hi all, need your advice on this before i invest some serious money on this:

USX : DIA - SPDR Dow Jones Industrial Aver (1 share @ USD 254.35)



full image on this link : https://ibb.co/bPgMq6Y

is this worth investing? 12 month dividend yield is 2.31% . but they payout monthly.

 

[limster]

In this thread people are only recommending ETF that reinvest dividends.

You come here to ask whether an ETF that gives monthly dividend is good? you should already know the answer you are going to get.

 

[bobobob]

hi all, need your advice on this before i invest some serious money on this:

USX : DIA - SPDR Dow Jones Industrial Aver (1 share @ USD 254.35)



full image on this link : https://ibb.co/bPgMq6Y

is this worth investing? 12 month dividend yield is 2.31% . but they payout monthly.

You'll want to read up on dividend withholding tax charged on American shares. Around here we recommend ETF domiciled in Ireland, read up why.

 

[zoneguard]

keen to know about this as well, can anyone shed some light on this?

Euroclear owns CREST, see this. This is like their CDP.

 

[zoneguard]

Euroclear owns CREST, see this. This is like their CDP.

EDIT: See this: https://www.investopedia.com/terms/c/crest.asp

This could be the issue, ie Brexit's effects.

 

[megdang]

There is new broker for Singapore stocks.
Fee: 0.08% (no min for now, but might be changed to S$2.88 in the future)
Fees details:
https://www.tigerbrokers.com.sg/help/detail/SGFEESTRU

Custody at theirs

Seems like very mobile-friendly since can trade by mobile app only, no web.

 

[Shiny Things]

Also keen to find out as advice from my friend.

Now is a good time to buy SIA shares, is it true?

Should I use my $30k cash to invest in SIA shares instead?

Jeez, no, absolutely not. You have no idea how SIA's going to do; neither does your friend. Nobody knows how long it's going to take for airlines to recover from their entire business getting kneecapped.

Hi guys i have a question about cash drag/positions.

I have an outstanding mortgage loan of around SGD730k for an investment residential property that has a market value of SGD1.1M, rental collected is net positive after mortgage payments.

I am holding SGD170k cash in deposits getting around 2% interest. Another 90k in SSB. SGD114k in equities (IWDA).

The reason for my cash holdings is to guard against the event of a margin call when property value devalues significantly/downturn periods where there are no rental income.

Yeah, I think you're holding too much cash. Assuming a gross rental yield of 5%, you're holding enough cash to get yourself through five years of no tenancy. Six months is plenty, a year if you're extra conservative.

And if you're worried about getting margin called, the solution is not holding extra cash; the solution is to pay down the loan (which also cuts your interest bills, as a side benefit.)

Why bother 3 shares of IWDA?
The comm and fx to convert to MBH makes little sense.

Yeah, that's actually a good point. You don't need to be dollar-precise when you're rebalancing. $150 is a bit too small of a rebalance to worry about, especially if you're going to be paying ten bucks in fees.

 

[Shiny Things]

Hi Gurus, I am 27 this year and I need some advice in managing my investments towards a 3-fund portfolio. I have the following portfolio by market value now:

1. REITs (Retail+Office) - 61%
2. ES3 STI ETF - 11%
3. SG Equities - 12%
4. A35 bond ETF - 4%
5. Others (Robo, special investment) - 12%

I have also been investing $500 each into ES3 STI ETF and Stashaway monthly. I am also able to invest S$3000 into IWDA every quarter moving forward.

I would like to move into a 3-fund portfolio but I am wondering how best to go about it considering I have been "double-investing" in STI ETF itself and its large components separately.

You've pretty much answered your own question there. The REITs, and the single-name SG equities, are just duplicating what you'd get from the STI ETF. Your best bet would be to sell the REITs and the single-name stocks, and use the proceeds to buy ES3 and A35 / MBH.

I just wonder after I deplete my USD balance in the SCB account, what is the most cost efficient way to continue to convert SGD to USD? I read about IBKR being the cheapest but I prefer to consolidate all my owning within 1 platform (being SCB). So if I use IBKR, it will just be for converting SGD to USD.

Assuming monthly fee of USD10 on IBKR & USD10 landing fee into SCB if I convert S$3 to 5K monthly, does it make sense to just do the conversion with SCB anyway?

No, it'd still be better to use Interactive - IBKR's FX spreads are a lot tighter than Stanchart's, and you'll save about fifteen bucks a month on that.

Since dividend is reinvested into NAV, what happens during a bear market when prices of shares drop? Since NAV is calculated based on the assets and such held by the fund, would that mean that those dividends as well would be affected as well?

To be honest, I don't understand the question. The fund spends the dividends on buying more shares of the underlying stocks; those stocks pay dividends, which might go up or down depending on the condition of the companies.

i want to sell a stock, i waiting for so long for someone to buy my stocks...*yawn*

If you wanna sell something and there's no buyers, you'll need to lower. your price. That's how it works.

hi all, need your advice on this before i invest some serious money on this:

USX : DIA - SPDR Dow Jones Industrial Aver (1 share @ USD 254.35)

is this worth investing? 12 month dividend yield is 2.31% . but they payout monthly.

It sounds like you've picked a random thing to buy, just because it pays dividends monthly.

Let's step back a bit. What is your goal with the money you're investing? Do you want income, or capital growth? Do you want low risk, or are you comfortable with the price being volatile?

 

[vkohww]

No, it'd still be better to use Interactive - IBKR's FX spreads are a lot tighter than Stanchart's, and you'll save about fifteen bucks a month on that.

Hi ST, thanks for your reply.

I'm assuming you meant to use IBKR to trade after converting SGD to USD instead of using IBKR just for FX conversion & transferring the USD back to SCB for trading?

In the case where I prefer to keep all my holdings in SCB, the USD landing fee back in SCB more or less wipe out the 15 bucks saving a month based on my rough calculations. Am I missing anything?

Thanks for the clarifications.

 

[BBCWatcher]

And if you're worried about getting margin called, the solution is not holding extra cash; the solution is to pay down the loan (which also cuts your interest bills, as a side benefit.)

Unless the cash (or cash-like) is reliably earning a higher yield, which is typically the situation in Singapore (e.g. CPF OA).

 

[yourplaceormine]

Quick question about using cpf OA funds for investments. What's the general consensus here on what to invest in with these funds, or should it just be redirected to SA instead?

 

[sydznnl]

There is new broker for Singapore stocks.
Fee: 0.08% (no min for now, but might be changed to S$2.88 in the future)
Fees details:
https://www.tigerbrokers.com.sg/help/detail/SGFEESTRU

Custody at theirs

Seems like very mobile-friendly since can trade by mobile app only, no web.

Looks good for SGX. But for US, theres a financing interest rate in the fee structure. Abit confused if his is custodian fees or exchange rate fees. And... there's no LSE.

https://www.tigerbrokers.com.sg/help/detail/rzll

 

[BBCWatcher]

Quick question about using cpf OA funds for investments. What's the general consensus here on what to invest in with these funds, or should it just be redirected to SA instead?

In my view you shouldn't bother with the CPF Investment Scheme (OA)(*) until your Special Account has reached the Full Retirement Sum (via OA to SA transfers, SA top ups, and/or compulsory contributions into SA), you've exhausted OA to RA transfer opportunities (to your elders typically), you have a surplus of funds in your OA above your desired housing "buffer," and you have a long enough time horizon for an investment to have a reasonable chance of paying off.

If all those conditions hold, then I'd focus CPFIS-OA funds on a single counter (since there's a fee for each counter), and it'd probably be a Straits Times Index stock fund (ES3 or G3B).

(*) CPF "Special Account shielding" could potentially involve shielding OA dollars, too, if you plan a cash top up into your RA.

 

[crystalnox]

Hi ST, thanks for your reply.

I'm assuming you meant to use IBKR to trade after converting SGD to USD instead of using IBKR just for FX conversion & transferring the USD back to SCB for trading?

In the case where I prefer to keep all my holdings in SCB, the USD landing fee back in SCB more or less wipe out the 15 bucks saving a month based on my rough calculations. Am I missing anything?

Thanks for the clarifications.

If we assume $5k and a spread of 0.5% at SCB, you save roughly $25. But you'll have to pay USD10 on IBKR & USD10 on SCB so it's about break even/probably not worth the effort.

 

[Listopad]

Anyone participate in the IB Stock Yield Enhancement Program ? Roughly what’s the income like ? Are the ETFs on LSE eligible ?

What are the key risks to highlight ?

 

[deltawing445]

You've pretty much answered your own question there. The REITs, and the single-name SG equities, are just duplicating what you'd get from the STI ETF. Your best bet would be to sell the REITs and the single-name stocks, and use the proceeds to buy ES3 and A35 / MBH.

Thanks ST for your answer. I have a silly follow-up question. In order to move to a 3 fund portfolio as suggested, I would need to sell my REITs and single name equities. However, is it wise to hold onto my single name equities considering I'm facing a paper loss now? Or should I just bite the bullet and take the loss?