Recommendations for investment first timer

[BBCWatcher]

There have been some people who have been hating on Singapore stocks for the last 10+ years. To them, DBS can go to $0 any time.

That's possible. No single company is immune to bankruptcy. Please note carefully that bankruptcy does not mean the company stops operating. Many, many companies have gone bankrupt, wiped out shareholders (and some bondholders), been reorganized, and kept operating — better and stronger than before in many cases.

i think buying DBS is still generally safe, i doubt they will close down and cease operation.

Credit Suisse literally just did that in early 2023. Credit Suisse was much, much older than DBS is (founded in 1856), much bigger (US$1.75 trillion AUM at the end of 2021), and had more employees (about 50,000 versus DBS's 40,000 — much higher AUM per employee, more productive in that sense). But CS was also based in a small country beginning with the letter S, also known as a global wealth hub. And coincidently the letter C is between D and B in the alphabet, and they share the letter S.

CS shareholders were almost entirely wiped out; they received a tiny allocation of UBS shares, a penny on the pre-crisis dollar sort of allocation. Some bondholders were completely wiped out, including some here in Singapore. And it all happened rather quickly.

CS was absorbed into UBS and in that sense continues operating as a business. Nothing happened to depositors, except that they became UBS customers.

Any single company can fail! It's extremely naive to think otherwise.

 

[ericcsn]

That's possible. No single company is immune to bankruptcy. Please note carefully that bankruptcy does not mean the company stops operating. Many, many companies have gone bankrupt, wiped out shareholders (and some bondholders), been reorganized, and kept operating — better and stronger than before in many cases.

Credit Suisse literally just did that in early 2023. Credit Suisse was much, much older than DBS is (founded in 1856), much bigger (US$1.75 trillion AUM at the end of 2021), and had more employees (about 50,000 versus DBS's 40,000 — much higher AUM per employee, more productive in that sense). But CS was also based in a small country beginning with the letter S, also known as a global wealth hub. And coincidently the letter C is between D and B in the alphabet, and they share the letter S.

CS shareholders were almost entirely wiped out; they received a tiny allocation of UBS shares, a penny on the pre-crisis dollar sort of allocation. Some bondholders were completely wiped out, including some here in Singapore. And it all happened rather quickly.

CS was absorbed into UBS and in that sense continues operating as a business. Nothing happened to depositors, except that they became UBS customers.

Any single company can fail! It's extremely naive to think otherwise.

There is a difference.

Temasek.

Its net portfolio value is ~ S$518 billion.

Of which DBS is $60 billion.

The stock value of DBS directly affects its P/L among other things.

 

[limster]

Ask google or AI to list the number of Swiss banks that have failed.
Then do the same for number of SIngapore banks that have failed

Major Swiss bank failures / near-failures​

Bank	Period	What happened	Similarity to Credit Suisse
Banque d'Escompte Suisse	1934	Government assistance and restructuring failed; bank closed and went into liquidation	★★★★
Swiss Volksbank	1930s	Severe losses; required government assistance and eventually survived through restructuring	★★★★
Bank Leu	1930s	Required support from shareholders and creditors during banking crisis	★★★
Eidgenössische Bank	1930s	Required substantial shareholder support during banking crisis	★★★
Swiss Bank Corporation (SBC)	1930s	Major losses during Depression; required recapitalisation	★★★
Spar- und Leihkasse Thun	1991	Failed and licence was revoked; liquidation followed	★★★
Solothurner Kantonalbank	1994–95	Massive losses; effectively rescued/restructured by the canton	★★★★
UBS	2008	Massive losses and confidence crisis; Swiss government/SNB rescue package	★★★★★
Banque Privée Espírito Santo	2014	Became over-indebted; FINMA opened bankruptcy proceedings	★★
Credit Suisse	2023	Liquidity/confidence crisis; emergency takeover by UBS	★★★★★

 

[lousylah]

This post combines three bad ideas: completely excluding bonds from your long-term investment portfolio, trying to time (bond) markets, and investing in a single stock.

My suggestion is to decide what your risk tolerance is based primarily on your investment time horizon — how many more years until you retire, and then how many years of retirement you'll need to support — and then invest in a couple low-cost index funds in percentages that align with your risk tolerance. If you want a "2 fund strategy" it would be a low cost global stock index fund and an investment grade corporate bond index fund. If you want a "3 fund strategy" you'd likely add a relatively small allocation to the Straits Times Index (STI) stocks. My current favorite low-cost long-term investment funds are listed here.

While you could slam the whole S$200K sum into long-term investments on one go, if you feel more comfortable you could split that into 10 monthly installments of $20K each. But I wouldn't take any longer than that to reposition.

How have your favourite bond funds fared in the recent 5yr window (dividend reinvested)?

 

[d3n]

That's possible. No single company is immune to bankruptcy. Please note carefully that bankruptcy does not mean the company stops operating. Many, many companies have gone bankrupt, wiped out shareholders (and some bondholders), been reorganized, and kept operating — better and stronger than before in many cases.

Credit Suisse literally just did that in early 2023. Credit Suisse was much, much older than DBS is (founded in 1856), much bigger (US$1.75 trillion AUM at the end of 2021), and had more employees (about 50,000 versus DBS's 40,000 — much higher AUM per employee, more productive in that sense). But CS was also based in a small country beginning with the letter S, also known as a global wealth hub. And coincidently the letter C is between D and B in the alphabet, and they share the letter S.

CS shareholders were almost entirely wiped out; they received a tiny allocation of UBS shares, a penny on the pre-crisis dollar sort of allocation. Some bondholders were completely wiped out, including some here in Singapore. And it all happened rather quickly.

CS was absorbed into UBS and in that sense continues operating as a business. Nothing happened to depositors, except that they became UBS customers.

Any single company can fail! It's extremely naive to think otherwise.

if DBS fail, then I think Singapore is doomed. all die together liao

 

[sohguanh]

if DBS fail, then I think Singapore is doomed. all die together liao

Yes DBS is like SIA the national assets of Spore govt. During COVID SIA bleed lose monies govt go to the rescue. Likewise DBS is our financial beacon i highly doubt Spore govt allow it to go bankrupt unless Spore govt party has changed hands

 

[lousylah]

How have your favourite bond funds fared in the recent 5yr window (dividend reinvested)?

answering myself, verbatim from LLM :
[SPOILER : not great]

Using the approximate ending values from following simulation (S$250/month for each ETF, S$15,000 contributed per ETF), the estimated XIRRs are:

ETF	Monthly DCA	Total invested	Approx. ending value	Approx. XIRR p.a.
MBH	S$250	S$15,000	~S$15,700	~0.9%
CRPA	S$250	S$15,000	~S$15,600	~0.8%
IGIL	S$250	S$15,000	~S$14,600	~-1.1%
BNDW	S$250	S$15,000	~S$15,300	~0.4%
Equal 4-ETF portfolio	S$1,000	S$60,000	~S$61,200	~0.8%

Why XIRR is higher than the simple 5-year CAGR​

You weren't investing the whole S$15,000 on day one. You invested S$250 every month, so much of the money was invested during the 2022 bond selloff and subsequent recovery.

For example, MBH paid distributions throughout the period—its distributions were roughly semi-annual and were as high as S$0.0163 per unit in 2025.

Bottom line: based on this approximate simulation, the equal four-fund portfolio produced only about 0.8% p.a. XIRR over the five-year DCA period.

However, I would not treat these XIRRs as final figures. The previous ending values were themselves approximate. A proper XIRR needs the exact date and price for all 60 purchases, exact distributions and reinvestment dates, and SGD/USD/GBP FX rates. The historical data confirms, for example, that CRPA and IGIL had substantial price movements during 2021–26.

i added cash funds for comparison (synthetic FD DCA with rollover). Again here verbatim :

Yes. I’d add both Fullerton SGD Cash Fund and LionGlobal SGD Money Market Fund as cash alternatives.

For a consistent comparison, I’d use the accumulating/no-distribution share classes, so income is automatically reflected in NAV. Fullerton A has no distributions, while LionGlobal Class A is accumulating.

Updated 6-fund comparison​

Assuming S$1,000/month total, equally split six ways = S$166.67/month per fund:

Fund	Type	Monthly DCA	5-year contribution	5Y annualised return*	Expected DCA XIRR
MBH	SGD corporate bonds	S$166.67	S$10,000	~0.9%	~0.9%
CRPA	Global IG corporate bonds	S$166.67	S$10,000	~0.1%	~0.8%
IGIL	Global inflation-linked sovereign bonds	S$166.67	S$10,000	~−2.9%	~−1.1%
BNDW	Global aggregate bonds	S$166.67	S$10,000	~0.8%	~0.4%
Fullerton SGD Cash Fund	SGD cash / money market	S$166.67	S$10,000	~2.4%	~2.4–2.5%
LionGlobal SGD Money Market Fund	SGD money market	S$166.67	S$10,000	~2.3–2.4%	~2.3–2.4%

*The bond figures are the approximate figures from our earlier simulation; the cash-fund figures are based on the latest available five-year performance data. Fullerton's current five-year annualised return is about 2.43%, while LionGlobal's is about 2.34–2.36%, depending on the exact valuation date/source.

The interesting part​

The cash funds look considerably better over this particular five-year period:

	5Y annualised	5Y max drawdown
Fullerton SGD Cash	~2.43%	~−0.01%
LionGlobal SGD MMF	~2.36%	~−0.05%
MBH	~0.9%	materially higher
CRPA	~0.1%	materially higher
IGIL	~−2.9%	materially higher
BNDW	~0.8%	materially higher

Fullerton's fund is explicitly designed to provide liquidity and returns comparable to SGD bank deposits, with very low historical volatility. LionGlobal similarly invests in high-quality short-term money-market instruments and debt securities.

So for your "security ballast" idea, this changes the picture quite a bit: over the last five years, SGD cash funds actually delivered higher returns with dramatically lower volatility than the bond ETFs.

If the objective is VWRA + one defensive asset, I'd be much more interested in comparing MBH vs Fullerton vs LionGlobal rather than keeping all six.

My personal conclusion : Bond funds sux.....

 

[limster]

Yes DBS is like SIA the national assets of Spore govt. During COVID SIA bleed lose monies govt go to the rescue. Likewise DBS is our financial beacon i highly doubt Spore govt allow it to go bankrupt unless Spore govt party has changed hands

you just reminded me of the SIA retail bond thread, where you-know-who as usual is posting to tell people that SIA can collapse and default on its bonds.

 

[lousylah]

That's possible. No single company is immune to bankruptcy. Please note carefully that bankruptcy does not mean the company stops operating. Many, many companies have gone bankrupt, wiped out shareholders (and some bondholders), been reorganized, and kept operating — better and stronger than before in many cases.

Credit Suisse literally just did that in early 2023. Credit Suisse was much, much older than DBS is (founded in 1856), much bigger (US$1.75 trillion AUM at the end of 2021), and had more employees (about 50,000 versus DBS's 40,000 — much higher AUM per employee, more productive in that sense). But CS was also based in a small country beginning with the letter S, also known as a global wealth hub. And coincidently the letter C is between D and B in the alphabet, and they share the letter S.

CS shareholders were almost entirely wiped out; they received a tiny allocation of UBS shares, a penny on the pre-crisis dollar sort of allocation. Some bondholders were completely wiped out, including some here in Singapore. And it all happened rather quickly.

CS was absorbed into UBS and in that sense continues operating as a business. Nothing happened to depositors, except that they became UBS customers.

Any single company can fail! It's extremely naive to think otherwise.

Let me jump in on this Credit Suisse (CS) example as well.

CS saw many many many quarters (in other words, years) of poor news and results before collapsing. it did not fail overnight (or in rapid fashion) as Lehman, Bear Sterns or (more recently) Silicon Valley Bank (SVB) + Signature did - due largely to its massive balance sheet. In short, DBS going belly up will take many many many quarters of poor news and poor results as well - in the process shareholders had to make their own call whether to cut loss and exit their positions or see complete loss.

And for CS you know who had to bear the losses? Bond holders (your favourite!!) got wiped out.

 

[BBCWatcher]

There is a difference.
Temasek.

Nope. Sovereign wealth funds, especially in the Middle East, were heavy investors in Credit Suisse. They lost something around 99% of their invested capital in Credit Suisse. The key difference is that sovereign wealth funds can afford to lose much more than you can.

It’s possible for any single company to go bankrupt, wipe out shareholders, restructure, and continue operating.

How have your favourite bond funds fared in the recent 5yr window (dividend reinvested)?

“Past performance is not necessarily indicative of future results.”

if DBS fail, then I think Singapore is doomed. all die together liao

Nonsense. Credit Suisse failed. Switzerland is doing fine, and so is Swiss banking.

you just reminded me of the SIA retail bond thread, where you-know-who as usual is posting to tell people that SIA can collapse and default on its bonds.

It’s possible for any single company to go bankrupt, wipe out shareholders, default on its bonds, restructure, and continue operating. You can insert the name of any private company you wish, anywhere, and the same possibility will apply.

As it happens, I‘m a former shareholder of a national, partially privatized, partially publicly owned, flag carrier airline (with the name of the country in the airline’s name) that went through bankruptcy and restructuring. The airline is operating very well today and never stopped operating, but my shareholding along with everyone else’s was totally wiped out. I assumed the risks, and the risks fully materialized. So it goes sometimes.

If you’d like to assume the risks in holding a single company’s stock or a single issuer’s bonds, go right ahead if you wish! Just don’t deny reality or be naive about the risks. There are always some.

 

[BBCWatcher]

CS saw many many many quarters (in other words, years) of poor news and results before collapsing. it did not fail overnight (or in rapid fashion) as Lehman, Bear Sterns or (more recently) Silicon Valley Bank (SVB) + Signature did - due largely to its massive balance sheet.

It was still fairly quick by large bank standards.

In short, DBS going belly up will take many many many quarters of poor news and poor results as well - in the process shareholders had to make their own call whether to cut loss and exit their positions or see complete loss.

That’s not a given.

And for CS you know who had to bear the losses? Bond holders (your favourite!!) got wiped out.

Some CS bondholders were wiped out, including some in Singapore. It depended on the type of bond. This was a surprise, that stockholders technically ranked ahead of some bondholders. Stockholders were all but wiped out. (They received a tiny allocation of UBS shares, a penny on the dollar kind of stuff.)

I avoid single stocks and single bond issuers except high quality sovereigns. I see no point in assuming those point risks since diversification is easy and inexpensive.

 

[lousylah]

“Past performance is not necessarily indicative of future results.”
.

…and with one motherhood statement you wave off 5 years of underperformance. Sweet.

It was still fairly quick by large bank standards.

That’s not a given.

Some CS bondholders were wiped out, including some in Singapore. It depended on the type of bond. This was a surprise, that stockholders technically ranked ahead of some bondholders. Stockholders were all but wiped out. (They received a tiny allocation of UBS shares, a penny on the dollar kind of stuff.)

I avoid single stocks and single bond issuers except high quality sovereigns. I see no point in assuming those point risks since diversification is easy and inexpensive.

Dude, i know you want to win every discussion badly but do some research before your motherhood statements (“fairly quick for a large bank”)

CS (and everyone related to it including employees, customers, shareholders) endured 2-3yrs of bad news and poor performance.

depositors and shareholders deserted the bank in waves but over time. It was reflected on most market metrics - share price, bond yield, deposit rates, etc. meaning market participants and depositors were asking for sufficient premium to partake in what was becoming riskier and riskier exposure

the final straw was the bank’s exposure to 2 unrelated market controversies in a short time frame (archegos + greensill). It triggered panic and weeks after, it was over.

the government did not bail them out directly due to it enormous size relative to the the country itself > CS (and UBS) became beyond “too big to fail” and was actually “too big to bail”. The swiss government demanded UBS to the rescue but UBS insisted the bondholders wipe-out as a condition. So thats what came to be.

applying back to our DBS (or any other big cap counter for that matter), except for a massive outright fraud it takes a period of poor results to wipe out a large cap > within that period share prices will reflect the underperformance accordingly and if one is risk-averse then one will have cut-loss at the first sign of share price falling. Only the most hopeful will hold out through an extended period of underperformance.

….which brings me right back to your favourite set of bond funds. 5-years of underperformance is not enough to make you change your mind?

maybe indeed some ppl can be stubborn? Lol

 

[lousylah]

I avoid single stocks and single bond issuers except high quality sovereigns. I see no point in assuming those point risks since diversification is easy and inexpensive.

Lets talk about high quality sovereigns.

have you been reading the news lately? Its a developing news story actually, cant really blame you if you missed it - except its been many quarters in the making (maybe too short a timeframe for you?)

 

[Shion]

T-bill, SGS, SSB

 

[lousylah]

T-bill, SGS, SSB

this is good and different from bond funds as one becomes the primary holder and able to hold-to-maturity (HTM) and ignore the noise of daily price/yield movements.

 

[limster]

IGNORE famous youtuber recommending BABA and BYD.

Is it the BABA bagholder again?

 

[BBCWatcher]

CS (and everyone related to it including employees, customers, shareholders) endured 2-3yrs of bad news and poor performance.

Which is fairly quick for a large bank. It’s also not the only speed at which a bank can fail.

Lets talk about high quality sovereigns.

Long-term investing means long-term. Short-term fluctuations are irrelevant except that they aid dollar cost averaging. Bond prices go up and down (yields go down and up). We know that!

T-bill, SGS, SSB

While these vehicles are comparatively safer than many others, and they can be held to maturity, they are also expected to be low yielding. A prudent long-term investor would not allocate an excessive percentage to these vehicles.

I would also note that Singapore does not offer any real return (inflation-indexed) bonds, but several other high quality sovereigns do. If you’re specifically looking for explicit long-term inflation defense, that’s available.

The 30 year TIPS recently came within a whisker of a 3.0% real return (2.975% I think it was), a 25+ year high. Not a recommendation, but wow, that was pretty incredible.

this is good and different from bond funds as one becomes the primary holder and able to hold-to-maturity (HTM) and ignore the noise of daily price/yield movements.

Which is great if you’re saving for a wedding 3 years from now, for example. Not especially relevant to long-term investors with working career and retirement timescales.

IGNORE famous youtuber recommending BABA and BYD.

ANY single company can fail and wipe out its shareholders. There’s no reason a non-billionaire long-term investor needs to assume such point risks when diversified, ultra low cost index funds exist. For example, in a separate thread long-time investors point out that Vanguard slashed the cost yet again with their new London-listed, Irish domiciled all-cap global stock index fund “VALU.” It has a fantastically low 0.07% total expense ratio. The fund invests in about 7,000 stocks listed/traded in every investable stock market around the world. What an incredibly useful long-term investment tool, in combination with age/risk appropriate allocations to one or a couple other low cost funds (such as an investment grade corporate bond fund).

 

[aurvandil]

There have been some people who have been hating on Singapore stocks for the last 10+ years. To them, DBS can go to $0 any time.

When I buy a good dividend stock like OCBC, UOB, and DBS at a good price, it doesn't matter to me whether the stock price go up or down as long as the bank fundamentals are sound. If the bank has sound fundamentals, I expect it to remain profitable and pay dividend. I will happily collect the dividend whatever the share price.

On the other hand, haters will say dividend can go to $0, but please look at the 20+ year dividend history of the 3 banks and DYODD....

Myself, I initially targeted a 50/50 split between foreign and local stocks, mostly those that pay good dividend. But I think currently the majority of my portfolio is foreign stock.

The local banks have cheong ever since they removed the CPF Shielding SA hack.
IMHO they will continue to cheong as wealthy boomers look for a place to park their money.

The current common thinking is that if put into CPF Life, the money is gone after death.
If buy banks, can collect dividend and pass on to next generation as bequest.

 

[lousylah]

While these vehicles are comparatively safer than many others, and they can be held to maturity, they are also expected to be low yielding. A prudent long-term investor would not allocate an excessive percentage to these vehicles.

I would also note that Singapore does not offer any real return (inflation-indexed) bonds, but several other high quality sovereigns do. If you’re specifically looking for explicit long-term inflation defense, that’s available.

The 30 year TIPS recently came within a whisker of a 3.0% real return (2.975% I think it was), a 25+ year high. Not a recommendation, but wow, that was pretty incredible.

Which is great if you’re saving for a wedding 3 years from now, for example. Not especially relevant to long-term investors with working career and retirement timescales.

Again you choose to be selective just to be “the smartest dude in the thread”, SSB is 10-year and more than useful for long term investor.

and as demonstrated with my earlier post, your set of bond funds arent yielding much better than holding SSB or T-bills directly.

your TIPS example again is selective flip-flopping. If you hold the iShares TIPS fund, you lost out on the capital dropping unless you are holding TIPS directly asa primary holder to HTM > which is exactly our collective points on SSB and T-bills (as primary holder)

for you there is only one way > bond funds + world fund. Anyone who does otherwise is not as smart as you.

there are different time horizons and different objectives. Yours is one way but definitely not the ONLY way and from what i demonstrated, not THE BEST way.

feel free to share in the discussion but dont go all megalomaniac on everyone who does not subscribe 100% to your scripture….

 

[BBCWatcher]

Again you choose to be selective just to be “the smartest dude in the thread”, SSB is 10-year and more than useful for long term investor.

I think SSBs are useful for a portion of a prudent long-term investor's emergency reserve funds, for example. But who are you arguing with? Here's what I actually wrote:

A prudent long-term investor would not allocate an excessive percentage to these vehicles. (Emphasis added.)

"An excessive percentage" is not the same meaning as "any percentage," for example. I try to choose words carefully, and on this occasion (and most others) I did.

and as demonstrated with my earlier post, your set of bond funds arent yielding much better than holding SSB or T-bills directly.

Let's suppose that's true for sake of argument. Bond funds are liquid and easily traded, and that makes them useful for portfolio rebalancing — a useful technique for managing risks and boosting long-term total net returns. Most directly held bonds are not easily traded.

That said, who are you arguing with? I hold some high quality sovereign bonds directly, and I hold some investment grade corporate bonds in low cost fund form. Where did I suggest that you cannot or should not do both? I do it myself!