Roboadvisor: Stashaway vs Syfe

[gold_eagle36]

Ya I think net deposit shd not be adjusted based on dividends. Eg. Deposit =100 on Day 1, Dividends = 5 on Day 2. Net Deposit = 100, returns = 5. Day 3 withdraw 5. Net deposit should still be 100 ba. Not sure what returns will show. Would be weird if net deposit shows 95 when there is 100 in the account.

Don't confuse net deposit with current value. Net deposit is just to account for the cashflow you have put into the portfolio.

Let say u put in 100. If there is 5 fiat money coming out into your wallet due to div or manual withdrawal . You would only have put in 95. Hence net deposit 95.

 

[gold_eagle36]

U r right now!!! But stashaway replied my understding is wrong!! If u been following my thread below

Well this is wrong.

 

[dappermen]

Don't confuse net deposit with current value. Net deposit is just to account for the cashflow you have put into the portfolio.

Let say u put in 100. If there is 5 fiat money coming out into your wallet due to div or manual withdrawal . You would only have put in 95. Hence net deposit 95.

i didnt mix up net deposit with current value
Deposit = principal, i clearly stated it eg i wdraw an amt during emergency use, or i top it up w DCA/RSP etc or i pay more w another lump sum to invest in it againn
Deposit is clearly my principal
Curr value is the curr "net worth" /current "worth of what i hve dumped in w my principal (after netting it off wdrawal during emergency times etc or top it up)
value is value mah, deposit is principal...

but how about the current performance/ overall performance S$11,300 for eg??
Some of u didnt explain from a FULL pict at all, pls dont ans in strips or in bits and pcs

None of u answer when there is 5sgd dividends credited to your accounnt? what will it impact?

Impact on net deposit?? cos 5sgd dividends/ cash right into the Robo or impact on current/overall performance? - can someone pls explain
I can accept that instantly they took the 5sgd dividends into buying another Reit/ETF instantly but usually not the case


Why isnt there an increase on my Net dposit of 5sgd dividends (when it was earned) but there is a decrease of -5sgd on the dposit upon wdrawl (due to opting out of investing dividends)


pls explain from day 1 when div earned and wdraw out:
What will it impact on deposit/principal ? and how will it impact on the overall figure of current/overall performance (total value)
Eg (this is an example only for your understanding) , i bought Stashwy Sg income before covid, so NOW in 2021 , there are alot of dividends payout from day 1 to day 365! the payout of dividends (a tot of 9,999sgd) is the same amount of my principal said 10k?

so now my net deposit is 1 sgd?? (cos 10K minus 9999)
and my Portfolio current value is ??? =10K+9999? or just .....??? do u get my point? so the return is how many %?
Why when there r div paid, there is no impact on net deposit?

 

[gold_eagle36]

"Why isnt there an increase on my Net dposit of 5sgd dividends (when it was earned) but there is a decrease of -5sgd on the dposit upon wdrawl (due to opting out of investing dividends)"

My pt is everything is clear if you look at what we trying to account for.

Net profit = current value - net deposit.

Ok imagine you opt out of investing div. Deposited 100 and there is div payout of 5.
Net deposit =95.
Now you wan to reinvest the div, you take the the 5 and put it back. Net deposit is 100.

Hence, your net deposit can't increase because of reinvesting div.

And back to the point, current value has nth to do with what you put in (net deposit). It is just market value. If investment all went downhill. Current value can be also wiped out, independent from your principal.

It is just a simple return to account based on cash flow to calculate profit. I hope I have explained it clear enough.

 

[dappermen]

Ok imagine you opt out of investing div. Deposited 100 and there is div payout of 5.
Net deposit =95.
Now you wan to reinvest the div, you take the the 5 and put it back. Net deposit is 100.

Hence, your net deposit can't increase because of reinvesting div.

Totally didnt ans at all
I was w stashaway Sg income for more than a year, all along i opted for Div - to be reinvested

U didnt ans : if divs are invested how are u to do it? pls ans in wholesome /big pic

not selectively ans

i didnt mix up net deposit with current value
Deposit is clearly my principal
Curr value is the curr "net worth" /current "worth of what i hve dumped in w my principal (after netting it off wdrawal during emergency times etc or top it up)
value is value mah, deposit is principal...

but how about the current performance/ overall performance S$11,300 for eg??
Some of u didnt explain from a FULL pict at all, pls dont ans in strips or in bits and pcs

None of u answer when there is 5sgd dividends credited to your accounnt? what will it impact?

Why isnt there an increase on my Net dposit of 5sgd dividends (when it was earned) but there is a decrease of -5sgd on the dposit upon wdrawl (due to opting out of investing dividends)
Why when there r div paid, there is no impact on net deposit?

u r so right maybe only at this liner, so stashaway slapped itself? cos they minus my current pf value!!!!!!!!!! the curr value is lesser now due to the subtraction of exact div amount

as u hve said how is curr/mkt value related to dividends wdrawn??

current value has nth to do with what you put in (net deposit). It is just market value. If investment all went downhill. Current value can be also wiped out, independent from your principal.

Deposits are deposits mah

 

[gold_eagle36]

If div is reinvested. The amount is shown in transaction. You will have a buy order based on what is the available balance after they allocate to your 1% cash.

The impact is,
Div received , goes to cash allocation , 1% allocation maintained , rest of cash used to buy additional units based on market rate of etf.

You are now holding more units of each etf.

""
u r so right maybe only at this liner, so stashaway slapped itself? cos they minus my current pf value!!!!!!!!!! the curr value is lesser now due to the subtraction of exact div amount
""
Bro, already said they don't suga suga adjust your profit. Your profit depends on market value, which depends on how many units of each etf you holding. Can't look at it as 1 transaction div in or out and what is profit. The market value keep changing and so does your profit.

 

[dappermen]

yes but no leh
No robos will every few mins/in a day time rush into buying more etfs , they will choose to buy only at a point

when NOW i have MORE cash due to the eg 100sgd dividends recvd
Where is the cash parked @ (not the 1% cash allocated )?

wont that increase the net deposit? as u mentioned 'cash allocation' , isnt that dividends a form of cash just like u pump in another round of Lump sum cash?
hence in all 2% of cash allocated

Wont the Lump sum cash pumped, increase your net deposit? cos your principal increased, rem i reinforced that net dposit= P(rincipal)
Since Lump sum pumped will increase
Why is cash dividends wont INcrease the net deposit???
Only lumpsum is cash or DCA/RSP? dividends recd into your robo is not cash?

I wasnt even talking about current /mkt value mah , this is logical right?

gold eagle, i appreciate your swift replies but if there are qns, i will have to raise them continously, pls understand: even though those are my parents ' coffin $....every transaction be it div or selling/purchasing of any etfs - every amt is reflected in the transaction listing mah, this sttm is needless to recap: which movement/transaction is never reflected?
"If div is reinvested. The amount is shown in transaction. You will have a buy order based on what is the available balance after they allocate to your 1% cash."

 

[direbmem]

Don't confuse net deposit with current value. Net deposit is just to account for the cashflow you have put into the portfolio.

Let say u put in 100. If there is 5 fiat money coming out into your wallet due to div or manual withdrawal . You would only have put in 95. Hence net deposit 95.

I think u are confused. If net deposit needs to be reduced with withdrawal of dividend, it needs to increase with the deposit of dividend as well. They cannot reduce the the deposit in order to account for the absolute returns (which has been withdrawn). The percentage returns would be wrong as well. 5/100 is 5% returns. 5/95 is more than 5%.

 

[gold_eagle36]

I explained already just now.

Let's look at 2 basket

Pocket: 100
Portfolio net deposit: 0

Deposit 100,
Pocket: 0
PND: 100

Div 5 payout,
Pocket: 5
PND: 95 (if you like to use the word principal, you can take it that principal value has changed to 95)

Instead of payout you want reinvest it. It's equivalent to you taking what has been just given to you to your pocket and then putting it back in. Hence,

Div 5 reinvested,
Pocket: 0
PND: 100

Hence cash from div cannot increase net deposit unlike "new cash" coming in from your pocket.

For net profit maybe you can understand it as (P&L including dividends if any).
Which can be derived from taking current value minus net deposit

 

[dappermen]

pls! i need more clear-minded pp here!!! more pls!! esp i raised specifically qns to my case q clear

I think u are confused. If net deposit needs to be reduced with withdrawal of dividend, it needs to increase with the deposit of dividend as well. They cannot reduce the the deposit in order to account for the absolute returns (which has been withdrawn). The percentage returns would be wrong as well. 5/100 is 5% returns. 5/95 is more than 5%.

yes this is a gd example!!!!!!!!!! and i warned not to ans in piecemeal ie not gonna be helpful in 1's thinking/analytical.........

actually i have given very clear tips in answering to the case:
just rem
i) Net deposits = Principal!!!!!!!!!!!!!!!!!!!!!!! principal means all DCA/RSP or Lumpsum which u pumped in or wdrawn due to the fact that u needed $ out of your robo/principal

else are rewards/ returns mah, and u need to balance both side of the balance sheet

i have clearly said before i opted out for reinvestg of dividends, previously i was w Stashaway sg income for past one yr, i didnt see them increasing my net deposits when dividends kept coming in
Why then there wasnt an increase in the net deposits at all (even if u r to buy more Reits/ETF at a later timing with all those cash accumulated, they dont blindly buy any day, cos it is NOT a lumpsump investmt)
Of cos diff co. /diff robos got diff accounting methods, still u need to balance the figure mah!!!!!!

Stashaway calling me....NOW

 

[gold_eagle36]

I think u are confused. If net deposit needs to be reduced with withdrawal of dividend, it needs to increase with the deposit of dividend as well. They cannot reduce the the deposit in order to account for the absolute returns (which has been withdrawn). The percentage returns would be wrong as well. 5/100 is 5% returns. 5/95 is more than 5%.

There are many forms of returns. Hence you will notice they are using time weighted and money weighted returns % instead of simple return.

The net deposit serves to reflect the absolute amount of returns. When there is a div payout , net profit can still be 0.

It doesn't mean that that 5 div becomes profit as if current value already drop by 5. Net profit is still 0

So div 5 reinvested , value 100
Profit = 100 - 100 =0.
It cannot be 105 - 105 as the value depends on the market and not because there is a div payout.

If div is payout
Profit = 95 - 95 = 0
You need to reduce the net deposit because the market value of your holdings has dropped.

 

[direbmem]

I explained already just now.

Let's look at 2 basket

Pocket: 100
Portfolio net deposit: 0

Deposit 100,
Pocket: 0
PND: 100

Div 5 payout,
Pocket: 5
PND: 95 (if you like to use the word principal, you can take it that principal value has changed to 95)

Instead of payout you want reinvest it. It's equivalent to you taking what has been just given to you to your pocket and then putting it back in. Hence,

Div 5 reinvested,
Pocket: 0
PND: 100

Hence cash from div cannot increase net deposit unlike "new cash" coming in from your pocket.

For net profit maybe you can understand it as (P&L including dividends if any).
Which can be derived from taking current value minus net deposit

in the 1st scenario where dividend is not invested, the account still has 100 after withdrawal of dividend of 5. Are you saying it is ok for PND to reflect 95 when the account has 100?

Current Value = 100
Net deposit = 95
Returns = 5
What will be the returns % reflected? 5/95 based on formula Net Profit = Current Value - Net Deposit

If Dividends is not reinvested and not withdrawn,

Current value = 105
Net deposit = 100
Returns = 5
What will be the returns reflected ? 5% right. Based on your previous formula, Net Profit = Current Value - Net Deposit. Returns in % will be different for the 2 cases above right? Which shouldn't be the case? Withdrawal results in higher% returns?

 

[gold_eagle36]

yes this is a gd example!!!!!!!!!! and i warned not to ans in piecemeal ie not gonna be helpful in 1's thinking/analytical.........

actually i have given very clear tips in answering to the case:
just rem
i) Net deposits = Principal!!!!!!!!!!!!!!!!!!!!!!! principal means all DCA/RSP or Lumpsum which u pumped in or wdrawn due to the fact that u needed $ out of your robo/principal

else are rewards/ returns mah, and u need to balance both side of the balance sheet

i have clearly said before i opted out for reinvestg of dividends, previously i was w Stashaway sg income for past one yr, i didnt see them increasing my net deposits when dividends kept coming in
Why then there wasnt an increase in the net deposits at all (even if u r to buy more Reits/ETF at a later timing with all those cash accumulated, they dont blindly buy any day, cos it is NOT a lumpsump investmt)
Of cos diff co. /diff robos got diff accounting methods, still u need to balance the figure mah!!!!!!

Stashaway calling me....NOW

I already explain as clear as I'm able to why cannot increase net deposit when reinvesting div because the other scenario of div payout will reduce net deposit. The % returns shown is money weighted or time weighted.

Simple return is still the same thing to be based on net deposit and current value.

 

[gold_eagle36]

in the 1st scenario where dividend is not invested, the account still has 100 after withdrawal of dividend of 5. Are you saying it is ok for PND to reflect 95 when the account has 100?

Current Value = 100
Net deposit = 95
Returns = 5
What will be the returns % reflected? 5/95 based on formula Net Profit = Current Value - Net Deposit

If Dividends is not reinvested and not withdrawn,

Current value = 105
Net deposit = 100
Returns = 5
What will be the returns reflected ? 5% right. Based on your previous formula, Net Profit = Current Value - Net Deposit. Returns in % will be different for the 2 cases above right? Which shouldn't be the case? Withdrawal results in higher% returns?

Cause this is not like a bank acc where you are expecting the interest to be paid out. And then your deposit in your balance remains the same.

Must look at it as net asset value of the units of etf. The price of etf is independent from the net deposit but if let say there is a div, the value of etf will normally drop. So...


In the first example , the current value will also drop by 5 if you want a payout.
The net deposit also drop by 5. Hence profit = 0.

What I'm saying is that we cannot just use the div payout and then try to calculate the returns.

The net deposit here includes what's been paid out.

Net deposit = total cash in - total cash out.

Hence when there is a div payout,
Net deposit = 100 -5 = 95

When u wan reinvest
Net deposit = 100 - 0. As there is no cash out.

 

[direbmem]

It doesn't mean that that 5 div becomes profit as if current value already drop by 5. Net profit is still 0

So div 5 reinvested , value 100
Profit = 100 - 100 =0.
It cannot be 105 - 105 as the value depends on the market and not because there is a div payout.

If div is payout
Profit = 95 - 95 = 0
You need to reduce the net deposit because the market value of your holdings has dropped.

The current value in the dashboard is not theoretical value, it is the floating market value. It may or may not be reduced by the value of the dividend. So the net deposit should not reduce by 5 to account for the theoretical drop in market value, which may or may not occur. Anyway, reducing market value by reducing deposit value doesn't make sense.
If dividend remains in account and NOT withdrawn, may I know what would you put in for Current Value, Net Profit and Net Deposit, assuming floating market value remains the same (it's possible in reality), net deposit of 100 and dividend of 5?

 

[direbmem]

Cause this is not like a bank acc where you are expecting the interest to be paid out. And then your deposit in your balance remains the same.

Must look at it as net asset value of the units of etf. The price of etf is independent from the net deposit but if let say there is a div, the value of etf will normally drop. So...


In the first example , the current value will also drop by 5 if you want a payout.
The net deposit also drop by 5. Hence profit = 0.

What I'm saying is that we cannot just use the div payout and then try to calculate the returns.

The net deposit here includes what's been paid out.

Net deposit = total cash in - total cash out.

Hence when there is a div payout,
Net deposit = 100 -5 = 95

When u wan reinvest
Net deposit = 100 - 0. As there is no cash out.

ETF is not unit trust, I think the current value of the ETF is the last traded price. So should not manually reduce by 5. Going by your logic, If 5 dollars of dividend given out for 20 years, net deposit would become zero? Current Value also 0 since dividend is not profit which would be zero as well?

I think we agree on the reinvested case, let's just focus on dividends NOT reinvested. Only withdrawn or not withdrawn from Stashaway investment account cases.

 

[gold_eagle36]

Yea net deposit will be 0 if payout 20 years. So simple profit will be just current value - net deposit.

Agree current value is independent from net deposit and dependent on market value. I'm just using an example that if market value also drop by 5 for 1 payout, not saying that it has to. Of course in 20 yrs, the market value can change up and down. Nth to do with net deposit.

Dividend not reinvested case = cash out from portfolio = reduce in net deposit.

 

[dappermen]

sorry but tentatively stop debating now!!

i spoke w Stashaway rep:
direbmem wrote: "If net deposit needs to be reduced with withdrawal of dividend, it needs to increase with the deposit of dividend as well. They cannot reduce the the deposit in order to account for the absolute returns (which has been withdrawn). The percentage returns would be wrong as well. 5/100 is 5% returns. 5/95 is more than 5%."
To gold eagle, yes of cos i knew there are TWRets and $-wt returns , but to make things simple mah: esp u r explaining ....

using this gd example (quoted by Direbmem) ov phone, they insisted that we shd NOT look @ net deposits, they enforced that net deposit will keep minusing off your dividends payout!!! I didnt like it
I suggested them to put in a-liner on the Principal amt (which i explained below)

they said we shd get "Tot returns" figure and divided by the Portfolio figure!!!
(they have a tot returns in the App, the total returns keep adding on dividends earned , they even said the moment div is Announced , they would instantly added that amt of div into your Total returns, even though the amt has yet to reflect into your Robo!!!)




(If u read all my comments carefully, i did highlight why did the Current profits also reduced due to the div payout)
i missed out the point of current value (which no1 here xplained it clearly too):
Curr value is not 95 (sad to say) it is 100 (after the in and out)
cos when div is announced, your curr value became 105!! (assuminng dividend is 5sgd at day 1 or day 0 for simplicity)
and they took 3 days to wdraw your div , hence 105-5 = back to 100 again!!!!

so total (simple) returns is 5/100! 5% again!!!
cos they made u took $5 = total returns

not your net deposit (cos your app will reflect this ) S$95 !!
Actually i hated the idea of Stashaway
hence i suggested for them to put in a new 1-liner of Principal amt ( P = to all lump sum/deposit + DCA/RSP and - wdrawals of your own will

i told them to a normal laymen, principal are $ u coughed out of your own freewill!
Returns are returns that is due to the effort of stashaway, the efforts of investmts eg dividends, rewards etc


it is easier to explain this way although there are some areas i didnt manage to check on them cos i didnt know this is HOW they compute net deposits!!!!!!!

 

[dappermen]

to b honest

i felt so headachy understanding why stashaway do it that way

I told them off that a laymen will not appreciate that!!! but i appreciate them callinng when i told them i just couldnt understand their email, glad that they knew why i raised those qns too cos it is so confusing


when deposits are mixed with Returns ie divs?

but when there is an increase due to dividends annnounnced, the net deposit didnt even increase @ all!! but we have to read the other liner ie Total returns (i trust all of u have an app)

i m forced to understand them! i hope syfe will not behave this way!!! anyway my Syfe Reits+ is div reinvested!

 

[dappermen]

Yea net deposit will be 0 if payout 20 years. So simple profit will be just current value - net deposit.

erm.....
this is agreeable ONLY when Curr value has alwys been accounted for dividends rec'd and then less of divs wdrawn
and then to use to Total Returns to compute simple profit %

Tot returns is ALL returns gained without minus ALL the dividends opted out/wdrawn hor (total returns keep adding the Returns ignoring your "returns"/divdends wdrawn)
Only such a "concept"/thinking can balance it out

if this part is NOT clearly highlighted, the formula is NEVER gonna be correct!



which is why i kept emphasizing dont ans in parts, if u really wannna explain it pls explain in wholesale/full pict (so long there is a missing puzzle, we couldnt understand)