STI ETF

[d5dude]

VTI and STI are 2 good combinations for the layman investor.

Probably 80-20 allocation is good enough for the equity portion.

Vanguard has some research on this and the recommendation is domestic allocation should be roughly equivalent to index's weightage on VTI, so it should be more like 99% VTI, 1% STI.

 

[Mecisteus]

Vanguard has some research on this and the recommendation is domestic allocation should be roughly equivalent to index's weightage on VTI, so it should be more like 99% VTI, 1% STI.

The research is based on past data.

Going forward, nobody can tell you what is the best allocation.

99-1 is going to be meaningless. It is as good as saying don't need a domestic allocation.

 

[d5dude]

The research is based on past data.

Going forward, nobody can tell you what is the best allocation.

99-1 is going to be meaningless. It is as good as saying don't need a domestic allocation.

The purpose is to achieve a well balanced portfolio thats reasonably diversified, nobody can predict outcomes.

1% is rather meaningless but thats the size of our market, its risky to overweight such a tiny market, especially one thats not well diversified.

 

[Mecisteus]

The purpose is to achieve a well balanced portfolio thats reasonably diversified, nobody can predict outcomes.

1% is rather meaningless but thats the size of our market, its risky to overweight such a tiny market, especially one thats not well diversified.

Basically you are opting out of STI because it has been an underperformer.

If STI was a star performer in the past 10 years, would you stick to 1% also?

10-90, 20-80 or 30-70 is also reasonably diversified. Of course these allocations are not based on size of economy. A preference for home is at play here.

Anyway, we can agree to disagree.

You say 0% STI but I say it is good to have some allocation to STI.

 

[d5dude]

Basically you are opting out of STI because it has been an underperformer.

If STI was a star performer in the past 10 years, would you stick to 1% also?

10-90, 20-80 or 30-70 is also reasonably diversified. Of course these allocations are not based on size of economy. A preference for home is at play here.

Anyway, we can agree to disagree.

You say 0% STI but I say it is good to have some allocation to STI.

I'm not opting out of STI because its done poorly, I bought Japan nearly 10 years ago even though it was doing very poorly, I think its a huge market one cannot just ignore it. If I was just chasing performance I would have all in QQQ since thats the best performer in the last 10 years, to me QQQ has the same issues as STI, a few stocks make up a big portion of the fund, thats a red flag for me.

So my reason for not bothering with STI is 2 fold, 1) its really tiny, 2) it has very poor diversification. Of course others may disagree, I'm not saying its my way or the highway, its just my opinion.

 

[CWL84]

I am learning alot from the various lively comments here.

STI ETF does seem to be lagging (alot!) when compared to bigger index like S&P 500. If so, does one put money on S&P 500?

I suppose different market segments cater to different folks. There are some who would put their cash in fixed deposits. Some who favour bonds. Some who prefer equities. Some who trust cryptocurrencies. Some who do FX, Some who dabble with gold. Some believe in real estate. There would be no end to the comparisons, and that is the beauty of investment - the sheer variety that either amazes you or deters you.

We usually invest in what know of, what we believe in and are comfortable with. No doubt overseas markets do give greater returns, albeit with greater risk.

I personally am vested in ES3 as I like the diversification, stability (low volatility) and predictable dividends (of about 4.5%) it offers. I do stay vested in some Reits too. I am not familiar with the US or HK markets (a pity that some would exclaim!).

I reckon the constituents in STI would be reviewed regularly. Just as MSCI Singapore did a review recently : https://www.businesstimes.com.sg/stocks/msci-singapore-exclusions-shave-s863m-off-market-value

Crisis like now should provide clearer evidence for companies that should be added or deleted from the STI constituents. I definitely look forward to it!

I do appreciate the frank and open suggestions here. It does make me reconsider how I should deploy my money. However, I still place my faith in Singapore. Coz this home? Haha

Your faith is actually home bias. That is one of the most common biases in investor behaviours. For long term investing, it is highly recommended to diversify your investments across several different countries and market sectors so as to maximise your returns while lowering the volatility of your portfolio. The volatility of our market is actually very high among all developed markets, in fact we are ranked 2nd, just right behind top place Hong Kong (Figure 1a: https://www.nbim.no/contentassets/7...industry-effects-in-global-equity-returns.pdf).

Investing in the S&P500 is a great idea but you should not only invest in US and Singapore. While the performance of S&P500 has been stellar for the past several years, no one knows what the future returns of the S&P500 will be like and whether markets in other countries will outperform the S&P500. If you invest in a globally diversified ETF, you don't have to worry about those uncertainties.

The general recommendation here is to invest in ETFs like the IWDA/VWRA where the investment is not focused solely on the US. IWDA invests in several developed markets (US included) around the world and VWRA invests in both developed and emerging markets.

If you would like a more detailed explanation of the importance of diversifying globally, I recommend that you check out this youtube video and channel. Even though it is Canadian centric, his content is still very relevant for all beginner investors.

 

[Tool18]

Agree on this minimally in local stocks which at least have a global presence . Else lazy way just throw into us markets ETF like IUIT VUAA IWDA Etc

Your faith is actually home bias. That is one of the most common biases in investor behaviours. For long term investing, it is highly recommended to diversify your investments across several different countries and market sectors so as to maximise your returns while lowering the volatility of your portfolio. The volatility of our market is actually very high among all developed markets, in fact we are ranked 2nd, just right behind top place Hong Kong (Figure 1a: https://www.nbim.no/contentassets/7...industry-effects-in-global-equity-returns.pdf).

Investing in the S&P500 is a great idea but you should not only invest in US and Singapore. While the performance of S&P500 has been stellar for the past several years, no one knows what the future returns of the S&P500 will be like and whether markets in other countries will outperform the S&P500. If you invest in a globally diversified ETF, you don't have to worry about those uncertainties.

The general recommendation here is to invest in ETFs like the IWDA/VWRA where the investment is not focused solely on the US. IWDA invests in several developed markets (US included) around the world and VWRA invests in both developed and emerging markets.

If you would like a more detailed explanation of the importance of diversifying globally, I recommend that you check out this youtube video and channel. Even though it is Canadian centric, his content is still very relevant for all beginner investors.

 

[qwenttan]

is g3b worth investing for long term?

 

[dreamer123]

is g3b worth investing for long term?

For long term, yes, it is worth. I am vested in G3B, ES3 and CFA

 

[Meowtiko]

For long term, yes, it is worth. I am vested in G3B, ES3 and CFA

Hi I am a newbie.. care to enlighten whats the reason you invest in both g3b and es3 which tracks the same index?

 

[crystalnox]

Hi I am a newbie.. care to enlighten whats the reason you invest in both g3b and es3 which tracks the same index?

Probably from different brokers, maybe he started with one then switched over but didn't sell off his older holdings.

 

[Iyarash11]

my question will be why they start 2 etf on STI?

 

[Mr. Wood]

my question will be why they start 2 etf on STI?

different fund managers wanting share of the pie.

 

[Iyarash11]

different fund managers wanting share of the pie.

if a company badly manage end up like hyflux we know the story and ending

what about sti etf, any chance the fund will run into problem and impact investors lose money not due to market crash/index drop

 

[reddevil0728]

if a company badly manage end up like hyflux we know the story and ending

what about sti etf, any chance the fund will run into problem and impact investors lose money not due to market crash/index drop

That can be said about any companies?

ES3 has been around for much longer than G3B and much bigger

 

[Iyarash11]

so ish

STI 在 ETF 在

 

[reddevil0728]

so ish

STI 在 ETF 在

??????????

 

[pcmdan]

Means unless Singapore Financial Market close down for good, otherwise, STI will never be gone. If STI will never be gone, STI ETF will never be gone too.

Any companies within the basket in STI ETF, if the company is underperforming, STI can easily replace it with another company.

 

[lanzhu60]

Means unless Singapore Financial Market close down for good, otherwise, STI will never be gone. If STI will never be gone, STI ETF will never be gone too.

Any companies within the basket in STI ETF, if the company is underperforming, STI can easily replace it with another company.

yes, sti etf is the safer bet as u invested on the blue chips of sg. and any underperforming stock wil be replaced. long term we should be able to see it above 3 bucks

 

[weng0202]

Yeah STI ETF is safer. If one stock crash, will be diluted by the rest. If go too low, will be taken out from index. So the risk is minimised.