What's the difference between nikko am sti etf and spdr sti etf?

[joetseng]

I looking at buying into sti but I not sure which one to go with.

Am also looking to buy my virgin reits. Is it a good time or is it better to wait?

 

[Shiny Things]

I looking at buying into sti but I not sure which one to go with.

The Nikko one has a smaller lot size (100 shares vs 1000); the SPDR one has slightly tighter spreads (the equivalent of 0.3% less cost to trade).

If you can afford it, buy the SPDR version; otherwise, the Nikko version is fine.

 

[joetseng]

The Nikko one has a smaller lot size (100 shares vs 1000); the SPDR one has slightly tighter spreads (the equivalent of 0.3% less cost to trade).

If you can afford it, buy the SPDR version; otherwise, the Nikko version is fine.

I can afford the spdr one but is it advisable to buy both concurrently? Like use the remaining money to buy a few nikko lots. I'm worried 2 or 3 nikko lots may be negligible. Nonetheless I must admit I'm very new to this. Any advice?

 

[makav31i]

I can afford the spdr one but is it advisable to buy both concurrently? Like use the remaining money to buy a few nikko lots. I'm worried 2 or 3 nikko lots may be negligible. Nonetheless I must admit I'm very new to this. Any advice?

From the way I see it, the Nikko AM is good if you want to sell some of your STI stocks to rebalance your portfolio and not be selling 1 lot of 1000 SPDR STI ETF shares..

 

[supermanqwd]

Sorry to interupt, just to check. Singapore sti is it the same as buying nikko am sti etf? It does not give dividends right?

 

[makav31i]

Sorry to interupt, just to check. Singapore sti is it the same as buying nikko am sti etf? It does not give dividends right?

SPDR STI ETF and Nikko Am Singapore STI ETF both give dividend with the difference of the former is being traded in 1 lot of 1000 shares and the latter being traded in 100 shares..Look at the SGX website to look at the past divided given out by the two stocks..

Added links..

http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/corporate_action

 

[supermanqwd]

Just to clarify, it follows the same as the singapore sti?

 

[makav31i]

Just to clarify, it follows the same as the singapore sti?

About there plus minus...

 

[Tornesoul]

(the equivalent of 0.3% less cost to trade).

Hi Shiny Things, dont really understand this sentence, could you clarify? thanks!

 

[Shiny Things]

Hi Shiny Things, dont really understand this sentence, could you clarify? thanks!

Sure. The SPDR STI ETF almost always trades one cent wide (like 3.02 bid, 3.03 offered), while the Nikko one sometimes trades 2-3 cents wide (like 3.01 bid, 3.04 offered). So if you buy the Nikko one instead of the SPDR one, you're paying an extra 1 cent per share, give or take - about 0.3%.

 

[noedig]

I am also deciding between the SPDR and Nikko ETF (they are the 2 main STI ETFs right?).

Which one will be better for holding long term?

 

[Epps_Sg]

I am also deciding between the SPDR and Nikko ETF (they are the 2 main STI ETFs right?).

Which one will be better for holding long term?

For holding long term, you would want to minimise the annual fees as much as possible to maximise returns. I would choose SPDR STI ETF for its lower annual fees, higher liquidity, lower spread, good tracking and possibly slightly higher dividends.

 

[chopra]

just to confirm

these 2 are considered local products right? Ie, no custodian fee?

 

[makav31i]

just to confirm

these 2 are considered local products right? Ie, no custodian fee?

The stock can be transferred to your CDP account so no custodian fees..

 

[lzydata]

They are very similar. Same benchmark. Same physical replication strategy, no derivatives. Even roughly the same price level.

Other differences besides the different lot size:

1. SPDR's expense ratio for the year ended 30 Jun 2012 was 0.3%. NikkoAM's was 0.4%. Yes, this is a very small difference - if you invest $10,000, it is the difference between paying $30 a year or $40 a year. Unit trusts charge much more. But it's still something, since they are basically doing the same thing.

2. SPDR has roughly 3 times the assets of NikkoAM. This matters because of economies of scale - just like Vanguard in the US has been able to steadily cut its expense ratios as more and more people invest in their funds.

3. SPDR is more liquid than NikkoAM and seems to trade with tighter spreads, as Shiny Things pointed out.

4. SPDR reported a 1-year tracking error (price returns relative to the index) of 0.66%; NikkoAM reported 1.01% for the same period. But strangely NikkoAM also reports better total returns than SPDR for the past year. These variations happen even with very similar products.

If you really want to do regular investing then go with NikkoAM and its smaller lot size. Otherwise I'd choose SPDR.

 

[Ferns_Mccanus]

Hi,

POSB has an invest-saver plan which allows you to buy units of the Nikko AM STI ETF from $100 upwards.

However, on the brochure it says "Low sales charge of 1% per transaction with a minimum investment sum of S$100"

Assuming the 0.4% expense ratio from below, does that mean I'm actually paying 1.4% for this investment?

If that's the case, it would be more economical to do it myself, except that it is more troublesome if I had to remember to buy it every month (Would like to apply dollar cost averaging). Right?

However, there is yet another issue. Buying through the brokerage involves a commission of 0.275% or $25 whichever is higher, so if I would like to dollar cost average and buy a few (<10) lots of the Nikko version every month, the commission would eat into my savings drastically.

Which then implies there is no point buying the Nikko version unless I'm willing to buy more lots, but if I'm buying more lots, then I might as well go for the SPDR version.

Is there something I'm missing here? The only way to dollar cost average without paying high commissions and avoiding the sales charge is to utilise the Stan Chart brokerage which has no minimum charge. Am I right about this?

Are there any other options if I would like to invest a regular amount every month in the STI ETF, but would like to reduce my transaction costs?

 

[pigubaoza]

Hi,

POSB has an invest-saver plan which allows you to buy units of the Nikko AM STI ETF from $100 upwards.

However, on the brochure it says "Low sales charge of 1% per transaction with a minimum investment sum of S$100"

Assuming the 0.4% expense ratio from below, does that mean I'm actually paying 1.4% for this investment?

If that's the case, it would be more economical to do it myself, except that it is more troublesome if I had to remember to buy it every month (Would like to apply dollar cost averaging). Right?

However, there is yet another issue. Buying through the brokerage involves a commission of 0.275% or $25 whichever is higher, so if I would like to dollar cost average and buy a few (<10) lots of the Nikko version every month, the commission would eat into my savings drastically.

Which then implies there is no point buying the Nikko version unless I'm willing to buy more lots, but if I'm buying more lots, then I might as well go for the SPDR version.

Is there something I'm missing here? The only way to dollar cost average without paying high commissions and avoiding the sales charge is to utilise the Stan Chart brokerage which has no minimum charge. Am I right about this?

Are there any other options if I would like to invest a regular amount every month in the STI ETF, but would like to reduce my transaction costs?

very interested to know the answers to the questions here too.

 

[Jajoba123]

I looking at buying into sti but I not sure which one to go with.

Am also looking to buy my virgin reits. Is it a good time or is it better to wait?

why don't u buy US ETF, Vanguard. fee as low as 0.05%.
REIT not sure but when interest goes up when US bond buying program ends, tat will be some changes in the REIT.

 

[Shiny Things]

why don't u buy US ETF, Vanguard. fee as low as 0.05%.
REIT not sure but when interest goes up when US bond buying program ends, tat will be some changes in the REIT.

Good point, but the thing is, he's looking for exposure to Singaporean stocks. The US ETFs give him exposure to American stocks (plus a healthy slug of FX risk), which is not what he's after.

 

[Shiny Things]

Hi,

POSB has an invest-saver plan which allows you to buy units of the Nikko AM STI ETF from $100 upwards.

However, on the brochure it says "Low sales charge of 1% per transaction with a minimum investment sum of S$100"

Assuming the 0.4% expense ratio from below, does that mean I'm actually paying 1.4% for this investment?

If that's the case, it would be more economical to do it myself, except that it is more troublesome if I had to remember to buy it every month (Would like to apply dollar cost averaging). Right?

Yep, you're paying for convenience.

It's not as simple as "I'm paying 1.4%", though - you pay 1% upfront, and then 0.4% per year (though the 0.4% isn't an actual fee - it just gets taken out of the ETF, so you don't actually pay anything).

Is there something I'm missing here? The only way to dollar cost average without paying high commissions and avoiding the sales charge is to utilise the Stan Chart brokerage which has no minimum charge. Am I right about this?

Are there any other options if I would like to invest a regular amount every month in the STI ETF, but would like to reduce my transaction costs?

Yes, you're right - Stanchart's the best option for dollar-cost averaging, whether you're trading the Nikko or the SPDR version. And there's OCBC's BCIP, which I think is a bit cheaper than an RSP sort of thing, but not as cheap as Stanchart.