Investor from Singapore

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Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Investor from Singapore

Post by flowerpalms » Fri Sep 13, 2019 8:13 am

Dear fellow Bogleheads,

My name is Allan i am an investor from Singapore. I am 30 years old.

I would like to share with you my current 3 fund portfolio:

Singapore stocks: SPDR Straits Times Index ETF (ES3.SI) - standard chartered bank
Global stocks: iShares Core MSCI World UCITS ETF (IWDA - Type ETF) - interactive brokers
Total bonds: Nikko AM SGD Investment Grd Corp Bd ETF (MBH.SI) - standard chartered bank

My allocation target percentage is 110-X(age) and as follows:

Age Singapore stocks Global stocks Total bonds
20 45% 45% 10%
30 40% 40% 20%
40 35% 35% 30%
50 30% 30% 40%
60 25% 25% 50%
70 20% 20% 60%
80 15% 15% 70%

I dollar cost average $1000 monthly to only one asset per month, depending on which asset is the furthest from the portfolio amount.
Example: At age 30, if my global stocks is the furthest away from my total portfolio in terms of %, at 35%, i will invest $1000 into this asset

Rebalancing: Twice a year, in May and Nov

As a retail investor, i understand we see forex trading as leveraged products and glorified gambling. We do not invest in individual stocks as well.
How to better overcome this? And any thoughts for my investing?

vu8
Posts: 354
Joined: Tue May 29, 2018 10:15 am
Location: Columbus, Ohio

Re: Investor from Singapore

Post by vu8 » Fri Sep 13, 2019 9:44 am

I'm not a big fan of rebalancing or bonds, I just buy my VTWAX (VWRA) and never bother rebalancing lol.

Commodities, and Forex are both speculative gambling. Bond yields too little, in a year with 3% inflation the entire yield from bond funds will be eaten away. Not to mention the expense ratio on the bond fund. Not to mention long term and short term dividend taxes.

I'm also not a fan of ishares https://blog.wealthfront.com/avoid-blackrock-etfs/

Watch your expense ratio, buy your VWRA or any low cost all world allocated index funds! :D

DJN
Posts: 508
Joined: Mon Nov 20, 2017 12:30 am

Re: Investor from Singapore

Post by DJN » Fri Sep 13, 2019 10:09 am

hi,
allanyeow wrote:
Fri Sep 13, 2019 8:13 am

My allocation target percentage is 110-X(age) and as follows:

Age Singapore stocks Global stocks Total bonds
20 45% 45% 10%
30 40% 40% 20%
If I understand what you mean, you are going to invest a large percentage of your money into an economy that is less than 1% of global GDP albeit a fantastic economy. This is pretty strong local bias if that is correct? I would have thought something nearer a 10% or less bias to your local economy might be better.
DJN
Yah shure

Schlabba
Posts: 151
Joined: Sat May 11, 2019 9:14 am

Re: Investor from Singapore

Post by Schlabba » Fri Sep 13, 2019 12:57 pm

vu8 wrote:
Fri Sep 13, 2019 9:44 am
I'm also not a fan of ishares https://blog.wealthfront.com/avoid-blackrock-etfs/
I've seen iShares reduce their TER since I started investing in 2016. Maybe this is not much of an issue these days?

I also don't know how it works in Singapore, but I live in a country without capital gains tax. I can switch etf's whenever I want. (We pay a "wealth tax" of roughly 1.5% of net worth each year. Before you ask; yes I am planning to relocate to a better country soon.)
IWDA: MSCI World | EMIM: MSCI Emerging Markets | AGGH: Global Aggregate Bond Hedged to €

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Fri Sep 13, 2019 2:01 pm

vu8 wrote:
Fri Sep 13, 2019 9:44 am
I'm not a big fan of rebalancing or bonds, I just buy my VTWAX (VWRA) and never bother rebalancing lol.

Commodities, and Forex are both speculative gambling. Bond yields too little, in a year with 3% inflation the entire yield from bond funds will be eaten away. Not to mention the expense ratio on the bond fund. Not to mention long term and short term dividend taxes.

I'm also not a fan of ishares https://blog.wealthfront.com/avoid-blackrock-etfs/

Watch your expense ratio, buy your VWRA or any low cost all world allocated index funds! :D
Do you mean you invest in VWRA only? No 3 fund portfolio?
I dont think you can put rebalancing into the picture if you do not have the 3 types of funds...

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Fri Sep 13, 2019 2:06 pm

DJN wrote:
Fri Sep 13, 2019 10:09 am
hi,
allanyeow wrote:
Fri Sep 13, 2019 8:13 am

My allocation target percentage is 110-X(age) and as follows:

Age Singapore stocks Global stocks Total bonds
20 45% 45% 10%
30 40% 40% 20%
If I understand what you mean, you are going to invest a large percentage of your money into an economy that is less than 1% of global GDP albeit a fantastic economy. This is pretty strong local bias if that is correct? I would have thought something nearer a 10% or less bias to your local economy might be better.
DJN
Not sure what you mean by large percentage of money.

I only DCA to one asset per month, depending which asset has a further percentage away from my total portfolio amount.
For example: at 30 years old and following the allocation targets i have 40% for local stock, 40% for global stock and 20% for total bonds. My total bonds this month is only 18% of my portfolio. So i will put the $1000 into my bond asset.
So as to ensure that my 3 funds stick as close as possible to my allocation target percentages.
Rebalancing twice a year in May and Nov

alibaba123
Posts: 24
Joined: Mon Dec 31, 2018 12:51 pm

Re: Investor from Singapore

Post by alibaba123 » Fri Sep 13, 2019 10:31 pm

OP you are 30 and our economy comprises less than 1% of world's market share. I am around your age and from Singapore too. I am 100% in VWRD.

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Sat Sep 14, 2019 5:19 am

alibaba123 wrote:
Fri Sep 13, 2019 10:31 pm
OP you are 30 and our economy comprises less than 1% of world's market share. I am around your age and from Singapore too. I am 100% in VWRD.
100% in VWRD? Whats ur monthly investment?

Why dont you have a 3 fund then?

alibaba123
Posts: 24
Joined: Mon Dec 31, 2018 12:51 pm

Re: Investor from Singapore

Post by alibaba123 » Sat Sep 14, 2019 7:24 am

Two reasons:

- i'm young and i have a long time horizon. I don't plan to retire anytime soon (nor can i) and 100% stocks has the highest expected return.
- i do not have a local home bias as our economy comprises less than 1% of the world's economy. Putting a significant allocation as home bias isn't a good move imo.

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Sat Sep 14, 2019 8:21 pm

would like to know if you already have a 3 fund portfolio, will you still look at trading/investing in other stuff?
since our monthly investment DCA always contribute to the portfolio right?

alibaba123
Posts: 24
Joined: Mon Dec 31, 2018 12:51 pm

Re: Investor from Singapore

Post by alibaba123 » Sat Sep 14, 2019 10:03 pm

I'm not quite sure what you mean. Are you asking if you should be investing in other stuff other than stocks and bonds? If so, before investing I would look into any debt that I have. If the interest on those debts are significant (3% or more) I would consider paying those down first.

For your equity portion you are already investing monthly into Index funds. You should not be investing into any other individual stocks, forex etc.

However for reasons stated above, I would replace your equity portion with a single fund VWRA or VWRD as it is more reflective of the global market and it includes emerging markets (which your current 3 fund portfolio does not). For your bond portion i have not looked into your specific nikko am bond fund so I will not comment on that. If you are very comfortable with your current 3 fund portfolio then go ahead and continue to invest in those, no need to buy individual stocks and please don't play forex.

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Sun Sep 15, 2019 1:00 am

yes that's what i mean. i shall stick to my 3 fund portfolio.

Imo, its not that much worry about performance anxiety, but rather how to better overcome temptations in social media where nowadays there are so many of such "gurus" teaching about investing in stocks, trading forex, options trading etc (not going to mention any names here though) but many fall into the trading trap.

with a 3 fund portfolio in place, lets not get distracted!

karan10489
Posts: 21
Joined: Tue May 29, 2018 6:40 am

Re: Investor from Singapore

Post by karan10489 » Tue Sep 17, 2019 6:51 am

So I'm the same age and based in SG and happy to share my experience since I started with the same concept last year (SG + Global + Bond 3 fund portfolio) but since then have changed my perspective.

My experiences:
1. I'm no longer a fan of the STI ETF not just because of the small size as others have mentioned but also because:
a. The index is not really diversified -
i. 59% is financials and the 3 local banks alone represent ~40%. In an era of compressed margins due to low rates, this bears thinking about.
ii. About 9% is telecoms (8% is Singtel alone) which, since you live here, you'd be aware that it's not a great place to be for the time being :)
iii. Industrials are 13% which are subject to trade tensions in an export driven economy so we may see wide fluctuations in valuations over time
b. SGX is no longer a goto destination for most equity listings in fact there has been a net reduction in listed companies this year. Hence the lack of growth companies and the over representation by mature, dividend players
c. STI has lagged the US (NASDAQ/S&P) and hang seng indices by quite a margin over the last couple of decades so there is limited upside.
d. IWDA includes the components of the STI :) So you are possibly over represented in SG companies than is required.
e. If you like exposure to local stocks, it may be worth looking at the largest individual firms (the 3 banks, Singtel, Capita etc) and you would achieve pretty much the same exposure for no management fee.

2. Global Fund: IWDA - I use the same but i also add in EIMI which represents emerging markets.

3. MBH - The fund is <1 year old and is a tad expensive for a corporate bond fund, there are cheaper alternatives listed on LSE. I use A35 instead which is govt. and quasi govt bonds for a 0.15% TER. The idea here is to have "ballast" in boglehead speak and maintain some stability when markets see saw while also having exposure to SGD.

Final note on Expenses, if you put in 1k every month, be mindful of brokerage commissions which are more expensive for SG based instruments, you may want to reconsider the frequency of buying to reduce expenses

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Tue Sep 17, 2019 7:32 am

thank you so much for your comprehensive input!

lets continue to invest :sharebeer :sharebeer

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PurpleArc
Posts: 69
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Location: on the go, always

Re: Investor from Singapore

Post by PurpleArc » Sat Sep 21, 2019 1:47 pm

I frequent Singapore each month and have trading account with OCBC, I was looking at local ETFs or indexes because I believe Singapore economy and SGD will be resilient.

Unfortunately I simply cannot find an ETF denominated in SGD that has large enough liquidity > 100M. If you can find out please let me know, it could be any industry-focused ETF.

I am considering going into one of the three banks and hold individual stocks, are you guys doing this?

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Sat Sep 21, 2019 11:37 pm

PurpleArc wrote:
Sat Sep 21, 2019 1:47 pm
I frequent Singapore each month and have trading account with OCBC, I was looking at local ETFs or indexes because I believe Singapore economy and SGD will be resilient.

Unfortunately I simply cannot find an ETF denominated in SGD that has large enough liquidity > 100M. If you can find out please let me know, it could be any industry-focused ETF.

I am considering going into one of the three banks and hold individual stocks, are you guys doing this?
There are three things to look out for when you are picking an ETF:
1. Low fees (below 0.3% per annum is fine);
2. Plenty of assets in the fund (above $100 million is fine);
3. "Cash" or "physical", not "synthetic" (any ETF from iShares, Vanguard or SPDR is fine; those three companies don't issue synthetic ETFs).

Low cost, liquid, good sized

In Singapore, because the ETF market is smaller, it's pretty easy to pick out the ETFs to use. On the equity side, we want to use the SPDR Straits Times Index ETF,, stock code ES3; it's the biggest, most liquid STI ETF in the Singaporean market, and it has a very reasonable 0.3% expense ratio.

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PurpleArc
Posts: 69
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Location: on the go, always

Re: Investor from Singapore

Post by PurpleArc » Mon Sep 23, 2019 1:00 am

flowerpalms wrote:
Sat Sep 21, 2019 11:37 pm
In Singapore, because the ETF market is smaller, it's pretty easy to pick out the ETFs to use. On the equity side, we want to use the SPDR Straits Times Index ETF,, stock code ES3; it's the biggest, most liquid STI ETF in the Singaporean market, and it has a very reasonable 0.3% expense ratio.
This is useful information, I might go into ES3 in the next buy. Thank you.

Topic Author
flowerpalms
Posts: 13
Joined: Fri Sep 13, 2019 8:02 am

Re: Investor from Singapore

Post by flowerpalms » Sun Sep 29, 2019 3:46 am

PurpleArc wrote:
Mon Sep 23, 2019 1:00 am
flowerpalms wrote:
Sat Sep 21, 2019 11:37 pm
In Singapore, because the ETF market is smaller, it's pretty easy to pick out the ETFs to use. On the equity side, we want to use the SPDR Straits Times Index ETF,, stock code ES3; it's the biggest, most liquid STI ETF in the Singaporean market, and it has a very reasonable 0.3% expense ratio.
This is useful information, I might go into ES3 in the next buy. Thank you.
no problem, further questions you are free to post here and we can discuss

pomwi
Posts: 17
Joined: Fri Jul 04, 2014 12:43 am

Re: Investor from Singapore

Post by pomwi » Tue Oct 01, 2019 9:09 am

I don't class myself as an expert, but can speak from my own experience and research being based in Singapore and "doing ETFs for about 5 years".

Personal view of Straits Times Index ETFs are that it's not a place we've seen much growth. Just look at the graphs for the past few years.
However... many in Singapore seek dividend stocks, and Singapore is actually good for these. Especially in REITs.
You could pick some good dividend stocks from the STI if you wanted to invest locally. This is a good place to look for information: https://www.dividends.sg/rank/blue . Many people seem to pick SingTel, StarHub. DBS, UOB, CapitaLand, Keppel etc. for historically good dividends.

One way to do this without stock picking is to use one of the local RoboInvest services. Most of the major banks have them. The AUM fees are quite high by Boglehead standards (0.6% or 0.8% for example), but you do benefit from minimal transaction fees as the Roboinvest service bulk-buys the stocks and you just pay a small portion. It also automatically re-balances and re-works the portfolio if need be. You can pick from local stocks, REITs etc. However, yes, you could just do this yourself with a brokerage of your choice, optimising your transaction fees as you batch your dollar cost averaging.

Another way to access REITS (with apparently good dividend return according to dividends.sg) is to use a Singapore REIT ETF, such as Lion-Phillip S-REIT ETF (CLR.SI). Expense ratio (according to Yahoo) is 0.6%.

If you would like bond components there are now both government and corporate bond ETFs on the Straits Times Index. There are also services from the major banks to automatically invest a given amount each month in these ETFs (in addition to individual stocks as mentioned above), e.g. OCBC's Blue Chip service. There are plenty of options, including DIY with local brokerages, but as others have mentioned the fees for domestic transactions can be quite high, so you may need to do larger batches.

For overseas, as others have said, it may be an idea to explore an appropriate portfolio of global stocks/bonds/commodities as suits your desired structure and risk appetite.

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PurpleArc
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Location: on the go, always

Re: Investor from Singapore

Post by PurpleArc » Wed Oct 02, 2019 9:51 pm

pomwi wrote:
Tue Oct 01, 2019 9:09 am
However... many in Singapore seek dividend stocks, and Singapore is actually good for these. Especially in REITs.
You could pick some good dividend stocks from the STI if you wanted to invest locally. This is a good place to look for information: https://www.dividends.sg/rank/blue . Many people seem to pick SingTel, StarHub. DBS, UOB, CapitaLand, Keppel etc. for historically good dividends.

One way to do this without stock picking is to use one of the local RoboInvest services. Most of the major banks have them. The AUM fees are quite high by Boglehead standards (0.6% or 0.8% for example), but you do benefit from minimal transaction fees as the Roboinvest service bulk-buys the stocks and you just pay a small portion. It also automatically re-balances and re-works the portfolio if need be. You can pick from local stocks, REITs etc. However, yes, you could just do this yourself with a brokerage of your choice, optimising your transaction fees as you batch your dollar cost averaging.

Another way to access REITS (with apparently good dividend return according to dividends.sg) is to use a Singapore REIT ETF, such as Lion-Phillip S-REIT ETF (CLR.SI). Expense ratio (according to Yahoo) is 0.6%.
This is interesting information. Looking at the site dividends.sg the payout for the top list is pretty high, and they have been consistently so in the past years. What is allowing the likes of "HUTCHISON PORT HOLDINGS TRUST" to payout such high dividends consistently.

Is it possible to buy Lion-Phillip S-REIT ETF, or other S-REITS directly from a stocks trading account in SGX.

pomwi
Posts: 17
Joined: Fri Jul 04, 2014 12:43 am

Re: Investor from Singapore

Post by pomwi » Thu Oct 03, 2019 7:11 am

PurpleArc wrote:
Wed Oct 02, 2019 9:51 pm
Is it possible to buy Lion-Phillip S-REIT ETF, or other S-REITS directly from a stocks trading account in SGX.
Yes, through a broker which has access to the SGX.

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