Thursday, February 07, 2008

Keep invested in STI ETF

Hi Mr. Tan,
I have $90,000 invested in STI ETF. It was slowly accumulated through POEMS Share Builders Plan over the last few years.

Should I sell the ETF and buy individual blue-chip shares? Will it results in more savings over the long-term? Will selling all the shares in one go have any effects on the selling price?
Looking forward to your reply.

REPLY

It is better to keep you STI ETF. It is professionally managed, well diversified. You do not have to worry about collecting dividends, subscribing to rights issues, etc. These are taken care for you. The expense ratio of 0.3% is small.
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4 comments:

Anonymous said...

Apart from POEMS Share Builders Plan, what are the alternatives to fixed-monthly investment?

February 07, 2008 12:51 PM
Anonymous said...

Mr Tan, for the STI ETF, what happens when a dividend is declared? How is it distributed to the investors? I have the same query about the NTUC Combined Fund which i recently bought - what happens to the dividends declared on the shares held by the funds? Do these dividends increase the value of my investments?

February 08, 2008 12:16 AM
Collin said...

elmy, you can invest in a well diversified unit trust with low expense ratio through RSP (Regular Savings Plan).

February 08, 2008 12:17 AM
Anonymous said...

IMHO, to change from STI ETF to well diversified unit trust with low expense ration through RSP as collin suggested would be retrogressive.

1. The person has already accumulated his saving through Share builders plan which is a RSP.

2. The person already holds STI ETF - which is very well diversified.

3. STI ETF with 0.3% expense ratio is low cost compared to any unit trust in the market.

I used to invest in Unit Trust / Mutual Funds before but ever since I have found about mutual fund, I stay away from UT/MF and most of my friends who used to invest in UT/MF are beginning to stay away from it.

One funny phenomenon I have observed is that if you meet any IFA ("Independent" Financial Advisor) and you start talking with him / her about ETF, he/she will avoid you at all costs :)

February 15, 2008 1:46 AM

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