Dear Mr Tan,
I've read several articles that you've written where you've advocated buying the STI ETF. Thanks for taking the time to explain in simple terms the pros and cons of the issue.
I belong to the passive investing camp and believe in buying and holding a diversified basket of index-tracking, low-cost funds tracking several world markets and different asset classes. The STI ETF appears to be one such index-tracking, low-cost fund.
However, investing in the STI ETF only gives you exposure to the Singapore market, which is less than 1% of the global market. While it is a good way to participate in the local stock market, it is certainly inadequate if one wants to create and hold a diversified portfolio.
I'm interested to know if you or your readers have managed to construct a portfolio of low-cost (less than 1% expense ratio), passively managed index funds that track global market indices, investing from Singapore?
REPLY
I advise people to invest in an ETF rather than to manage their own stocks. They may forget to take up rights issue or sell the rights, leading to loss due to dilution of their shares. The dividends due to them may be paid to the wrong account. To avoid these losses, the investor has to keep track of the shares - which is quite tedious. It is better to leave these matters to the fund manager of the ETF.
you better engage an investment professional to do it. And please don't ever engage a insurance agent
ReplyDeleteWhat do they know about portfolio? They sell you the last high return fund.
CPF is littered with lot of losses made by insurance agents who sell you the best performing funds, last year best performing funds.
If you are accumulating for retirement the advice is stay away from these scumbags insurance agents both male and female lest you see your retirement up in smoke.
May i suggest that your readers diversify their investment interface as well. There are unfortunately cases of even the most reputable investment advisers and groups claiming to offer highly diversified portfolios or products that later turn out to be a scam or fraudulent. Also people do change with time and personal circumstance. The person or company who was absolutely trustworthy and profitable last year may not be so this year.
ReplyDeleteDiversify in liquidity, interface and if possible currency. Watch out for any investment where the only source of investment information is the person you are dealing with or their website. Take a look for yourself. If you look at any scam in recent years from Bre-X to Madoff they typically go back to a single tightly controlled source of information that is then widely exaggerated or enhanced by the people selling it.
Finally beware of friends and family earning commision. Dont confuse friendship and investing.
Insurance agents either sell you ILPs which lose money for you or lock you up in some single premium endowments which earn you nothing more than to preserve your capital, ie.to preserve your status quo.That is , if you are poor they help you to stay poor. This is the best they can do for you and that is all they know. They have nothing to offer you.
ReplyDeleteBut who cares? They want your commission only. To help you accumulate for retirement? Wait long long.
To answer the guy's question - yes, there is.
ReplyDeleteIt's the Lyxor MSCI World 10$ USD ETF, and the stock code on the SGX is H1P.
It's benchmarked against the MSCI World index, which is exactly what you want for a globally diverse fund. The expense ratio isn't terrific (0.45%) but it's comparable to other funds with the same benchmark. And there's an active market maker, so it won't cost you too much to cross the spread.
The only catch that I can see - but it's a big one - is that it's US dollar denominated. That means you're taking on a BIG slug of USD/SGD currency risk as well. Not ideal, especially if that's supposed to be your retirement money. So that's the fund you want, but be VERY careful with that currency exposure!