This post is part of a series of posts that discuss about the STI ETF in detail. To access the other posts in this series, click here.
4. Enter the price that you wish to purchase at, whether you wish to buy or sell, number of shares and whether you wish to buy using CPF. Do take note that the quantity is in number of shares and 1 lot is equal to 1000 shares. Thus for example, if you wish to buy 3 lots, enter 3000 shares.
After your order has been processed, do remember to pay for the STI ETF that you have purchased. within 3 days. In other words, the day that you bought the stocks is known as T and you will need to pay for your stocks by T+3. Currently there are 3 ways of paying and they are listed below.
EPS - EPS stands for Electronic Payment for Shares and you can pay for your shares through your designated online banking account by logging in to it. You can opt for this option when you opened your brokerage and CDP account. Do inform the staff at the brokerage about this option when you open your account and you will have to give them your bank account number. Payment will have to be made by T+3 on 9pm.
GIRO - Payment will be automatically deducted 2 market days after due the date i.e. D + 2. Do ensure that there is sufficient funds in your account by D + 1.
Cheques/Cash - Payment is to be received latest T + 3 by 5 p.m.
Once you have paid for the STI ETF that you have bought, you can login to your CDP account here to make sure that the STI ETF is at the CDP. That should be all. If you have any doubts or queries, feel free to leave comments and I will get back to you.
STI ETF is a fund that tracks the Straits Times Index but can be traded like a stock on the stock exchange thus if you wish to purchase or sell it, you will have to buy it on the local stock market. So how does one get started with buying it on the local stock market ?
In order to purchase or sell the STI ETF, you will need to open a brokerage account and CDP account. A brokerage account will enable you to buy or sell the STI ETF with the brokerage that you have chosen. CDP stands for Central Depository and the CDP account is an account where stocks will be stored or deposited at after you have bought the STI ETF. For a list of brokerages and their brokerage fees, you can take a look at a separate post which I have blogged here while the link to the CDP website is here.
To open a brokerage account and CDP account, all you have to do is to walk into any brokerage and tell the staff that you wish to open a account to buy stocks. They will probably help you to fill in and submit some forms to open the brokerage account and CDP account. The process should take a few days to complete and after which, you will be given the user name and password to login to the brokerage and CDP account. Do take note that you may have to put up a sum of money which is in the region of a few thousand dollars, depending on the brokerage as a form of security deposit. After the accounts are opened, you can take out this sum of money or use it to purchase the STI ETF.
Basically there are two ways in which you can ask your brokerage to do the purchase for you. The first would be to use an online trading account whereas the other option is to call your trading representative or broker to do the purchase for you. I would prefer the 1st method since the brokerage fees will be cheaper as compared to the other method.
If you are using an online trading account to do your purchase, you will be given a user name and a password to log in to your account. I will be showing an example on how to purchase the STI ETF using POEMS by Philips Securities below as I am currently using POEMS to do my purchase although I have other brokerage accounts. Generally, the online trading accounts being offered by all the brokerages are roughly the same.
1. Go to http://www.poems.com.sg/ and login with your user name and password
2. After you have log in sucessfully, click on 'stocks' as highlighted by the red circle and click on 'S' as highlighted by the green circle subsequently.
3. Find 'STI ETF' and click on it
Basically there are two ways in which you can ask your brokerage to do the purchase for you. The first would be to use an online trading account whereas the other option is to call your trading representative or broker to do the purchase for you. I would prefer the 1st method since the brokerage fees will be cheaper as compared to the other method.
If you are using an online trading account to do your purchase, you will be given a user name and a password to log in to your account. I will be showing an example on how to purchase the STI ETF using POEMS by Philips Securities below as I am currently using POEMS to do my purchase although I have other brokerage accounts. Generally, the online trading accounts being offered by all the brokerages are roughly the same.
1. Go to http://www.poems.com.sg/ and login with your user name and password
2. After you have log in sucessfully, click on 'stocks' as highlighted by the red circle and click on 'S' as highlighted by the green circle subsequently.
3. Find 'STI ETF' and click on it
4. Enter the price that you wish to purchase at, whether you wish to buy or sell, number of shares and whether you wish to buy using CPF. Do take note that the quantity is in number of shares and 1 lot is equal to 1000 shares. Thus for example, if you wish to buy 3 lots, enter 3000 shares.
The buy price is the price that those who wish to buy the STI ETF are willing to pay and the sell price is the price that those who wish to sell the STI ETF are willing to pay while the last done is the price which the last transcation was carried out at. You can key in the last done price to buy the STI ETF if you do not wish to wait that long for your order to be fulfilled. Otherwise, you can key in the price you are willing to buy and wait for your order to be fulfilled once the price of the STI ETF hits your buying price.
Please make sure that you do not accidentally click on sell if you wish to buy as you may accidentally short the stock. Shorting means that you are selling a stock which you do not own and currently, there are penalties imposed by SGX on shorting.
5. After you have submitted your order by clicking 'ok', go to the 'order status' as highlighted by the blue order to check whether your order has been fulfilled. If your order has been fulfilled, it will appear in the 'Order Processed (today)' page under SGX. Otherwise, it will appear in the 'Working Orders' page under SGX.
Please make sure that you do not accidentally click on sell if you wish to buy as you may accidentally short the stock. Shorting means that you are selling a stock which you do not own and currently, there are penalties imposed by SGX on shorting.
5. After you have submitted your order by clicking 'ok', go to the 'order status' as highlighted by the blue order to check whether your order has been fulfilled. If your order has been fulfilled, it will appear in the 'Order Processed (today)' page under SGX. Otherwise, it will appear in the 'Working Orders' page under SGX.
After your order has been processed, do remember to pay for the STI ETF that you have purchased. within 3 days. In other words, the day that you bought the stocks is known as T and you will need to pay for your stocks by T+3. Currently there are 3 ways of paying and they are listed below.
EPS - EPS stands for Electronic Payment for Shares and you can pay for your shares through your designated online banking account by logging in to it. You can opt for this option when you opened your brokerage and CDP account. Do inform the staff at the brokerage about this option when you open your account and you will have to give them your bank account number. Payment will have to be made by T+3 on 9pm.
GIRO - Payment will be automatically deducted 2 market days after due the date i.e. D + 2. Do ensure that there is sufficient funds in your account by D + 1.
Cheques/Cash - Payment is to be received latest T + 3 by 5 p.m.
Once you have paid for the STI ETF that you have bought, you can login to your CDP account here to make sure that the STI ETF is at the CDP. That should be all. If you have any doubts or queries, feel free to leave comments and I will get back to you.
Posts
Just a few points to highlight for the readers to ponder about.
ReplyDelete1) There is no doubt that by buying the STI EFT is probably one of the best ways to invest in the local share market. But please be beware, you are ONLY investing in the local market. The STI might suffer the same fate as Nikkei, reaching a record high but never recovered.
2) The index STI might not collapse but the company holding the STI ETF might... ;P
3) If you have been reading up and believe in indexing, remember that most of these content in books, website and other sources refer to the US market. The US stock market is way bigger. You can't really do indexing with just STI ETF, as compared to VTI.
Nevertheless, IMO, investing in the STI ETF is still the best way to participate the local stock market. Just that you need to be aware of the cons of it.
Hi everyone,
ReplyDeleteWhat will happen to the STI ETF if the company collapses? I've asked many people but nobody can answer this.
Thanks for your informative contribution. Let me try to add on to what you have said.
ReplyDelete1)Nikkei never recovered as the peak was caused by a huge bubble and subsequently, the economy went into a decade long stagflation. If Singapore enters into such a situation, STI may suffer the same fate as Nikkei. However, given the low level of the STI now, the risk of one making a loss on buying equities now is much smaller if one bought at the peak of the market.
2)I have read through the prospectus of the STI ETF. In the event that something happens to the manager of the fund, to the best of my understanding, the trustee will distribute the basket of shares in the fund or cash from the sale of the basket of shares or a combination of both less borrowings and any expenses to the fundholders.
3)DJIA and S&P500 has a much longer history as compared to the STI and I believe their average returns are significantly higher than the STI. It is just that investors will need to consider currency risk too. My posts on the STI ETF are targeted more for those who are new to the stock market and investments and those who wish to play a passive role in investing. Perhaps in time to come, I will blog about the pros and cons of investing in the US ETFs.
You can take a look at the prospectus of the STI ETF in the event that the manager of the fund collapses. It is quite long and dry actually so to summarize, the trustee will distribute the basket of shares in the fund or cash from the sale of the basket of shares or a combination of both less borrowings and any expenses to the fundholders.
ReplyDeleteI am contemplating on writing a post regarding this issue in the near future but because the prospectus is rather long and dry, I am still thinking how should I go about in writing a post that will summarize the risks of the STI ETF.
Kay,
ReplyDeleteI must congratulate you on writing a beautiful article on STI ETF. I have been contemplating investing in this product but did not quite understand it. You explained it clearly, concisely, and in plain English that even Ah Ma's and Ah Pek's can understand.
This is the kind of presentation skills that is needed to educate ppl on financial matters in laymans terms. Great job. I have bookmarked your blog for regular reading. Tks.
Hi VS Lingam,
ReplyDeleteThanks for your encouragement. I hope I have made things clearer for you on the STI ETF (:
Hi would like to check with you regarding the IPO for STI ETF that DBS is offering this month.
ReplyDeleteIs it the same as the StreetTracks?
That is interesting. It's the 1st time I heard of it. Can you provide me with the link ?
ReplyDeletehttp://www.dbsam.com/stietf/Pages/fund_profile.aspx
ReplyDeleteThanks for the link. It should be different from the STI ETF being managed by StreetTracks. I taken a quick glance at the brochure and the STI ETF being issued by DBS will be trading as 'DBS STI ETF 100'. It is being managed by DBS Asset Management and the trustee is HSBC Institutional Trust Service.
ReplyDeleteIn short, there will be two ETFs that will be tracking the STI available on SGX soon.
I noticed one interesting thing though. The trustee of the STI ETF, which is being managed by StreetTracks is DBS Trustee Limited.
Hi,kay,thanks for putting in the effort. I hae a query regarindg the buying and selling of STI ETFs.
ReplyDeleteWOuld that mean that there are only limited numbers of lots in the market. My understanding is that when I buy 1 lot for example, the manager would create that 1 lot, by buying the range of stocks in its portfolio.
Please advise!
Hi chang,
ReplyDeleteTo my understanding, any transactions made are based on the existing number of lots available in the hands of the public. Any creation of lots can only be done through participating dealers and it has to be at least 500 lots.
Kay
I attended a talk organized by POEMS a few months ago, and a chap from the Singapore Exchange claimed that the ETFs (excluding the US ETFs) like Lyxor MUST buy the ETFs that any investor intends to sell.
ReplyDeleteI found it hard to believe and confirmed several times with that speaker ; )
What's your take on this? Anyway, I am a firm believer in index funds or ETFs, especially if the management fee is low, all things being equal. In my opinion, unit trusts are far far inferior compared to ETFs or index funds.
Hi John,
ReplyDeleteI believe that it can be termed it as whether there is a market maker behind the Lyxor ETFs. From what I have found, there is a appointed market maker for Lyxor ETFs. You might want to check out this link;
www.lyxoretf.com.sg/admins/files/lyxoretf/sg/files/324.pdf
As quoted from page 3 under the question "If investors cannot create or redeem directly, how can liquidity be guaranteed",
The answer found for this question is "Market makers or liquidity providers, which are usually large financial institutions such as investment banks or broker dealers, are appointed by ETF managers to facilitate trading and liquidity. Regardless of the trading volume on the exchanges, ETF market makers are obliged to provide liquidity to investors by quoting prices on a real-time basis that are close to ETF NAVs during market opening hours. Societe Generale has been appointed the market maker and OCBC Securities the liquidity provider for all Lyxor ETFs listed in Singapore."
Kay
Thanks Kay, that must be it.
ReplyDeleteI am also interested in buying iShares S&P 500 from the singapore exchange.
Think the bottom may be around by now. Not that I can accurately forecast the bottom ; ).
As my friend puts it, the bottom is only known after it has been reached.
Hi John,
ReplyDeleteAre you referring to the IS S&P500 10US$ being traded on the SGX ? I don't know much about this product actually. It seems to me that this product is indeed listed on the SGX but there is no trading volume or buying and selling price. Is it possible to buy it ?
Indeed, no one knows when is the real bottom. It is hard to catch the bottom. A few months ago, I though the market has bottomed when STI capitulated. Currently, it seems that the low made in November will be breached soon.
Kay
I am trying to find out more about 'sister products' like US S&P 500 index funds and Lyxor funds of the various countries, I think it would be a good idea not only to diversify using an ETF/index fund, but also to diversify across countries.
ReplyDeleteVery few people would expect the recession in Japan to last 10 years in 1990. Who can tell if the American recession would last 5 years or 10 years?
Hi John,
ReplyDeleteI think that's a good idea. However, do bear in mind that not all stock indices will rise in the long run as the stock market is tied to the economy. An good example would be Nikkei 225. The peak made in 1989 is still yet to be breached even after close to two decades.
Indeed, no one can tell how long would this American recession last. Let's hope that the government will undertake strong and appropriate fiscal policies.
Kay
I would like to buy the S&P 500 index, but it seems that i may have to pay a high commission to brokers here. Any advice?
ReplyDeleteHi John,
ReplyDeleteWhich S&P 500 index fund are you referring to ? One that is listed in the US ?
One that is listed in the US would be good. Hopefully there is more liquidity.
ReplyDeleteAm told once that index funds are easy to sell off, as the managing firm MUST liquidate whatever I intends to sell. Is that true?
The liquidity is definitely better as compared to Singapore since the US market is so much bigger. Do bear in mind that there is currency fluctuation risk. If you buy US stocks and ETFs through a local brokerage, you will have to pay a custodian fee too in addition to the brokerage charges so there's a trade off actually.
ReplyDeleteRegarding that index funds are easy to sell off, I'm not that sure whether the managing firm must liquidate whatever you intend to sell.
@John Lee
ReplyDeleteThere is a S&P500 fund that I am dollar averaging every month which is bought from OCBC. You can check the fund facts here
Like what Kay said, it is a good idea to diversify and hold more than just Singapore stocks.
Lemizeraq, thanks!
ReplyDeleteThe good thing about this fund is that it is a feeder fund of vanguard, which is quite a big name, i think.
However, I noticed that the initial fee is 2%, which seems higher than what i would expect from an index fund, which usually charges minimal fees. The annual fee is also not the lowest, being 0.4%. But still, i think it is something i would seriously consider, thanks again.
Have you considered the Lyxor ETFs before? Also, it seems that one can try to register and log into the US stock markets directly, is that true?
Hi John and Lemizeraq,
ReplyDeleteI have thought about whether should one buy the S&P 500 fund listed in the US or the feeder fund locally. Unfortunately, there is no easy answer to this. If you buy into the S&P 500 fund listed in the US, you will have take into consideration currency flutucation risk and the additional fees such as the custodian fees although the good thing is that the management fee is very low which I have mentioned earlier. If you buy the feeder fund, you will not face any of the problems that you will face if you buy into the S&P 500 fund listed in the US but the expense ratio is very high at around 1%.
To add on, I think SGX is trying to promote ETFs so I am actually expecting to see ETFs which tracks US indices being listed here in the near future soon.
This comment has been removed by the author.
ReplyDeleteHi Kay,
ReplyDeleteI chanced upon your website and found your articles on ETF interesting. I'm very new to the stock market and would like to seek your advice on the following issues:
a) Currently, the price to buy STI ETF stands at $1.66 I think, is this the best time to buy? Once bought, I can hold it out for as long as I want? When do I know when to sell them?
b) Recently, there has been a new launch of ETFs by Desuteche Bank or something like that, what is your view on this? Could I seek your expert advice on how do I go about learning more about stock investing, which I am truly very interested in.
Hi Barack,
ReplyDeletea) In my opinion, this would be a good time to buy now since STI is considered to be undervalued. However, you must also be prepared to hold on to it for some time since it is not known when will the market bottom.
Once you have bought it, you can hold it for as long as you want. It is also quite difficult to determine when to sell it. In general, you should sell it when the STI is overvalued. A general way of looking at it is when STI breaches its previous peak.
b) You might want to check out a previous post of mine regarding the ETFs launched by Deutsche Bank @ "http://www.moneytalk.sg/2009/02/deutsche-bank-launching-db-x-trackers.html". It would be good to read investment books for a start to acquire skills such as financial statement analysis. Some books that you might want to read includes The Intelligent Investor by Benjamin Graham and The Five Rules for Successful Stock Investing by Pat Dorsey. I hope this helps.
Kay
kay,
ReplyDeletejust to clarify,
if i am buying STI ETF from CPF, how do i make payment? will it be auto?
Is there any other accunts that i need to open along with a poems account?
what is the min lot i can buy? 1?
sorry, am a little confused here, vigin trade.
jay
Hi Jay,
ReplyDeleteI have not bought stocks before using my CPF so I'm not able to give any advice. You might want to check out this link @ "http://www.poems.com.sg/HelpCentre/faqTrading.asp?value=faq#3". The minimum number of lots you can buy is 1.
Kay
Hi Kay,
ReplyDeleteThanks for the info. I truly appreciate it.
Looking forward to seeing more of your articles in the near future.
Hi Barack,
ReplyDeleteI'm glad to be of some help to you.
Kay
Hi Kay,
ReplyDeleteIn your opinion, what do you think of those websites that purportedly try to sell you their innovative trading systems, which they claimed took them centuries to build? Are they authentic? If such system can earn big bucks for them, why are they offering to members of public for a mere wager to use their system? What is your advice on this?
Hi Barack,
ReplyDeleteCoincidentally, I am planning to blog on this issue soon. I have not tried any of these system personally so I can't tell you whether they work. One thing is assured though; the creator of these systems will earn money regardless of whether these systems will work or not due to the sales of such systems.
I think your answer is as good as mine. If the system can indeed be so profitable, they would have retire long ago and not offer it to the public. Well, some might say that they have a passion or wish to aid the public in investing but it seems to me that this passion that seems to come with a high price tag.
If you ask me, I am definitely skeptical of such system. However, I'm in no position to judge since I have not use trading system before personally.
Kay
Any idea what are the mgt fees, transaction fees etc... associated with purchase of STI ETF?
ReplyDeleteAnd is there a 'break even' no. of shares a person should purchase in order based on this 'purchase-associated' fees?
This comment has been removed by the author.
ReplyDeleteHi chris,
ReplyDeleteThe management fees for STI ETF is 0.3% currently. If you wish to purchase the STI ETF, you will have to pay brokerage charges since you will have to buy it through a brokerage. The brokerage charges is around 0.28% or a minimum of $25 generally, depending on which brokerage.
Due to this brokerage charge, it would be good to purchase an amount of around $9000 for each transaction since a minimum of $25 or 0.28% will be charged. For a contract value of $9000, the brokerage charge is around 0.28% * $9000 = $25.20. Otherwise, if you purchase a smaller amount, the brokerage charge will constitute a large percentage of the contract value that you are buying.
Kay
Thanks Kay. That's very helpful information.
ReplyDeleteHi Kay,
ReplyDeleteThanks for your excellent writeup on ETF.
Is there any way one can purchase STI ETF on a monthly basis (say using $200/month)?
In units trusts, it is called a regular saving plan.
Hi,
ReplyDeleteThanks for your compliment. Unfortunately, there is no equivalent of an RSP for the STI ETF itself. What you can do is to participate in the Philips Share Builder Plan which is rather similar to a RSP. You can see the article that I wrote regarding this @ http://www.moneytalk.sg/2008/12/philips-sbp.html
It is rather similar to a RSP but the charges are quite high so it's up to your discretion on whether it is beneficial to participate in it. Otherwise, you can save up to a few thousands dollars before buying the STI ETF and continue to do this regularly.
hmm perhaps now it is a good time to buy? STI etf is rising quite fast.. at 2.11 now.
ReplyDeleteKelvin
Hi Kelvin,
ReplyDeleteIt's still a good time to buy the STI ETF. At the current price, the STI is still some way off the previous peak at around 3900.
I would suggest that maybe you can try to buy it based on the reason that it is still undervalued rather the rapid price movement for the past few days.
Kay
This comment has been removed by a blog administrator.
ReplyDeleteHi kay, I have an interest in investing in ETFs. However, I don't know what factors make ETFs a safe and stable investment. How do you go about selecting which ETFs (ie. company managing the fund). What are the things we should look out for when reading the fund prospectus and annual reports, and what are the other factors we should note.
ReplyDeleteThank you.
Hi Don,
ReplyDeleteI don't actually select ETFs based on which companies are managing them. My selection criteria is mainly based on the objective of the ETFs thus I mainly choose ETFs which track stock indices that has the odds of trending up based on historical data. After that, it will be good to see if the ETFs which you have chosen has a good liquidity.
With regards to the prospectus, you should look at the type of events that will trigger the liquidation of the ETF and the subsequent actions that will be taken by the fund manager or trustee upon liquidation. It will be good to read the entire prospectus line by line carefully but those are the two items which I will tend to place a greater emphasis on. As for the annual reports, I will look at it line by line too and see if any items look suspicious to me. I hope this helps.
Kay
Thankds Kay, it helps lots.
ReplyDeleteWhat are the differences between STI ETF and DBS STI ETF 100? Which one to choose to invest?
ReplyDeleteHi,
ReplyDeleteYou may wish to take a look at this post on my site instead @ http://www.moneytalk.sg/2009/02/dbs-issuing-sti-etf.html
any takers to still enter STI ETF now?
ReplyDeletehttp://forex-all-online.blogspot.com/
Hi, How do i receive my dividend and how to i pay for Annual Management Fee.
ReplyDeleteHi,
ReplyDeleteThe dividends will be deposited to a designated account specified by you in your particulars under the CDP account. Otherwise, CDP will send a cheque to the address listed in your CDP account.
The management fees is deducted from the dividends received from the companies in the fund so we don't really have to pay the fees.
Kay
I am concerned about the "Lot Size" in the POEMS. In regard in step 4 image, does it mean 1 lot is 1000 shares? Or I am buying 1000 lots?
ReplyDeleteIs the cost (excluding all the fees) calculated by the (buying price * no of Shares)?
Hi YQ,
ReplyDeleteWith regards to that image, 1 lot is equal to 1000 shares indeed. Thus if you key in 1000, you will be buying 1000 shares which is 1 lot. Some counters have different lot size such as the SBS Transit 500, where 1 lot is equal to 500 shares so do take note of this.
Yes, the cost is calculated by the buying price * number of shares and this excludes any fees payable.
Kay
Hi,
ReplyDeleteThanks for an excellent treatment of the issues involved in buying the STI ETF.
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, as other readers of the blog have noted, 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 other readers have managed to construct a portfolio low-cost (less than 1% Expense ratio), passively managed index funds that track global market indices, investing from Singapore?
I'm actually a Singaporean based in the US for the moment, and am debating about whether to invest my money in Vanguard funds (great choice, low charges but 30% capital gains tax), or to shift my money back to SG.
In the long term, I will be based in Singapore. I'm wondering though, if I should still continue to channel money to the US to take advantage of the choices of funds available but am also concerned about currency risks.
Appreciate anyone's thoughts on these questions!
Hi SigiL,
ReplyDeleteThanks for your compliment. It is true that the Singapore market is insignificant with regards to the global market. The main advantage of the STI ETF, besides the usual advantages of ETFs, is that it will not expose local investors to currency risk.
If you really wish to be truly diversified, you can consider index funds or ETFs that track the MSCI World Index since it is a collection of stocks of the developed economies in the world.
With regards to your situation, it is rather complicated actually so I hope more readers can contribute their ideas. If you are earning USD currently, you should use it to purchase in the US markets directly to lower transactional costs and avoid currency risk for the time being. Thus, when you are back in Singapore, you can liquidate your investments made in USD if the circumstances and the currency rate are favorable. Otherwise, if you are still earning SGD, it would be better to buy in the Singapore market.
Kay
Hi Kay,
ReplyDeleteIs it possible to short the STI ETF?
Hi,
ReplyDeleteIt is possible to short the STI ETF if you are referring to naked shorting as it is like any other counter listed on SGX.
Kay
Hi,
ReplyDeleteHave you guy received your STI ETF dividen on your POEMS Share Builder Plan, it was distributed on 11 Aug. I have not seen mine in SBP account. I think it supposed to be shown in SBP account on 13 Aug and be in time to reinvest the dividen on 18 Aug. Please check yours.
Hi,
ReplyDeleteYou can check with Mike from http://sti-stocksinfo.blogspot.com/
From what I know, he is using the Philips Share Builder Plan.
Kay
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ReplyDeleteHi Kay,
ReplyDeleteRecently, I did a check. The yield on investing in STI ETF is only 2%, barely able to cover inflation.So, is it still good to invest in the sti etf? Pls advise. I am confused as to whether STI ETF is good for a divisification tool or whether it is worth making our money work harder?
Thank you
Regards
Phyllis
Hi Phyllis,
ReplyDeleteIf you buy the STI ETF at a high price, you will find that the dividend yield will be low and vice versa. But do remember that the potential gains consist of not only the dividends but the potential capital gains from the price appreciation over time. Take note that if you buy at a higher price, the potential for capital gain will be lower so you will have to judge for yourself whether the price are suitable enough to justify a purchase.
Kay
With reference to whether nor not to buy STI ETF, I would like to bring to your attention that the last bull end 3907 on a high note.
ReplyDeleteNow bull has yet to approach for i am quite optimistic that it will break the all time high.
Thank you.
rgds,
Yeo
Yeo,
ReplyDeleteI make no attempt to predict how the market would turn. The one rule I have is that I buy when it is cheap and vice versa.
Kay
hey kay,
ReplyDeletei just saw your articles. the article and comments are wonderful. it gave me more insight.
I am new to investing.i have abt 10k spare cash to invest. i wonder if now is still a good time to buy the STI ETF? cosidering the value is quite high already.
else, do you have any other suggestions on what do i do with the money?
thanks so much!
Hi,
ReplyDeleteYou can take a look at my reply to Norvin, who is also asking the same question as you here @http://www.moneytalk.sg/2008/11/contact-me.html?showComment=1294664181213#c3676914074845922985
Kay
Dear Kay,
ReplyDeleteI gained a lot of information from your articles, thank you very much.
I hope you can share some of your knowledge with me on some issues. I am interested in buying the STI ETF and plan to invest about $1000 a month. Should I do it via the POEMS sharebuilder plan or via POEMS Unit Share Market? My analysis is:
Sharebuilder Plan:
Pros:
Lower commission of $6.42
Automatic RSP by POEMS.
Cons:
Shares held by Phillip Securities (?risk of default)
Uninvested amounts are rolled over to the next month - so my investment amount may exceed $1000 in a month, triggering a higher commission of $10.
Unit Share Market:
Pros:
Shares under my own CDP
Cons:
Unsure if there is liquidity in the Unit Share market, and if the asking price is higher?
Higher commission of $10 by POEMS.
Also, if I invest via the Unit Share market, would it be better to buy the Streetracks ETF than DBS STI ETF? Because the former has a larger board lot size of 1000, so my $1000 will not be traded on the Ready Market (where POEMS' charge is minimum commission of $25). If I buy DBS STI ETF with lot size of 100, POEMs will buy via the Ready market and charge $25instead of $10.
Thank you.
Hi Harry,
ReplyDeleteI would buy the DBS STI ETF 100 directly on SGX every month instead. But this is assuming that you have the discipline to do the purchase yourself regardless of any turmoil in the market. 1 lot is only around $300 plus currently. This method will avoid all the cons of the plans that you mentioned.
Kay
Hi Kay,
ReplyDeleteThank you for your advice!
Harry
Hi,
ReplyDeleteforgive me for my newb questions. correct me if i'm wrong!
regarding the commenet to harry above, isn't buying DBS STI ETF every month gonna incur $25 commission charge every time? wouldn't it be better off buying via sharebuilder plan?
Thanks!
Hi Bernard,
ReplyDeleteIt depends on the amount that you are buying. For the sharebuilder plan, there are many administrative charges so if the amount that you are buying is small, these charges will consist of a significant portion of your capital. See http://www.moneytalk.sg/2008/12/philips-sbp.html
Kay
Hi Kay,
ReplyDeleteThank you for your articles on STI ETF. Read all of them and all the comments with your added wisdom. So insightful!
Great blog on money/investing! Made me more aware!
Keep it up!
Mary Ann
Deeply insightful!
ReplyDeleteSEO Services
Hi Kay,
ReplyDeleteI've only chanced upon your blog post now and hopefully any new comments on this particular blog post can still prompt you to see the comments..
i'm newbie here. I've read and understand the need to have diversification in portfolio but i don't think i can manage so many different types of investment instruments at a start so i'm wondering if i could just buy STI ETF solely first and observe its performance? I am okay to put it there for as long as possible and will only think of selling or buying more when I am more familiar with trading.
thanks. look forward to any opinion that you may have for me.