MNet,

<<Why these "since inception" return is different?>>

1) Because those ETF may be started long ago... "since inception" means since the creation of this ETF..

<< Supposingly the iShares U.S. Healthcare Providers ETF will yield more higher % compare to Vanguard FTSE All-World ex-US Small-Cap ETF ?>>

2) <<The performance data shown represent past performance, which is not a guarantee of future results.>>

That is past performance. It is not an indication of the future. If you KNOW which ETF will do THE BEST in future, you will be RICH.

Dreamer

Dreamer, any thoughts on Singapore STI ETF? It helps reduce local exposure and gives better regional/foreign exposure based on Singapore blue chip companies.
http://www.nikkoam.com.sg/etf/sti

With a standard chartered trading account, there are no minimum commission and brokerage fee of 0.2%.
It is more accessible with required investment amount of only SGD300~ per lot..

why select SG?

soven,

I do not know enough to advice you.

Dreamer

When I sell my ETF, who will purchase my ETF? ETF provider or buyer from open market?

jutamind,

ETF behave exactly like a stock. Hence, it should be buyer from open market.

Dreamer

This post has been edited by dreamer101: Aug 31 2014, 12:04 AM

SGX will cut board lot size to 100 next year :

http://news.asiaone.com/news/business/sgx-...an-19-next-year

I'm looking at SGX listed ETFs, purely because there's no withholding tax on dividends

US stock can buy 1 share beb

Not on all exchanges


This post has been edited by wodenus: Aug 31 2014, 10:58 AM

dreamer101,

Hope you don't mind me asking you a question.

Assuming an investor has USD100k to spare (i.e. capital preservation is not a priority), should he not focus on buying index funds of mainly companies that are relatively small and have high book to market value and not buy bonds at all nor the wider equity market?

I say this because -

1) Historically speaking, the risk premium of shares (over risk free treasury bills) is circa 7% whilst the risk premium for bonds is only 1.4%.

If the said investor can stomach the volatility of investing 100% equities, why bother with bonds? Is the risk adjusted return for a 80/20 (80 being equity and 20 being bonds) portfolio better than a 100 equity only portfolio?

Assuming I don't panic sell my 100 equity portfolio in a stock market crash, would my long term risk adjusted return be lower than a 80/20 portfolio? If yes, have this been proven before?

2) Fama and French in their 1995 article - "Size and Book to Market Factors in Earnings and return" have found that shares of smaller companies and those with high book to value ratio have provided above average return compared to the wider market.

Applying their findings (if still true today, which one can doubt since they is no free lunch in the financial markets), would one again not be better off by investing in index funds focusing on these companies and not the wider equity market?


Knowing a little could be dangerous when investing (talking about myself here haha), hence I would like to have your learned opinion on the above.

As you can probably guess, I have not invested in an index fund yet but rather in certain individual UK small caps.
I suspect in the long term index investing would probably turn out to be a wiser choice!

Thanks

SalvationArmy,

http://www.investopedia.com/terms/e/efficientfrontier.asp

http://www.etf.com/sections/index-investor...-portfolio.html

1) Google "Efficient Frontier" and Google "Larry Portfolio".

2) 100% Stock give you higher EXPECTED RETURN but EXPECTATION does not have to meet reality.

3) Normally recommendation is between 70/30 to 30/70 ratio.

4) Let me give you a very simplified version of the reason.

For example, if you do 100% stock, if the stock market crashes, you have NO MONEY to buy cheap stock. If you are are 70/30, you can sell bond to buy stock. Hence, you "SELL HIGH and BUY LOW". And, vice versa. If you look at the efficient frontier curve, it does not make sense to go either 100% bond or 100% stock. Historically, the difference is very small comparing those 100% portfolio versus 70/30 or 30/70. But, on the average, for the range of 70/30 to 30/70, you are less likely to have any very bad year.

5) Larry's rule say that you should EXPECT lose up to 50% of your stock allocation at any point of time.

<<As you can probably guess, I have not invested in an index fund yet but rather in certain individual UK small caps. >>

6) I may GAMBLE to a few thousand on those kind of stock. But, I only do that for stock that can return between 1,000% to 3,000%. Aka, 10X to 30X. Or else, why bother?? So, are you targeting for that kind of return?

Dreamer

This post has been edited by dreamer101: Aug 31 2014, 11:29 PM

Point 4 is quite insightful.

I suppose it is worth quite a lot being able to sell down your holdings of bonds to fund purchases in equities during a stock market crash. However, this can be achieved also by selling down your equities and keeping significant amount in cash as the market goes up to unrealistic levels.

Easier said than done I suppose (it is unclear how do we identify market peak) whereas the stock-bond allocation method will make it automatic!

This post has been edited by SalvationArmy: Sep 1 2014, 12:39 AM

So yeah, when I'm tired of doing my own investing (I get far too much joy from it at the moment), I shall be selling all my shares and buying Vanguard ETFs.

SalvationArmy,

Why keep cash?? If stock went up, bond will be on sale. Hence, you sell stock (High) and buy Bond (low). It happened in reverse too, when stock goes down.

The easiest way is to buy a balanced fund. In that case, it always do that for you automatically. Depending on where you are, you might be able to invest on one of those Vanguard balance fund.

Dreamer

Over here ROI from cash > ROI from bonds right now that's why.

This post has been edited by wodenus: Sep 1 2014, 04:37 PM

You mean CMF from Malaysia can be in par with Malaysian bonds?

FSM CMF now 3.2, how many bonds are going to achieve that for the same amount of risk (which is almost absolutely no risk in the case of CMF lol )

well, still 100% equity in terms of asset..
Not sure about bonds, do bonds pay 5% averagely?

Depends.. in good years maybe 6%, in bad years, 1.8% or so