Welcome Guest ( Log In | Register )

Outline · [ Standard ] · Linear+

> Asset Allocation Investing using US ETF, Basic approach to asset Allocation ETF

views
     
wodenus
post Jun 18 2014, 11:47 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(kaiserwulf @ Jun 11 2014, 04:08 PM)
Holding fee is something the brokerage charge for using their nominee account in the US to hold your US stocks, some broker call it custody charge... my broker quote me 2 sgd per counter per month, what's urs? It may affect your real rate of return if you hold small positions over long time...
*
AFAIK local accounts have no holding fees.. just like local mutual funds have no platform fees smile.gif

wodenus
post Jun 23 2014, 09:55 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
Comparison of VOO (Vanguard S&P 500 ETF), VT (Vanguard Total World Stock ETF) and KUTNETF (Kenanga Growth Fund) :

Attached Image

Also, IINM, VOO's price per share is now $180.44 (about Rm580 per share.) Board lot is 100 shares, so to buy into VOO now you will need $18,044 (Rm58,093).

VT's price per share is now $62.73 (about Rm201.96). So to buy into VT now, you need at least $6,273 (Rm20,196).

The question is now whether you can afford to lose Rm58K, or Rm20K if Vanguard implodes. This is very unlikely, but then no one would have guessed Lehman Bros. would file either.

Also, if you want to DCA/VCA this, you will have to put in 58K, or 20K each time.

Please correct me if I am wrong.

Also, now that we have Aberdeen's Islamic World Fund, we have a way of mitigating single-country risk.. so I'm not sure what advantage VT would have over them in Malaysia.


This post has been edited by wodenus: Jun 23 2014, 10:06 PM
wodenus
post Jun 23 2014, 10:33 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(dreamer101 @ Jun 23 2014, 10:28 PM)
wodenus,

You are WRONG!!!

1) There is no lot size with US ETF.  You can buy as little as one share.  So, the minimum for VOO is USD $180.44 and VT is USD $62.73..

2) You either trade for free or pay USD $10 per trade.  Normally recommended to buy around USD $1,000 per trade.

3) No sales charges of 5% to 7% like Malaysia UT..

4) Annual fee of less than 1% for both ETF..

<< This is very unlikely, but then no one  would have guessed Lehman Bros. would file either.>>

5) This is a STUPID statement.  VT invest on all 4,000 largest public listed companies in the WHOLE WORLD.  If VT crash, the WHOLE WORLD is going to hell.

<<Aberdeen's Islamic World Fund>>

6) Why would somebody want to pay more to get less??

    A) 5% to 7% upfront sales charge versus USD $10 per trade

    B) 1% to 3% annual maintenance fee versus less than 1%

    C) 4,000 largest public listed companies around the world versus how many in that UT??

Dreamer
*
Thank you so much smile.gif actually sales charge is around 0-2% here now, things have changed, but yea I can see how that might actually be a good idea smile.gif

But wait..

Attached Image

A) 2% sales charge. Lowest minimum brokerage here is $30 per trade. Would be interesting to find a low-cost US broker in this country smile.gif

B) If their expenses are so much lower, why aren't they doing any better?

C) This presumably is from their marketing material, unless you have the full list of their 4000 holdings, so nothing said about that.


This post has been edited by wodenus: Jun 23 2014, 10:55 PM
wodenus
post Jun 23 2014, 11:48 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE
Nothing is stopping you from opening an account with a US broker, they don't have to be based in Malaysia ...


Fair enough, can you suggest a good low-cost US broker that will allow a Malaysian resident to open an account? Schwab wants Rm30K initial funding.

QUOTE
I don't really understand this question - how do you define "better"?


Given VT's low management fees, you'd expect them to have much better performance than AWF.. but as the chart (above) shows, performance is about the same. What does the low management fees translate to, in terms of unitholder benefits?

This post has been edited by wodenus: Jun 23 2014, 11:52 PM
wodenus
post Jun 24 2014, 12:03 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(dreamer101 @ Jun 23 2014, 11:54 PM)
A) AWF's chart is based on amount invested less the front load (sales charge).  That means AWF's performance  is 1% to 2% lower than the chart shown.


Attached Image

This is a straightforward growth chart.. I got it off Bloomberg. Both have pretty much the same growth, as you can see. Given that VT's expenses are much lower, why is the performance comparable? why isn't VT's climb much steeper than AWFs? if the fees are so much lower, all other things being equal the VT chart should have a steeper gradient.. but it doesn't.

So where does the money go?



This post has been edited by wodenus: Jun 24 2014, 12:11 AM
wodenus
post Jun 24 2014, 12:06 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(rjb123 @ Jun 23 2014, 11:54 PM)
Hmm I see, I was under the impression we can get the 15% back from what I read - need to double check.
Benefits to unit holder - less annual fees?

They can have less fees, as much larger in terms of total assets
*
Basically, what you are saying is this, one fund manager charges $250.. but you get 5% growth after expenses. The other fund manager charges $3, but you get 5% growth after expenses. What exactly is the difference to you what they charge?
wodenus
post Jun 24 2014, 12:09 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(X.E.D @ Jun 24 2014, 12:04 AM)
30k is on the low side man. ETrade wants 75k ringgit.  laugh.gif


Exactly my point, it makes sense if you are in the US. But unless someone can recommend a reputable low-cost US broker that doesn't demand a ridiculous amount of money just to open an account, we're stuck with a $30 minimum brokerage smile.gif

QUOTE(X.E.D @ Jun 24 2014, 12:04 AM)
I believe that happens to your active income taxation if you declare yourself either a US resident or a low-bracket income-earner ("Green Card Hax") but dividends going under passive/FDAP income, don't seem to trigger any mention of exemption.


Then you would just be lying to the government? tongue.gif

This post has been edited by wodenus: Jun 24 2014, 12:13 AM
wodenus
post Jun 24 2014, 12:13 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(X.E.D @ Jun 24 2014, 12:04 AM)
Actually it's only a $500USD minimum to open there. But trades aren't cheap at $10 a notch.


How reputable is Etrade?

wodenus
post Jun 24 2014, 12:15 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(rjb123 @ Jun 24 2014, 12:12 AM)
Depends what you call a ridiculous amount of money - less than $10K isn't really worth it after paying bank charges

Currently 30% max withholding, apparently at the end of the year you can file a 1040NR form to get half of that 30% back.
*
Fantastic.. so if I do DCA/VCA I have to put in $10K a shot.. otherwise it'd not be worth it? and on top of that I have to file a form to get 15% taxed from the dividend, otherwise it's 30%?
wodenus
post Jun 24 2014, 12:23 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(X.E.D @ Jun 24 2014, 12:16 AM)
I wouldn't say 30k's a lot of money- it is Ringgit after all :V
Okay lah, say 1-2 years savings for average joe. If you can't leverage the economies of scale yet, put it in a local UT then... the management fee rape isn't too obvious in a short timescale, but the front load is.


Ha if I had a few million ringgit lying around, I'd buy property.. smile.gif

QUOTE
For me I see the case there tho. Putting in six digits in a three/four fund allocation, set it and forget it, and enjoy no front load + minimal management costs.


Maybe in the US now that the property market there is pretty much dead. But here.. high-end property is dead cheap smile.gif

QUOTE
Oh and you can only declare residency if you fulfill certain eccentric conditions. Certainly not lying. And doesn't help the 30% dividend case here. Most countries with US tax treaties are ones that tax their citizens worse- hence the gov stepping in to prevent dual taxation.


Now I'm curious, what if you had money in a brokerage account, that you used to buy into a mutual fund, but then the brokerage goes under, what happens to the amount in the brokerage account, and the amount in the fund?


wodenus
post Jun 24 2014, 12:24 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(dreamer101 @ Jun 24 2014, 12:22 AM)
So it is, but it does not seem to translate to noticeably better returns.
wodenus
post Jun 24 2014, 12:35 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(rjb123 @ Jun 24 2014, 12:31 AM)
The excess funds parked in the brokerage are in my case insured by FDIC (www.fdic.gov)


Sure in your case it is. But if you are not a citizen, all your funds are gone right?

QUOTE(rjb123 @ Jun 24 2014, 12:31 AM)
The fund is just held in that brokerage, if it was to go under and taken over by a new brokerage it'd get moved to there I imagine. Only if every company that fund holds was to go bankrupt your money would be gone !


Any idea what happened in Lehman Bros. case? especially to their foreign accounts?


wodenus
post Jun 24 2014, 11:21 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(dreamer101 @ Jun 24 2014, 12:47 AM)
wodenus,

The money is held in TRUST independent of whether the person is a citizen or not.

It is THE SAME as your stock is held in CDS A/C in Malaysia.  Your broker do not own those stock in your CDS A/C.  You do.

Whatever your question is.  It applies THE SAME in Malaysia.  The ONLY DIFFERENCE is USA has the larger scale and better transparency.

Dreamer
*
Okay but what about the cash balance held in the account? and the wire transfer fees... $25 eep. There's no other way to transfer it other than wire?

Anyway the point is, it gets messy.. the only one seems to be Etrade. And etrade is like :

http://www.consumeraffairs.com/finance/etrade.html

Depositing costs : Rm10 for the wire, Rm30+ for commission, then if the money is somehow not credited, have to deal with Singapore and people who might just decide to ignore your emails, and then what, you'd have to go to Singapore to sort it out? Withdrawals not processed, account deducted but doesn't show up in bank, how would you settle this if you are all the way over here?

Ok, now suppose this : You are in Malaysia and you open an account with a US brokerage. You place say $50,000 in it, maybe use $40,000 to trade.

Scenario 1 : One month later $5000 is missing from the account. What can you do?

Scenario 2 : Your account is locked for "suspicious activity." What can you do?

Scenario 3 : You pass on and there is say $1mil in the account. How would you get it out?

Scenario 4 : It is taken from your account, but it does not show up at the local bank. US brokerage ignores you, or tells you it's already been transferred. If this was a local brokerage, we'd have hit the tribunal, and then the newspapers, and then the securities commission.. and then we'd have the money lol smile.gif but if it was a US brokerage, and they ignore you.. then what?

wodenus
post Jun 24 2014, 03:52 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(rjb123 @ Jun 24 2014, 02:01 PM)
Cash balances are protected by FDIC/SIPC. Afaik you can deposit via bank draft but is a lot slower - considering the lower purchase and sales charges the wire fee isn't really a big deal (unless you're depositing small amounts where the wire charge is a significant percentage)

I'm not too sure why you're coming up with all these scenarios - in this day and age it's extremely rare for wire transfers or funds just to suddenly disappear and go missing, either they're credited to the destination account or returned / rejected if there's an issue with the payment. I do multiple wire transfers around the world every single week for business, never had a single payment just go "missing"

Scenario 1 : Why would $5000 just go missing? Doesn't make sense. All these brokers are regulated by authorities in their respective countries - they can't just make your money disappear and ignore your e-mails / contact.

Scenario 2 : Why would the account be locked for "suspicious activity"? If something like this does occur (most likely due to attempted unauthorised access II guess) it'd just be a case of supplying a few documents.

Scenario 3 : Same as with other banks, just need to ensure your next of kin etc. has the relevant details

Scenario 4 : As per first point above, these brokers are regulated in their countries - money doesn't just disappear.

I'm not sure what point you're trying to make here - just because a bank/broker is in another country doesn't mean it isn't safe and money doesn't just go missing!
*
Sorry, but have you actually read the link? if I had the same problems those people had, what recourse would I have had? you're right it doesn't make sense, but then read the link.

QUOTE
What incompetence. I can't believe the FCC lets them run at all. First week, they "lost" $5,000 of mine through a "journaling" error. The next week, I received a confirmation on Saturday for trades that went through on Friday. Now, they have a "security freeze" on my account so I cannot access my money. Outrageous. Incompetent. Unprofessional. I will get my money out of there as soon as possible.


QUOTE
Lost access on my account - For no apparent reasons, my account was locked. I called them and despite the fact that I gave my SS number, date of birth and current address, they did not unlock my account. Not to mention that I spent a couple of hours on the phone answering ridiculous questions. I will be withdrawing my money from eTrade ASAP. After reading reviews on the internet, I realized a lot of people are having the same problem. This may be an indication that eTrade is having financial difficulties, so it has to freeze accounts to stay afloat. I think eTrade soon will be going out of business. My advice - stay away from eTrade.


From http://www.consumeraffairs.com/finance/etrade.html

Also you have a lot of faith in regulation :

QUOTE
The U.S. futures regulator acknowledged on Tuesday the regulatory system had failed to protect the customers of Peregrine Financial Group, which collapsed last week as its founder admitted to a fraud of more than US$100-million that spanned two decades.


from http://business.financialpost.com/2012/07/...t-of-peregrine/

So yea. what if this happens? what can I do from all the way over here?

wodenus
post Aug 31 2014, 12:10 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(soven @ Aug 30 2014, 12:48 PM)
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..
*
SGX will cut board lot size to 100 next year :

http://news.asiaone.com/news/business/sgx-...an-19-next-year
wodenus
post Aug 31 2014, 10:57 AM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(MNet @ Aug 31 2014, 09:58 AM)
US stock can buy 1 share beb
*
Not on all exchanges smile.gif


This post has been edited by wodenus: Aug 31 2014, 10:58 AM
wodenus
post Sep 1 2014, 04:37 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(dreamer101 @ Sep 1 2014, 01:33 AM)
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.


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
wodenus
post Sep 1 2014, 04:41 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(woonsc @ Sep 1 2014, 04:39 PM)
rclxub.gif  rclxub.gif
You mean CMF from Malaysia can be in par with Malaysian bonds?  drool.gif
*
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 smile.gif )


wodenus
post Sep 1 2014, 04:46 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(woonsc @ Sep 1 2014, 04:42 PM)
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 tongue.gif

wodenus
post Sep 1 2014, 08:15 PM

Tree Octopus
********
All Stars
14,989 posts

Joined: Jan 2003
QUOTE(oneeleven @ Sep 1 2014, 06:28 PM)
I asked. There may be taxation restrictions for foreigners, meaning, may be not allowed.
*
That's weird.. you can buy Singapore equities, but you can't buy Singapore ETFs?


2 Pages  1 2 >Top
 

Switch to:
| Lo-Fi Version
0.0609sec    0.83    7 queries    GZIP Disabled
Time is now: 12th December 2019 - 05:53 AM