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 All about ETFs / Foreign Brokers, Exchange traded funds

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shakiraa
post Jan 4 2021, 10:31 PM

hips dont lie
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US ETF Questions

Hi all Sifus - noob here, would like to start invest in US ETF, upon some quick research, i have found the below but i have some questions that i cant really find a quick answer from the web.

S&P 500: VOO vs SPY, which one is better and what's the difference? i guess is just managed by 2 different company? just our choice based on management fee?

NASDAQ 100: QQQ, what's the difference compare to S&P 500 above? my guess is NASDAQ 100 is just less company, 100 vs the 500 above?

Based on the above, which one do you guys recommend?

thanks so much!

This post has been edited by shakiraa: Jan 4 2021, 10:33 PM
shakiraa
post Jan 5 2021, 09:12 PM

hips dont lie
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Senior Member
785 posts

Joined: Mar 2007
From: Kuala Lumpur
QUOTE(Yggdrasil @ Jan 5 2021, 11:50 AM)
VOO is managed by Vanguard. SPY is managed by SPDR.
People recommend Vanguard because fee is lower.
Both attempt to track S&P 500 index.

NASDAQ and S&P use different criteria to rank their top companies.
NASDAQ 100 has 100 companies while S&P 500 has 500.
Hence, NASDAQ 100 is less diversified.

NASDAQ 100 does not have any financial stocks while S&P 500 does.
You won't find any banking stocks in NASDAQ 100.
NASDAQ 100 is also tech focused.
If tech goes bust like Dot-com Bubble, might take years to recover.

QQQ is managed by Invesco.
It attempts to track NASDAQ 100.
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Thanks so much for your insights.

shakiraa
post Jan 5 2021, 09:13 PM

hips dont lie
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Senior Member
785 posts

Joined: Mar 2007
From: Kuala Lumpur
QUOTE(Ramjade @ Jan 5 2021, 08:52 PM)
None. Pick the most bang for buck etf. You want your money to be working hard for you.

For that I only recommend Ark funds.
No need to know about other etf. Just buy ark etf enough.
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Yup part of my plan as well, ark etf and either S&P or NASDAQ etf, doing research on clean energy etf as well.
shakiraa
post Jan 19 2021, 10:30 PM

hips dont lie
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785 posts

Joined: Mar 2007
From: Kuala Lumpur
QUOTE(TOS @ Jan 8 2021, 10:22 PM)
Indeed. Ramjade's point is just for reference. You need to know your risk profile well. He is taking more risk than others now, going into margin some more. laugh.gif

Decent blue chips with low volatility like S-Banks or S-REITs (their indices as well) or just S&P 500 give you good risk-adjusted returns too.

Only you know your expectations well. Others can only provide advice at the side.
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Hi - S-Reits means Singapore reits? I do some checking, there’s only one ETF tracking S-Reits which is by lion Phillip, is that a good choice for mid term? Thanks
shakiraa
post Jan 25 2021, 06:55 PM

hips dont lie
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Joined: Mar 2007
From: Kuala Lumpur
QUOTE(TOS @ Jan 19 2021, 11:33 PM)
Yup, S-REITS are Singapore REITS. I checked on SGX ETF screener and also come to the same conclusion with you, only one ETF tracking S-REITs by Phillip.

I am aware that you have been asking SREITs-related questions in the SGX counter and SREIT thread, not sure if you missed my reply in the SREIT thread to your question.

I have replied you below:

https://forum.lowyat.net/index.php?showtopi...post&p=99611743

As for your question, ETF is basically a tracker of a basket of stocks, in this case, REITs. Judging from the REIT sector as a whole, in low interest rate era, most income-seeking investors will use REITs to substitute their bond holdings in their portfolio, more so given that bonds have large denominations that are out of reach to most retail investors.

However, you also have the option of buying the individual REITs yourself, instead of being bounded by the index. The main reason is that some investors prefer to invest in more mature and stable blue chip REITs rather than having a stake, albeit small, in those small REITs in the index.

Small REITs are less liquid and they may not have strong sponsors (there are exceptions). High leverage can also be of concern. But with the high risk you bear, you can earn higher returns compared to the mature solid blue chips. Corporate governance is a new issue with small REITs recently, exemplified by the doomed ESR-Sabana REIT merger and the Lippo Trust's issue. 

So, if you don't want to have exposure in not so mature REITs, you can buy individual REITs yourself, on the other hand if you just want to follow an index and opt for passive investing, the Phillip ETF is one way to go. The index which the ETF tracks is already heavily tilted towards blue-chip REITs whereas those small REITs account for very little portion of the total NAV. S-REITs are quite oligopolistic, in some sense.

At the other end of the scale, some investors actually like heavy exposure in small REITs and small stakes in mature large-caps to smoothen their portfolio. In this case, the ETF won't suite your needs as what you want is the exact opposite of what the index consists of (heavy in blue chips, light on small-caps). In this case, you have to manually purchase the REITs and build up your own "manual ETF" yourself.

In the end, it all depends on your risk profile and your preference. I have mentioned some further thoughts in S-REITs in my reply to your post in the S-REITs thread (see link above).
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thanks so much, great info, your kindness is much appreciated!


 

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