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Singaporeans Investing Cheaply with Exchange Traded Index Funds


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Singaporeans Investing Cheaply with Exchange Traded Index Funds

Today I was told a heart-breaking story by a Singaporean woman I work with.  After showing me her investment account, I noticed that her broker had invested her $1.1 million U.S. portfolio in a messy combination of mostly Chinese stocks.

The account is currently worth slightly more than $400,000.

She saved well, and she got burned by a broker who cost her half a million U.S. dollars.  Let’s hope karma laces his underwear with Tiger Balm.

Less hazardous than buying individual stocks (like this broker did) is buying unit trusts instead.  But in this series,  I’ve described how index fund investing provides the highest likelihood of success, compared to investing with unit trusts.  And you’ll likely do far better building a simple, diversified portfolio of index funds, than by using the resources of a “Cowboy Broker” who could make you feel as if you’ve been tossed from a horse.

 Index funds are a lot cheaper than unit trusts.  Sure, you can find unit trusts that have done really well in the past, but unfortunately, these products get promoted by salespeople as great, future investments, and they usually go on to disappoint new investors from that point forward.

Even investors working without a broker get seduced by strong, historical returns.  But the only long term certainty is this:

If you build a responsible portfolio blending low cost stock indexes with bond indexes, you’ll beat more than 90% of the professionals over the long haul.  That’s a proven fact.  Gamble if you want.  But the academic data on the statistical superiority of index funds is irrefutable.  And it’s what brokers and advisors (and others in the industry) don’t want you knowing.

It’s easier  for investors to build responsible portfolios of indexes with DBS Vickers.

What will you be buying?

As you get older, you’re going to want to take fewer risks.  Your account will require more stability because you’ll soon be drawing from that money during retirement.

As such, it’s important to have a healthy bond component.  My friend’s broker didn’t buy any investment grade bonds for her account, so when her stocks went south, her account got hammered.  Tiger Balm would go well, mixed with this broker’s laundry detergent, don’t you think?

Many people suggest a bond allocation that’s equivalent to your age.  If you want to be slightly riskier, you could have a bond element representing your age minus 10.

For example, if you’re 50 years old, you might want a bond allocation of 40% to 50% of your total portfolio.

Singaporeans might be interested in the total Singapore bond index.  The stock code for this product is A35. 

For their local stock market exposure, they could buy the Straits Times Stock index.  The stock code for this product is ES3.

Here’s what a balanced portfolio could look like for a 50 year old:

  • 40% in the Singapore Bond index (A35)
  • 30% in the Singapore stock index (ES3)
  • 30% in the world stock index (VXC)

The first two indexes above trade on the Singaporean stock market, and the world stock market index trades on the Toronto Stock exchange.  But you can purchase them all, online, using DBS Vickers—taking a grand total of about 10 minutes.

Then you rebalance with new purchases.  For example, let’s assume that you have allocated your money based on the above model.  Then assume that if the Singapore index hasn’t done as well as the others, after a month or a quarter, then it will represent less than 30% of your account.   So when you add fresh money to your account, you’d add fresh money to that index.  If both the world stock index and the Singapore stock index have increased, leaving this hypothetical investor with less than 40% in the bond index, then they’d add fresh money to the bond index when they want to invest.

This ensures a couple of things:

  1. You’d be rebalancing your portfolio to increase its overall safety
  2. You’d be buying the laggards, which over a long period of time, will also ensure higher returns

This isn’t the same thing as buying individual stocks that are underperforming.  Indexes include many stocks, and indexes will always recover after drops.  You might need patience, but they’ll eventually bounce back.  Indexes, after all, represent the entire market.  They don’t go bankrupt.

Below you can see how to initiate a purchase order for the Singaporean stock index.

  1. First, you select Singapore as the market, as you can see on the first line
  2. Then you place an order to “buy” (see the second line)
  3. Then you order the quantity of shares that you want.  To figure this out, you’ll need to know how much you want to spend.  If you want to spend just over $3000 (Because of the minimal commission involved, I don’t recommend spending less than $3000 at a time) you’ll need to figure out how many units you can buy with $3000. Currently, the price is $3.15 per share, so 1000 shares would cost $3,150. 
  4. Then type in the symbol.  In this case it’s ES3
  5. Then you’ll need to select “Limit Order” and put the most recent price in the “Limit Price” box below it. 
  6. Then you’ll be set to enter your trading password and make your purchase. 

Buying your world index fund

You may want to purchase a world stock market index to cover China, India, the U.S., Europe, Australia, and the remaining first world and emerging market stock indexes.

I listed China and India first, just to get your attention.  They’re growing, of course, but studies show that growing countries (in terms of GDP growth) don’t produce the best long term stock market returns.  Surprised?  You shouldn’t be.  I’m always baffled at the lip service paid to the fallacy that fast growing economies equate to fast growing stock markets.

The world stock market index I listed above (which you can buy from DBS Vickers) has an emerging market component, but it’s a small component.  After reading these studies yourself, you might decide that a small amount of emerging market exposure is more than enough for you.

Fast growing economies generally equate to poorer long term stock returns.  You can read about it here:

Few people know this.  And I’ve always wondered why.

When buying that world market index from DBS Vickers, you’ll find that the commissions are even lower than they are with the Singaporean indexes.  You could buy about $40,000 worth and still pay just $30 U.S. for the purchase.  Fundsupermart would charge about $400 to purchase a world stock market unit trust with $40,000.  And again, it would very likely underperform the world index—because of its fees management fees.  Never mind the sales fee, which would just add another puncture to the bottom of your boat.

To purchase the world stock market index (VGX) your market would be “Canada”, you’d place an order to buy just the same as you would with the Singapore index, but you can just go with the “market order” instead of the “limit order” and there’s no need to put in a share price.  You’d just pay the market price of the units on the very next New York stock exchange trading day.  Of course, you’d have to figure out how many shares/units you could buy with the money you’re investing, and you could check that out here:  http://finance.yahoo.com/q?s=vt

Your order entry will look like this:

Commission costs

When buying Singapore exchange traded funds through DBS Vickers, you’ll notice that commission costs increase with the size of the purchase or sale.

For example, if you buy $15,750 worth of the Singapore stock index, you’ll pay commissions totalling $55.19—as you can see below.

Commissions for unit trusts purchased through Singapore’s Fundsupermart charge roughly three times that amount  and because of heavy unit trust management fees the Singaporean unit trusts dealing with Singaporean stocks tend to underperform the Singapore stock market index—despite some tricky marketing to the contrary, which you can read about

That’s to be expected, of course.  In the financial service industry, you generally make more money if your fees are lower.  The financial service industry makes more money if your fees are higher.

Regardless of what kind of stock market investing you’re looking at, regardless of what international market you’re dealing with, the odds tend to favour indexed investments over a long period of time….because they’re so inexpensive.   To learn why, and to understand the poor odds of beating a portfolio of indexes, you might want to read Princeton University professor Burton Malkiel’s academic paper

Don’t you wish you learned this stuff in school?

Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School and Millionaire Expat: How To Build Wealth Living Overseas. My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions.

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666 Responses

  1. DIY Investor says:

    Great information. It is not that hard to beat the pros when you minimize expenses! To bad that lady came to you too late.

  2. @DIY Investor

    Thanks Robert.

    I guess, on the bright side, there's still plenty of time for her. She might not make up the loss quickly, but as long as she doesn't get hooked into another poorly allocated portfolio, the sun can shine again.

  3. Sorry to hear about the lady's story. Any chances of going after the broker for violation of fiduciary duty?

    Maybe you're right, though. She did have the good luck to come to you and turn the ship around.

  4. @Kevin@InvestItWisely

    Interestingly, she tried that Kevin.

    Then, after I posted this, I got an email from a Singaporean newspaper, interested in profiling the woman in a story about her misfortune with the brokerage. She's intensely private though, and didn't want to have anything written about her. I can understand that.

  5. @Andrew Hallam

    Definitely understandable. On the other hand a bit of pressure might bring redress (or it might not). I do hope things work out for her going forward.

  6. Nataliee says:

    Hi Andrew,

    Thks for all that you've shared. Breathe deep… here's the questions I have:

    Q1) When choosing international index…. The code for international index is VT for Sporeans (sample used above), but the code for Canadian is VEA (which you own) or XIN (represented by .TO after it) as per your blog entry titled "Expatriate Canadians investing in Spore…" What are the reasons as to why the international index differs?

    I do realize these though:

    VT Region Allocation- 15.1% Emerging Markets, 25.7% Europe, 13.4% Pcific, 45.8% North American (total net assets 1.2 billion)

    VEA Region Allocation – 64.7% Europe, 34.5% Pacific, 0.8% Emerging Markets (total net assets 7.4 billion)

    2) A responsible portfolio is to own 3 index funds. Below is the portfolio for a 40yr old Canadian investor – extracted from "Expatriate Canadians investing in Spore…" :

    XIC = Canadian index (20%)

    XSP = U.S. Index (20%)

    XIN = International Index (20%)

    XSB = Canadian bond index (40%)

    I'd like to know what is the advantage of the portfolio above of having an additional index fund which is the US index. That makes it a total 4 index funds in the portfolio instead of 3.

    Thanks in advance… Need to acquire as much knowledge so as to be more finacially literate by the time I ''market the 2nd holy book".

    Nataliee 🙂

    • Hi Nataliee,

      Thanks for your questions.

      The international exchange traded fund index (VT) contains a representation of the entire world's markets, including the U.S.

      The exchange traded fund index (VEA) constitutes stocks from the first world international markets, not including emerging markets and not including the United States. Emerging markets include stocks from countries like China, Thailand, Brazil etc.

      I own the exchange traded fund index (VEA), but I also own the U.S. exchange traded fund index (VTI) If you want to be a "one stop shopper" you could simply own (VT) comprising of a combination of the other two. Is there an advantage to owning VT vs VEA + VTI? Not really. It's entirely up to you. I don't own VT myself because I don't want any exposure to emerging markets. My policy is a bit odd, but here it is: personally, I don't like to invest money in countries where I can't drink the water out of the tap.

      Some people suggest that the emerging markets could have higher returns over time, than developed markets. But I'm not so sure. The world's biggest emerging market over the past 150 years was the United States. But its market returns haven't really beaten Britain's market returns (they've been similar) despite the fact that the U.S. easily outstripped the UK, in terms of GDP growth. But I have to admit that I am very rare, for not having an emerging market component. It certainly wouldn't hurt to have a bit of exposure to it, over the long term. And VT handles the job of "owning the planet's stocks" very nicely, while not having especially large exposure to the emerging markets.

      As for XIN, it's exactly the same as VEA. But it trades on the Toronto stock exchange instead of the New York Stock Exchange. And its internal fees are slightly higher than the fees of VEA. That said, it's still extraordinarily cheap, compared to an actively managed international mutual fund. And we know that if the internal costs are low, the returns will generally beat higher cost (actively managed) funds.

      That Canadian investor example doesn't have exposure to the emerging markets either. But again, it certainly wouldn't hurt if it did. I just have a funny prejudice, I suppose!

  7. Nataliee says:

    Wow Andrew….. that's a lot of info…thank you for sharing your knowledge!

    I feel very addicted. The more I read, the more engrossed and addicted I get. I keep wanting to discover and learn more! What do you think of 22% Spore bond, 26% STI index, 26% VTI & 26% VEA? Besides having less than 1% emerging markets which is a ''pro'', what are the pros and cons for this portfolio? Is there any kind of higher risks which I should be able to stomach if I opt for this portfolio or would you recommend splitting the 78% into VT and STI equally? thanks a million!


    Nataliee 🙂

    (the aspiring frugal candidate)

  8. Thanks for the questions Nataliee!

    If you are between the ages of 22 and 30, I'd say that having 22% of your money in a Singapore bond index is a great idea. There's a general rule of thumb (especially for people without pensions) that they should have a bond equivalency that's close to their age. For example, I'm 40 years old, so 40% of my invested money is in government bond indexes. If I was a riskier investor, perhaps I'd shoot for 30% in a government bond index (as a 40 year old).

    If you are suggesting 22% in a government bond index, then it would be a suitable amount if you are in your mid to late 20s.

    As for your equity (stock market) exposure, if you plan to live in Singapore your whole life, you might want to keep a higher bias leaning towards the Singaporean markets than the one you suggested above. For example, I'd suggest something like this, using the exchange traded funds you mentioned above:

    22% Singapore bond market index

    38% Singapore stock market index

    20% U.S. stock market index (VTI)

    20% First world international stock market index (VEA)

    Of course, the stock markets will fluctuate daily. But keeping somewhat close to these allocations would be a great idea. For the first year of saving/investing, you might do something like this:

    You might save $5000 in a quarter. With it, you could buy the Singapore bond index. The following quarter, you might save another $5000. With it, you could buy the Singapore stock market index. The following quarter, you might save another $5000. With it, you could buy the U.S. stock market index. As you first build the account, your percentages wouldn't be aligned with the plan above. But that wouldn't matter. You'd eventually start working your way into it, getting closer and closer to your desired allocation as you make deposits.

    Those are all great questions Nataliee. Keep them coming. And remember that the best way to learn this stuff is to teach what you learn along the way!

  9. Newbie says:

    I am a newbie to ETFs and investments and am 40 years old, planning for my retirement .thanks for your very wonderful blog of which I learnt alot. May I ask for your advice, cause I understand that currently very few people own bonds due to the interest rates, and the Singapore ETF is also very high priced (due to STI index being high) at the moment. Do I still start off buying in the same proportion, ie 40% bonds, 30% Singapore ETF and 30% World Stock Index, or do I buy the World Stock Index first this quarter and "watch and see" to enter the A35 and ES3 market in this coming year or perhaps even next year – thereby just acquiring VTI since they are relatively better value?

    Is it a good strategy to invest quarterly or monthly?

    How do you know which ETFs to pick from the myriad of choices for each category? What are good resources to research on?

    Thanks in advance for your patience but I am most interested to be financially literate.

  10. Hey Newbie,

    Your instinct to start with the world index is probably a good one. But I wouldn't get too worried about overpaying for the STI index. In 20 years, you'll probably look back at today's price and realize what a bargain it was. You might want to start with the world index, add some of the STI index, and cap it off with a bond index. True, interest rates are low, but if the stock markets fall, you will find yourself in an enviable position to sell some of those bonds, and buy into the lower priced equities. You could think of your bonds as "dry powder" that safely waits to be rebalanced into stocks when markets fall.

  11. Janet says:

    Hi Andrew,

    This is a great blog you have. I am a 22 year old Singaporean and am

    interested in starting my own investment portfolio. In fact, I have

    just started a $600 quarterly RSP on the Navigator platform with Aviva

    and wasn't charged a wrap fee. Should I continue putting money into

    Navigator or should I start ETFs or do both concurrently? If ETFs,

    should I stick to Singapore ETFs or have some global or U.S ones? I

    was thinking of a more aggressive mix since I have a longer time

    horizon but what kind of funds would be good for me? I am really new

    into this and would like some advice. Thank you for your time!

  12. Hi Janet,

    You'll save a lot more money if you take the ETF route, rather than the route with Aviva. The costs that you aren't seeing, with Aviva, are the actively managed fund costs. The funds within this program are actively managed, and they cost you hidden expense ratio fees that won't make that route as efficient as the one I outlined above. Over a lifetime of investing, the higher cost Aviva directed products will likely cost you more than half of your investment returns. For example, if you built an account of $3 million with low cost ETFs over 30 years, you'd likely end up with only half that, taking the Aviva route. I'm really glad that you found this blog. And when my book is available in Singapore, in late July, it explains much more. I look forward to hearing what you think about it Janet.

    Considering your age, you could go with just 15% to 20% in the Singapore bond index, while giving you exposure to the world stock market index and the Singaporean stock market index with the remainder. This allows for greater risk (potentially higher returns) than my portfolio (I'm 41 years old).

    Unfortunately, with Aviva, if you sell the funds you have before a five year period, the company will nail you with fees.

    Please let me know if you have other specific questions, and I'll do my best to answer them.

  13. Jerry says:

    Andrew, this is great–very practical and easy to follow.

    When you speak of returns of the various indexes, one question that comes up is how you think about the fact that the index returns are coming in their own respective currencies? I wonder if you have any thoughts on exchange rate exposure? Do you think about the impact the various ETFs will have based on exchange rate movements? Or do you just feel like exchange rate movements have less of an impact over time so you don't bother trying to optimize for them?



  14. Thanks for the comment Jerry.

    As a long term investor, this is what I think sounds practical:

    First, most professional exchange rate forecasters have dismal historical records of success, when trying to guess currency fluctuations. For the most part, it's an industry that benefits brokers and financial institutions, via commissions and bid/ask spreads. When people trade currencies, the house always wins…even though trading currencies is a zero sum game, as an aggregate.

    But this is how I think you could deal with it. If you rebalance your account regularly (by purchasing the lagging broad based index) you could end up value averaging into your indexes, based on currency and valuation fluctuations over time.

    This is what I mean:

    Assume that you have a Singapore stock index, a world equity index, and a Singapore bond index. You set an allocation for each (much like my post indicates) and if your base currency is Singapore dollars (assuming you're Singaporean) you could convert each of your holdings (on paper) into Singapore dollars, and see what your allocation percentages are.

    For example, if the world index is quoted in U.S. dollars, and if it drops in value, relative to the Sing dollar (but its price in U.S. dollars stays the same) then this could be the index that you add fresh money to at the end of the month (considering that your other two indexes have not dropped). Of the three indexes, in Singapore dollar terms, it would be that month's underperforming index (considering that the other two Singapore indexes didn't move in price).

    With each month's deposit, if you deposit money into the worst performing index (of the 3 listed above) then over a lifetime you will be rebalancing, and likely profitting, from establishing a benchmark allocation, in Sing dollars, that you would maintain. You would essentially be value averaging.

    I think it makes a lot of sense. What do you think?

    • Jerry says:

      Thanks, Andrew.

      I guess the obvious questions would then be:

      In the hypothetical situation you described, the investor is rebalancing by increasing weighting in their world index because the USD dropped in value vs. the Sing dollar. But then does that go against the idea that you are rebalancing to the laggard–because the world index wasn't necessarily a laggard inherently, it just turned out that way because of the exchange rates?

      Or should I interpret that the implied view here is that because the Sing dollar appreciated, you expect it to not sustain that level of outperformance over the long run, so the rebalancing you are doing is also an inherent expectation that the USD will come back? I.e. that you are assuming no long-term trend of one currency being stronger than the other?

      Just a couple of other (not really related) questions if you don't mind helping with them:

      1) I read somewhere that David Swensen's "benchmark allocation" for personal investors includes a pretty decent component in REITS. Do you have any view on this and why or why not to include an element in REITS?

      2) If I'm not wrong, the Singapore bond index is all government and quasi-government bonds. Are you in the camp that thinks government bonds are a much better option than corporate bonds to fill that part of the portfolio (also heard about David Swensen that he doesn't like corp bonds)

      3) Any compelling reason other than the fact that the index is in Sing dollars to use the Singapore bond index (even for Singaporeans) as the bond component of the portfolio? Do you think it makes any sense at all to invest in other countries' government bonds instead? I'm just curious seeing as the Singapore government bond yields seem to be pretty low.

      Thanks a LOT for your ideas!

      • Hey Jerry,

        If you owned a world index denominated in U.S. dollars, and if it dropped in value, it could actually mean that the U.S. dollar rose, instead of dropped…considering that a world index has a global capitalized weighting with much of it allocated to non U.S. companies.

        I could be wrong, but I think that whatever rebalancing strategy we use, if we're consistent with it, we'll do well. Short term, currencies could cause some swings, but over an investment lifetime, I think it's a zero sum issue.

        As for your question related to REITs, I think there's a strong argument for their place in a diversified portfolio. In Table 1.1, in Swensen's book, Unconventional Success, he recommends the following breakdown as a sample for a diversified portfolio:

        30% domestic equity

        15% foreign developed equity

        5% emerging market equity

        20% real estate

        30% bonds

        I don't personally have REITs in my portfolio. Over the course of many years, they aren't likely to add or subtract gains (relative to a portfolio without them) but they could surely smooth the volatility.

        As far as bond yields are concerned, I don't get too concerned about them. Over the long term, there will be high and low yields for respective government bonds. If I expect to be paying future bills in Canadian currency (assuming that's where I'll retire) then Canadian government bonds will make up my bond component, because that's the currency that I'll be paying my future bills in. If I was Singaporean, and expecting to retire here, I would do likewise here.

  15. Jerry says:

    Thanks, Andrew.

    If I have a CPF account, I would plan to net the value in that account against my allocation of government bonds. After all, CPF savings interest rates are supposed to be between 2.5 and 4% now, and I would put them on the same level as government bonds in terms of lack of risk.

    Would you disagree with that logic by any chance? Just want to make sure I'm not missing something big here….


  16. That actually makes perfect sense Jerry. The money you have in your CPF, making the guaranteed rate of return, should definitely count towards your fixed income (bond) allocation.

  17. Sigil says:

    Hi Andrew, many thanks for your detailed and very informative post!

    The advantages of low-cost passive investing have really hit home for me: as a Singaporean living/working in the US for a while now, I've had my Sing$ savings invested for me in an actively managed account, while I've taken my US$ money and dollar-cost averaged myself in a range of low-cost ETFs (80% equities:20% bonds). As such, I have a personal experiment going on in the comparative advantages of active vs passive investing.

    I was rather unlucky to start my investments in both in 2007, a poor time to begin in my opinion because of the Great Recession that hit just then. I basically bought at the peak and rode the markets all the way down. Both portfolios have been through the rollercoaster bear and bull runs by the markets of the past four years. However, at this point of time, my passively-invested US portfolio has actually outperformed my actively-managed account by a significant margin – my basket of index funds is down 4% (because of recent fear-driven events…it was actually up 10% a couple of weeks ago), while my actively-managed fund is down 20-25%.

    Upon reviewing the transactions of the actively-managed fund, I'm of the opinion that many of the losses were locked in as a result of attempts by the fund manager to basically time the market, and sell counters that they thought would underperform. On my trips home, I've met the fund manager each year for a couple of years now, and each time he confidently forecasts that I'll recoup my initial investment within the year. I've grown increasingly pessimistic about that.

    I'm going to move home in a year and am planning to raise my family in Singapore, hence I'll be here at least for the medium term. I'm considering whether or not to liquidate my US portfolio and bring funds home to invest, or to keep my account active here. I am also considering closing my actively-managed Sing$ account and investing the money in ETFs from Singapore instead.

    I've read many of the same books and resources as you have, and am now much more of a believer in passive investing. However, as you know, much of the information out there is US-centric. I have a couple of somewhat basic questions that I would like to ask, because I want to make sure I have my fundamentals right:

    1. Why do people (your good self included) recommend keeping the majority of one's investments in the currency of the country you intend to live long-term in? Is it to hedge against currency exchange spreads?

    2. I would like to continue passive investing in Singapore. However, I'm concerned that the equity allocation you recommend (30% STI ETF:30% world) greatly overweights the stocks of one country (Singapore). My understanding from my reading has been that one should diversify across many asset classes as well as countries. Do you think that your strategy might be rather risky in that "country" sense, being less diverse?

    3. A big reason why I'm considering moving my US money home is because Non-resident Aliens (non-US citizens basically) are charged 30% taxes on their dividends, and additional estate (death) taxes on their US-situated assets above $60k. You recommend buying the VT ETF (VTI?). However, as far as I know, it is denominated in US$ and is domiciled in the US. With these taxes in mind, do you think it still makes sense for a Singaporean to buy the VT? If we don't buy US-domiciled funds to reduce our tax rates, do you have any good alternatives in mind on the SGX?

    Many many thanks for your time and wisdom!

  18. Hi Sigil,

    My apologies for taking so long to respond. I'll do my best to answer your questions:

    1. Why do people (your good self included) recommend keeping the majority of one’s investments in the currency of the country you intend to live long-term in? Is it to hedge against currency exchange spreads?

    I recommend that a person's bond allocation should be in their home country, if possible, and that they should have a healthy exposure to their home stock market as well. If you are going to live in Singapore, you'll be paying future bills in Singapore dollars. Having the bulk (or at least half) of your money in Singapore dollars assures you that when your portfolio has a given amount in it, that's going to be real money to you–money that you can and will be spending on the streets. If your dollar falls, so what? If the Sing dollar rises, what will it matter to you? In my view, a resident of a country takes a currency risk when the majority of their investments are in a foreign currency, and not in the currency that they pay for their own groceries in. You may have read some of William Bernstein's books. He actually emailed me and suggested that this line of thinking has been something he has believed in for years. To me, it just makes practical sense.

    2. I would like to continue passive investing in Singapore. However, I’m concerned that the equity allocation you recommend (30% STI ETF:30% world) greatly overweights the stocks of one country (Singapore). My understanding from my reading has been that one should diversify across many asset classes as well as countries. Do you think that your strategy might be rather risky in that “country” sense, being less diverse?

    From what I have read, the international exposure mentioned above (50% of stock market assets to be globally diversified) is far more global than most books and experts will lead you to. In other words, I think my recommendation gives far more international diversification than other models that I have seen. If you look at Swensen's, Bernstein's, Swedroe's, Malkiel's, Bogle's, Jim Lowell's, Frank Armstrong's, Jonathan Clement's, Paul Merriman's, Timothy Middleton's, Richard Jenkin's, Carl Delfeld's, Kiplinger's and Morningstar's respective models, they all recommend far less global exposure than I have (with the remaining equities in a home country index). The only person whose portfolio model of international equity exposure is as high as mine (from all the reading I have done) is Andrew Tobias' model, which mirrors my own.

    3. A big reason why I’m considering moving my US money home is because Non-resident Aliens (non-US citizens basically) are charged 30% taxes on their dividends, and additional estate (death) taxes on their US-situated assets above $60k. You recommend buying the VT ETF (VTI?). However, as far as I know, it is denominated in US$ and is domiciled in the US. With these taxes in mind, do you think it still makes sense for a Singaporean to buy the VT? If we don’t buy US-domiciled funds to reduce our tax rates, do you have any good alternatives in mind on the SGX?

    It would be great if the SGX had such a product, but even if it did own U.S. equities, the U.S. government would still take 30% witholding taxes from the dividends. You just wouldn't see it happening. The best thing, however, about using DBS Vickers, or another Singapore-based brokerage, is that you won't have to pay capital gains taxes (If you lived in the U.S. you certainly would)

    So imagine making 10% per year on your VTI index, here in Singapore. Imagine roughly 2% coming from dividends and 8% coming from capital gains. You would pay 30% tax on that dividends (taken at source) which would give you a net dividend return of 1.4%.

    Adding your capital gain of 8%, plus your dividend net gain of 1.4%, would give you an after tax return of 9.4%.

    We are extremely lucky to be living in Singapore. Where else can someone "clear" net profits of 9.4% on a 10% investment, in a regular investment account? If any Canadians or Americans are reading this, they'll absolutely drool. This IS NOT a RSP or IRA account. Nor is it a Singapore CPF account (somewhat equivalent to a Canadian RSP or U.S. IRA). This is simply, a fully taxable account, where Singaporeans can make a gross return of 10%, and a net return of 9.4%.

    Just by making that comment, Sigil, I'm afraid we could get a rush of overseas applicants!

    We're lucky, indeed, to be living in Singpapore.

  19. Martin says:

    Hi Andrew,

    I'm intending to overweight my stocks to my home currency (SGD), but have an issue with the fixed income portion.

    I was just about to buy the Singapore Bond ETF that you talked about above, but when I dug a little deeper, it seems that the trading volume for this ETF is extremely thin. Most days, it doesn't even have pricing / vol information on SGX because it's so rarely traded.

    I'm concerned that this might present a liquidity issue. What are your thoughts on this?

    Best Regards,


  20. Hey Martin,

    Thanks for the comment and the question. I know that a number of launched ETFs in Singapore have low trading volume. I can imagine this affecting the bid/ask spread, to a degree. But I have been helping a couple of Singaporean friends with their DBS Vickers accounts, and we have always been able to make our fixed income ETF purchase. That's not to say that one day we won't have trouble, but for now, it seems OK. With more people in Singapore catching on to the advantages of ETF investing, perhaps the volume will increase over time. Let me know how it goes. I would like to stay on top of this kind of thing. Perhaps I should buy some for my own account as well. Then I can have a regular, updated firsthand feel for it.

    Thanks again Martin

  21. Martin says:

    Thanks Andrew.

    I'm still not that comfortable and might end up splitting between Vanguard's bond ETF and the S'pore one or substituting the S'pore one with an international bond ETF.

    What do you think?

    A side note. Why are your friends using Vickers? Unless they are priority customers and have special rates, I think it's worth checking out Standard Chartered's new online trading platform… and no I don't work for any of the banks 🙂

    Stanchart has similar commission rates but a few excellent features. They don't have minimum commission rates, don't charge custody fees (important if you're buying US traded ETFs), don't allow short selling on their system, don't hold shares at the Central Depository (so the holdings you see on your online portal is what you have unlike the local brokers where the most updated / accurate holdings is actually the CDP account NOT your online trading portal) and enables one to trade on about a dozen exchanges globally. Check it out.



    • Thanks Martin,

      I'll have a look at Standard. With so many changes within the industry, I think I'll keep my money where it is…otherwise I could get convinced to keep changing brokerages. But for newbies, it Standar could be a better option.

      Thanks!! This is the best thing about blogging about money. It's a massive educational community.

      • Mohit says:

        Hi Andrew,

        First and foremost had a great time rwith adding your book Millonaire teacher. Very insightful and data based. Couple of queries for your perspective,

        1. Very similar to Martin’s comment why don’t you recommend StanC as their commissions are much lower
        2. Considering the markets are at a peak and if am having lump sum investments would you still recommend the balanced index approach or over weight in some class or hold cash for now. Am 35 and in Singapore.

  22. Sam says:

    Hi Andrew,

    Singaporean here. What do you think of getting a HK index? Is it true that the HK stock exchange have a better standing than the Singapore exchange? Will a HK index as a whole perform better than a SG index? And ETFs = index funds? Sorry for such annoying basic questions.



  23. elta says:

    Hi Andrew,

    Just finished reading your book. Thanks for making investing easy! Have started buying the ETFs you recommended. Just one question please….what is the difference between VT and VTI?


    • Hi Elta,

      I'm glad you like my book, and I'm happy to hear that you're ready to take the low cost approach to investing!

      To answer your question, the ticker symbol "VT" represents the world stock market index. Everything! This includes the U.S., Singapore, China, England, France….everything.

      VTI is just the U.S. stock market index: U.S. stocks only.

      Let me know if you have any other questions and I'll do my best to help.



  24. elta says:

    Hi Andrew,

    Just finished reading your book. Thanks for making investing easy! Have started buying the ETFs you recommended. Just one question…what is the difference between VT and VTI?


  25. Hi Sam,

    Over the long term, I think both the HK index and the Singapore index will perform similarly (over our lifetimes). Short term, it's anyone's guess.

    Just build a very diverse portfolio and rebalance it with new purchases (or by selling some of the winners once a year, to top up the losers) and you'll do very well. Don't try to guess which countries market will do better over the short term because over the long haul, that kind of thing won't be very productive.



  26. CP says:

    Hi Andrew,

    Hope you can help me with this basic question.

    I have taken a look at the bond and the ETF which you have recommended, however I notice that that dividend payout are usually in the range of 1% to 3% (please correct me if i'm wrong). I'm wondering how would this be enough to protect against the inflation rates which we are having in Singapore which is about 4.5% this year.


    • Hey CP,

      If you were buying a bond that yielded just 1.5% with inflation running at 4.5%, then you would have reason for concern. However, with a bond index, it would be different. Let's assume that inflation jumped to 10%. Assume also that the Singapore government bond (3 yr bond) was yielding 2%. What would happen? So many people would sell it, driving the price down to the point where it was attractive again to new buyers. This price, of course, would drop to a point that would give new buyers a yield exceeding 10%. The coupon would stay the same, but the dropping price would increase the yield.

      With a bond index, as soon as one bond expires another is purchased. Inflation will set the market price for that bond. In other words, the rotating component of a bond index would ensure that (with a bond index buying relatively short term bonds) you would always stay ahead of inflation—over the long term.

  27. CP says:

    Hi Andrew,

    Thanks a lot for sharing with me on the mechanics of the bond index. If i understand this correctly, by investing regularly, I should be able to hedge against inflation.

    For the bond index do I need to know when the bond will expire.

    Also does the ETF and world stock index perform the same way as the bond index?

  28. Jonathan says:

    Hi Andrew! I just want to ask you, for us (me and my spouse in our early 30s, no kids yet) who works 9-5 job here in Singapore, living on a monthly salary the following questions:

    1. As you already advice us to go 40% on bond index (A35), 60% on stocks index (30% each for ES3 & VT) every month, do we need also to be partly market timers, meaning buying only when the price is cheap (either bonds or either one of the stock index) or just simply right away do this 40-30-30 stock allocation on the mentioned indexes right after each monthly pay check is received to invest into these three stock indexes irregardless whether market is down or up?

    2. In today's volatile market, what should be the best strategy to time the market? I have a friend who advise to split monthly salary into 4 and invest every each of it one per each week (Dollor-Cost Averaging it) rather than one shot investing it right after the salary was received. Is this a good strategy?

    3. One last question is, how would you advise where to put our money for emergency (especially that banks here in SIngapore gives super low rates if you simply put it in the bank or put in a CD) and how much should we need to put into it? A common theme I always hear on some advisers is that we need to have atleast 3-6 months of living expenses (i don't know if that's 6 months of gross combined salary of a couple or net), but i just feel that 6 months is too much if i just simply put it in a CD earning next to nothing.

    I would appreciate your advice with regards to this matter.

    • Hi Jonathan,

      I certainly don't have 6 months of my salary sitting around, but some people like that security. If I needed a large chunk of money right away, I would just sell some of my bond index. It's accessible, and I would only pay a $25 fee to get it out (the commission).

      If you are just starting out, I suggest building your portfolio with $3000 minimum deposits (assuming you have to pay commissions for ETF purchases).

      You could buy one index during one month, another the following month, the next one the month after that. You could just keep doing that until your account grows large enough to warrant purchasing the lagging index each month instead.

      If I suddenly fell into $200K (or whatever the figure) I would invest it all at once. The markets aren't particularly expensive right now (there's still a touch of fear, which is good) and I would allocate it as mentioned above. I certainly wouldn't waste money on the commissions I would need to pay to invest it weekly. That would probably be a waste of money. What do you think?

      If you read my book, you'll get a clearer sense of my philosophy. You can get a copy at most Singapore bookstores.



  29. S. Lim says:

    Hi Andrew

    Very informative blog you have here. I have been spreading the word about your blog, book and strategy. Like you said, teach to learn more.

    I would like to know if there's any particular reason you recommended ES3 (0.3% fee) and not G3B (0.2% fee) for ST index ETF, and A35 and not KV4 for Singapore bond ETF.


  30. Val says:

    Hi Andrew, I had finished your book and just have a few questions. I understand the concept of investing in index funds and the compounding interest effect. However, I don't understand the relation between the two. Should I start to invest monthly on a ETF for a long period of time the gain after the investment period will only be capital gain. There isn't any compounding interest as there is no yield from such ETF unless we do a selling and reinvesting? Can you please clear my doubts?

    • Hi Val,

      All of those ETFs pay either interest (in the case of the bond) or dividends (in the case of the equities). You can add your quarterly dividends to your fresh cash, for further purchases. So yes, the compounding effect of capital gain and dividends/interest will work in tandem. My ETFs, through Vickers, pay me roughly $40,000 a year in interest/dividends. I add this money to the fresh money I invest. My account is fairly large, but it got that way through patience, discipline and regular investing.

  31. Jonathan says:

    Thanks Andrew! Your views make sense. Now atleast I have a model to follow, to buy one stock each month as I received my pay check. Actually I started doing that since I read your book and it helps me alot. Since market is cheap, i was able to buy 3 funds from August to October which are:

    ES3 – bought at 2.77 in August and as of now it's 2.84

    VTI – bought 58.70 sometime september and now it's 64.04

    VWO – bought 35.53 sometime october and now current price is 40.74

    I'm very much happy bout my purchase so far but i know to be fully diversified and have some sort of "fully" diversified portfolio, i need to have bonds (A35) and I need to have International stock index (VEA). I'm quite torn between this two because i don't know when the market is going to bottom out due to debt crisis in Europe and the Singapore Bond index I think is too expensive compared to it's usual normal price. Other than this struggle, I find your easy to follow advice really make sense and because of it, I'm making money in this time of market uncertainty. I know this could change any minute (that's why i think it's really about time to have Bonds component now than later), but atleast I know somehow I'm stepping in the right direction.

    I have another question to you, I read in another book "The Smartest Portfolio You'll Ever Own" by Dan Solin and I was introduce to the Fama French model where-in he suggested having value stock and small company stock in each one's portfolio. Any comment on this one? Do you also advice your friends to follow the Fama French model?

    • Hi Jonathan,

      You mentioned this: " I’m quite torn between this two because i don’t know when the market is going to bottom out due to debt crisis in Europe and the Singapore Bond index I think is too expensive compared to it’s usual normal price. Other than this struggle, I find your easy to follow advice really make sense and because of it, I’m making money in this time of market uncertainty. I know this could change any minute (that’s why i think it’s really about time to have Bonds component now than later)"

      But remember not to think too much. If you are timing purchases or entry points based on prices and world news, you'll be speculating, rather than passively investing and rebalancing.



  32. Bill McLeod says:

    Thanks for Millionaire Teacher, Andrew! I'm about halfway through and thoroughly enjoying your straightforward writing and commonsense advice.

    I'm wondering how you respond to people like Robert Prechter, Ian Gordon, and Harry Dent, who are convinced that the world is heading for a major deflationary episode similar to the 1930s.

    If they turn out to be right, isn't a long-term buy-and-hold strategy potentially disastrous at this time?

  33. WANG Chi says:

    Hi Andrew, thanks a lot for this information. I'm reading your book and it's marvelous. I'm a foreigner who is working in Singapore. But now I can only put S$300 to invest each month, do you have any recommendation. Thanks a lot.

    • Jonathan says:

      Dear WANG Chi,

      If you only have S$300, here's what you can do with it:

      1. Open Standard Chartered Trading Account (This is free)

      2. Buy 100 shares of G3B (DBS ASSET MGMT NIKKO AM SINGAPORE STI ETF). Currently the price as of the time of this writing is S$2.73. Below is the breakdown:

      Instructions: Buy

      Exchange: Singapore SE (SGX)


      Lot Size: 100 share(s)

      Order Quantity: 100 share(s)

      Order Price: SGD 2.73

      Trade Consideration: SGD 273.00

      Client Commission: SGD 0.55

      SG Clearing fee: SGD 0.11

      Total Transaction Amount: SGD 273.66

      With total transaction amount of SGD 273.66, you still have SGD 26.34 dollars left to go for some starbucks coffee, or have snacks or something to celebrate your purchase. 🙂

      Advance Happy Holidays Everyone!

      • WANG Chi says:

        Thanks a lot. I have opened the DBSVickers account but didn't know that in SCB there is no minimum fees. I'll try to open an account in SCB 🙂

      • Jonathan,

        These fees look suspiciously low to me. Are you sure? Is there no annual fee for the account? Based on this, a $2000 transaction would be cost roughly $5, correct? And a $20,000 transaction would be $50 ish? If this is the case, then you have caught on to a very low cost option for those with small amounts to regularly invest in ETFs. I wonder what the bid/ask spread is. Sometimes, a brokerage can advertise low fees in one domain, but skim money off another. Having said all this, it could be the best deal in town. Thank you so much for sharing this!

        • Jonathan says:


          The fees are seriously low. I found out from Standard Chartered site that they are not charging minimum commission , brokerage fees is only 0.2% for securities traded in SGX and 0.25% for other markets. See details from this site below:



          I considered trading in Vickers but the $25 minimum commission charge scares me off. I trade only S$3,000/month so 0.2% so i ended up paying around S$6 per transaction for brokerage fees compared to $25 of Vickers. I keep the other $19 and probably go to Makan Sutra or other of my favorite food place.

          With regards to the bid/ask spread, that one i cannot validate because now im only using SCB for trading. I hope someone here can tell me about their experience if they tried to trade with this two brokerage firms.

  34. Jonathan says:

    I have another question to you Andrew, I read in another book “The Smartest Portfolio You’ll Ever Own” by Dan Solin and I was introduce to the Fama French model where-in he suggested having value stock and small company stock in each one’s portfolio. Any comment on this one? Do you also advice your friends to follow the Fama French model?

    • Hi Jonathan,

      I believe that you can buy ETFs with a value oriented lean, but I don't own any. I do think it makes for a good strategy though. If you check out Larry Swedroe's blog on CBS Market watch, you should be able to find some discussed there, with ETF symbols, I believe.

      And if you have any interest writing a guest post for my blog on what you have found with Standard Chartered, I would love that. I could help you edit it, if you'd be interested.



      • Jonathan says:

        Hi Andrew! I would love to share my discoveries with regards to Standard Chartered Online Trading account and my personal experience using it. Again, this is coming from someone who just started investing this year after I found out about passive investing through this site and reading your book "The Millionaire Teacher…". So this is my way of giving back to other people because I too benefited through this site. I might need some help in terms of editing what i write because I'm not much of a writer. So let me know how to proceed from here (do i need to just post somewhere in this site and then you edit it or shall i email it first to you, in any case let me know).

  35. Kevin says:

    Hi Andrew,

    I understand that the US imposes taxes on dividends and capital gains. Do you have any advice on how we should submit our tax returns?

    I have just started investing in the US and wonder how the process goes about. When we sell ETFs or receive dividends, do they already come to us net of tax? If so, what rates would be levied on us?

  36. Rookie says:

    Hi Andrew,

    Thanks for writing such a fantastic book! I thoroughly enjoyed it. I've got a question though.. In yr book, you recommended the buying of index funds, but in this blog, it seems that you are recommending the buying of ETFs. I'm a bit confused here, as I thought that ETFs have higher costs than index funds?

    Please help to shed some light. Thanks so much!!

    • Hi Rookie,

      Many thanks for the kind compliments about my book.

      ETFs are usually cheaper than index funds. But when I refer to them on my website, I interchange their use. ETFs are essentially the same as indexes, but the manner of purchasing them is different.

      And some companies offer high cost indexes, so you have to look at what the expense ratios are. If you can't buy indexes with costs lower than 0.4 percent annually, then you should probably choose the ETF option.

  37. Edward says:

    Hello Andrew,

    You have a very interesting website. Would be getting your book soon.

    Just wanted to ask when ETFs say that their expense ratio is x%, when exactly are we charged these x%? When we buy or when we sell them?

    Also, are expense ratios separate from management fees? Or are they the same thing?

    • Hi Edward,

      You won't ever see the expense ratio charged, It's a hidden fee that comes off the value of the index or the ETF itself on a monthly or quarterly basis. The management fee is the expense ratio, in some cases, or (depending on the broker) a wrap fee (ie. a further cost) that you pay annually.

  38. Newbie NC says:

    Hi Andrew,

    I have finished your book and inspired to invest prudently.

    I have basic question which I hope you can give some suggestion.

    As outlined in your book, i have decided to go with 30% bond, 35% STI ETF and 35% VT and purchased my first STI ETF this year.

    I am now thinking of getting the ABF ETF when I realise that it may not be possible to get the exact desired allocation due to the lot size restriction and small portfolio. How do you suggest to go about this?

    • Hi Newbie,

      If you could clarify further, I may be able to offer help or offer a suggestion. What brokerage are you using? Why would one ETF charge a lower commission than another? It shouldn't, unless you have something new that I could learn from.

      If you use DBS Vickers, you'll pay a regular commission, regardless of the ETF. It should be similar for Citibank or Standard Chartered.

      Having said that, one of my readers has suggested that Standard Chartered has lower cost commissions than DBS (for smaller purchases). He's going to write an article about that on this site. I'm looking forward to it.

      • Newbie NC says:

        Hi Andrew,

        Merry Christmas to you.

        I have both DBS Vickers and Standard Chartered which I plan to use from now on as they do not charge minimum brokerage unlike other brokers.

        My question is about the restriction in the lot size in SGX market.

        Lets say I need S$2,516 worth of ABF ETF to balance my asset allocation. Assuming the price now is 1.17 that means I need to purchase 2,150 shares of ABF ETF but the lot size of 1,000 means I can only purchase 2,000 shares.

        How do you suggest to rebalance in that kind of situation?

        Pardon me for this basic question.

  39. Ernie says:

    Hi Andrew, I just read your book and am deeply impacted to act now. So I've started a Standard Chartered online trading account and am prepared to start investing from Jan 2012 onwards.

    I have already $30k in capital which I would like to invest but knowing that the economic outlook for next year isn't so rosy with the possibility of the markets going down too, should I invest the whole sum at one go? Or spread it out over the 3 areas (bonds, sgp index & world index) over a period like $5k over 6 months/$10k over 3 months to even out the price fluctuations in the market?

    Would love to hear your advice! Thanks! =)

    • Hi Ernie,

      When you look back at your account, many years from now, you'll see this $30,000 as a small sum. I would invest it all. Don't judge my suggestion based on what the markets do over this year, or over the next 8 years. Nobody really knows where the markets are going to go over such a short period. But you'll look back, years from now, and see $30K as a very small amount. Trying to "time" the market is speculation, not investing. It's best to start off (and continue) as an investor, rather than a speculator.



      • Ernie says:

        Thanks Andrew!

        Appreciate your advice. Will follow it. Blessed Belated Christmas and a Blessed New Year too to you and your family !

        God Bless! =)

  40. Roeburn says:

    Hi Andrew, I had learnt a great deal after reading 3/4 way of your book. Thks for making it so entertaining n simple to understand. Would you advise me to continue to save at least 10k b4 investing or I can do some minimum investment of your style if I hv abt 3k to begin n at least $250 monthly commitment. Warm Regards.

    • Hi Roeburn,

      This is how I view it. You don't want to give up more than 1% in commission for a purchase, so if you have enough money to warrant commission costs that are lower than that, then go for it.

      With DBS Vickers, you'll pay about $30 U.S. per purchase. So you would want to ensure that you invested at least $4000 SGD per purchase to keep your costs low.

      I've been told that the commissions for lower purchases are even lower for the Standard Chartered brokerage. And I believe that Jonathan, one of my regular readers, is going to write about it.

      • Roeburn says:

        Appreciate your reply 🙂 Guess everyone is talking abt the low fees from Standchrt n is worth to chk it out. Had been a "speculator" since I began teaching 10 yrs ago, reaped absolutely zero rtns! Hopefully, my next 10 yrs will be more financially enriching from 2012. Your book is my xmas blessing in 2011. May you be blessed with superb health always. Cheers!

  41. Aron says:

    Hello Andrew,

    i've recently bought your book ( call it a gut instinct telling me to buy it ) and i'm about 3/4 through it ( at the singapore couple investing part ).

    i've read through some articles of your site ( in particular this article ), and the comments from this article.

    conclusion : i'll open up a StandChrt account and start investing passively.

    i have 4k.. so should i buy a little bit of everything or buy one stock first and save up till i get enough money to buy another one and so on?

    forgive me if im really ignorant from the questions following :

    1) im a bit confused about you mentioning ETFs and index funds. i quote : "ETFs are essentially the same as indexes, but the manner of purchasing them is different.

    And some companies offer high cost indexes, so you have to look at what the expense ratios are. If you can’t buy indexes with costs lower than 0.4 percent annually, then you should probably choose the ETF option."

    so what does this mean? Do i still go for the singapore bond index, singapore stock market index ( to add to my confusion : ES3 is listed as STI ETF ) and world stock market index?

    2) again my apologies for what i would imagine is a very stupid question but im all 'alone' here in terms of financial literacy( people around me arent interested in investing )

    …so lets say if i keep on putting money in every month.

    From what i understand, out of the 3 stocks, only the VT gives dividends, which i can then ( assuming i have enough of it ) reinvest back in + my monthly contribution, right?

    so..keep on putting money + dividend money in = accumulated wealth.. right?

    but a small stupid question in my mind would be.. ok..i have a large sum of money in the investment account. but when should i be able to safely say that i can 'reap' the fruits of my labor, so to speak?

    isnt it the case that investments should give you dividends ( a form of passive income ) to aid in your daily living? Or am i wrong?

    again, im so sorry if this is a obviously stupid question ( even some part of my mind is saying im dumb for asking this lol )

    thank you so much in advance if you can enlighten me 🙂

  42. Nick says:

    Hi Andrew!

    I've just started on my first full time job. I'm 28 this year and I am eager to start investing and accumulating real wealth. I wish to know how much do I need to even begin with ETFs.

    I am a complete newbie in this, what I want to know essentially boils down to these few things:

    1. How much minimum do I need to begin.

    2. How much time and personal effort/attention do I need to pay into this (need to manage my time)

    3. How do I see the gradual returns?

    4. Do I have to set aside a fixed sum of money monthly for this? (The better to allocate my budget)

    I think you could see my email (not sure how these websites really work), feel free to contact me via email, or I can check back here anyway.

    Thank you so much for your time.


  43. Newbie investor says:

    Hi Andrew!

    I find your book one of the easiest to understand for a newbie investor.

    I’m 20 years old and currently living in Singapore.

    After reading your book, Millionaire Teacher, I’m truly inspired to start an investment of stock and bond index funds, namely A35(20% of my portfolio), ES3(40%) and VT(40%).

    So, here are my questions:

    1) Is there a minimum legal age to start an account with a brokerage firm in Singapore?

    2) After reading various comments on your blog, I’m unsure of whether to start off with DBS Vickers or Standard Chartered online trading account.

    3) What is the recommended minimum starting capital for such an investment portfolio?

    4) As I’m currently still pursuing my degree in a local university, should I balance my portfolio on a monthly or yearly basis?

    5) In either case, considering that I’ve only around 15k to invest, how much fresh money should I invest monthly/annually? Or should I, in the mean time, just play with my initial investment capital (by selling bond index funds and buying stock index funds when stocks are underperforming) until I’ve got a full time job?

    6) Lastly, I’m considering moving to Australia or perhaps Canada in the near future, is it advisable to include a pinch of Australia’s stock market index/Canada’s stock market index in my portfolio?

    I know some people will say that it is probably too early for you to start investing, but I’ll really like to start ASAP so that our dear compound interest can start waving its magic wand on my investment. Currently, I’m reading up a lot on personal investment. If it is possible, I hope you can recommend me more books that are beneficial for a newbie investor like me.

    A thousand thanks for writing such a great book! 🙂

  44. Cooper says:

    Hello Andrew,

    At last a finance book that I am can understand! Thank you Andrew.

    I am in my mid 50s. Singaporean. No dependants.

    I tried to look up the name of the index funds you mentioned that could be purchased thru brokers in Singapore. I'm a little muddled with all the different names. So just to be sure :

    1) Is A35 : ABF Singapore Bond Index Fund?

    2) Is ES3 : Nikko STI ETF 100 ? Is it the same as DBSSTI:SP ?

    3) What is the full name and ticker symbol of VTI ?

    4) What is the full name and ticker symbol of Vanguard's low cost S&P 500 Exchange Traded Index Fund ?

    5) What is the full name and ticker symbol for "Singapore Straits Time Index Exchange Traded Fund?

    6) I saw on the Vickers website that there are SPDRs. Would they be something similar to Vanguard's S&P 500 ETIF and would you consider using them to buy gold in the form of SPDR Gold Trust : GLD SP?

    Many thanks in advance.

  45. Danielle says:

    Hello Andrew,

    My husband and I are ready to start using DBS Vikers but are still feeling overwhelmed with the choices. I am Canadian. He is European. We are living in Singapore but don't know how long we'll stay or where we'll go next.

    From your blog and your book it sounds like we should buy XSB Canadian Bond; VEA for International Stock; and perhaps XIC for Canadian Stock Index.

    Should we buy Singaporean bonds or stock if we're currently living here? Should we buy European bonds or stock because we might move back there, and with the dreary situation in Europe? Should we include US stocks because they are not included in VEA even though we will not be living there at any point?

    And finally, when we know what to buy is it best to buy all at once or over a few months, since we have already set money aside?

    Thank you! We've been thinking about what to do for months… But just haven't gotten very far.

    • Hi Danielle,

      You could buy the following:

      XIC (Canadian stock index)

      VT (World stock index)

      XSB (Canadian bond index)

      Put your age equivalency in the bond ETF and split the remainder between the other two indexes, with more in the VT index.

      If you are 40, you could do this:

      40% in XSB

      40% in VT

      20% in XIC

      The markets aren't currently very high, so you could do it all at once. Then if the markets fall further, just keep buying with fresh money. What should concern you most is where the markets will be when you are pulling money out as retirees, and not where the markets are next year or the year after.

      If you liked my book, would you mind spending a couple of minutes to write a quick (even just a few sentence long) Amazon review? If you can, here's the link: http://bit.ly/mtreviews



  46. Hi Cooper,

    I wouldn't buy a gold index if I were you, especially considering how highly gold is priced.

    A35 is the Singapore bond index fund mentioned above. The answers to your second question is yes, on both accounts.

    VTI is a Vanguard U.S. total stock market index

    There's no point owning Vanguard's S&P 500 ETF if you already own the total U.S. market (VTI) but in case you want it, the symbol is SPY.

    Sorry for the late reply. I missed your comment.



  47. Agnes says:

    Hi Andrew & Jonathan,

    I recently visited one of the Standard Chartered branches to open a trading account. But I was informed that I have to have 3 years of experience in trading…

    Are there any other banks who offers same fees as that of Standard Chartered? Like Wang Chi, I can only invest $300 monthly. If I follow Andrew's advise to invest at least $3000 at one index (STI), then I can only invest once a year. And buy another index (bond) the next year.

    Does this mean investing in index are not for average wage earners?

    P.S. Dear Andrew, your blog and book opened my eyes to growing my money thru investing. I'm a newbie on this, hope you'll be patient with me. 🙂 Thanks in advance.

  48. May says:

    Dear Andrew

    Am a total newbie to trading. Bought your book in Dec, and it helped me to understand this whole complicated subject more. I would really like to start passive investing, and make my money work for me… hope you could answer some of my questions and help me get started.

    My background:

    I'm 29, married with no kids.

    My husand and I have a takehome pay average of $3000/mth each.

    We have about $600 spare cash per mth

    We also do have some savings parked in the bank.

    1) Should we start an account with DBS Vickers or SCB?

    2) This is my plan 20% Singapore bond index, 40% Singapore stock index, 40% world stock index.

    3) When we first start off, is it always safer to buy the bond index first? Then save and buy one of the stock indexes in the next mth/quarter?

    4) Pardon my ignorance, but when you mentioned Singapore stock index, were you reffering to the STI? are the terms equivalent?

    Thank you!

    • Hi May,

      Yes, the Singapore stock market is the STI.

      You can just save up your money and buy one index at a time. Perhaps you could buy one each quarter. It doesn't matter which one you start out with. You're young, and I don't think you should be concerned with volatility. After all, your real concern will be what levels the markets are at in thirty years, when you're starting to take money out. And of course, at that point, you'll have mostly bonds anyway, so your account won't be very volatile overall, even if the market is.



  49. Wouter says:

    Hi Andrew,

    While I'm still hanging around on your website, I found this interesting article which I would like to share:


    It was posted in May 2011 and debates why we should NOT invest in index funds. Though convinced of the pro's of investing in index funds by the recent books I have read, I would not be very smart if I am not open to any different views or critique to my current view. Therefore I read the article and tried to make sense out of it.

    It looks like he picked a good example of an index fund that has not had a strong performance over the past several years, the FTSE100. I disagree with several arguments, for example, large companies do not necessarily loose sales and profits as per his graph. Sometimes the sheer size of them gives them market rights close to monopolies, or makes it possible for them to produce goods more efficiently so it's difficult for smaller companies to enter the market. This is certainly true for the major petrochemical companies and manufacturing companies.

    I found it interesting to share on your website, and would love to hear your views on his article as well!

  50. Kevin says:

    Hi Andrew,

    I bought your book this month and finished it in a couple of days.

    Great read!

    I have one question, and would love to see your views. I was checking both DBS STI ETF (lot size 100) vs StreetTracks STI ETF (lot size 1000) and trying to decide on which one to buy. Obviously, the DBS is much more affordable given the smaller lot size.

    From DBS STI ETF page ), I read in the prospectus that the expense ratio was 0.49% but the management fee stated in the fund profile was 0.20%. Are these two totally different things?

    Furthermore, the turnover ratio was 28.21%, which seems pretty high to me. Isn't an ETF supposed to have a low turnover rate? After all, it is only supposed to track the STI.

    Looking forward to your reply!

    • Hi Kevin,

      Thanks for your kind words about my book. And thank for posting a question. As for lot size, I don't usually think of one ETF as more expensive than another, based on how many times the pizza has been sliced. The only thing really determining the expensiveness of one Singapore stock market ETF versus another is the expense ratio. Thank you for proving the link. I couldn't see the stated expense ratio as 0.49%.

      Pasted off the page link, this is what I saw:


      Nikko Asset Management Asia Limited Management Fees~

      0.20% p.a.


      HSBC Institutional Trust Services (Singapore) Limited Trustee Fees~

      0.08% p.a. (subject to minimum charge)

      This should give the ETF a total expense ratio of 0.28% per year. There shouldn't be a management fee of any kind unless you are paying a broker to buy and sell funds for you.

      As for your question about turnover, it's a good one. I am also surprised to learn that the turnover is that high–roughly 20%. But thankfully, because you live in Singapore, there aren't taxable consequences for that turnover. And the turnover is still significantly lower than those of the actively managed unit trusts available in Singapore.

      • Kevin says:

        Hi Andrew,

        Thanks for your reply!

        I see, appreciate your "pizza slice" view, makes quite some sense.

        My bad, I got the expense ratio of 0.49% from the prospectus, page 26, item 36.6.

        Pardon my potentially 'newbie' question –

        How does the prospectus' expense ratio differ from the fees stated in the fund profile?

        • Well done finding that Kevin. That is a fascinating discrepancy. And to be honest, I would imagine that the expense ratio listed in the fund prospectus is likely the more accurate figure.

  51. Melvin says:

    Hi Andrew,

    I have read your book and I am really interested in your view of trading ETFs. I have already opened my trading account with Standard Chartered Bank and am looking forward to my very first trading experience following the guidelines that you laid out.

    However, I do noticed that the Singapore Bond Index a.k.a ABF does not seem to be trading in high volume. Is that a cause for concern as it might be difficult for seller to find buyers, resulting in liquidity issues?

  52. Danielle says:

    Hello Andrew,

    I was wondering about your approach to shorter term investing or savings. Most of what is discussed here regarding index funds has to do with retirement. What approach do you recommend for people who want to save money to buy a home, for example? What percentage of one's salary might be advisable to put towards retirement vs home buying or something related?



    • Hi Danielle,

      If I were going to be saving for a home (and this is just my personality showing here) I would put everything I could in a high interest savings account (the highest I could find, anyway) and save like crazy. I wouldn't invest anything until the house were paid off. That will sound very conservative to many people, but mortgage rates won't stay low forever. It's nice to think that your home payments could currently take huge amounts off the owed mortgage principle right now.

  53. Hi Melvin,

    Thank you for the comment and question.

    I have a friend in my condo who I have helped purchase the Singapore bond index (he's even more tech illiterate than I am so he usually needs help). We haven't had troubles making purchases, but if you are concerned about liquidity, there may be another Singapore bond ETF available with higher volume. If you dig into it, and find some comparable with higher trading volume, please drop me a line and let me know. Thanks Melvin.

  54. Hi Wouter,

    Thank you for your question on my blog. It's good that you're continuing to read about this stuff. As for the article, here's the main point I think we should be aware of: What's the alternative to the index, and has that alternative proven to outperform the index in each respective asset class? In each respective case, the vast majority of actively managed money underperforms its respective benchmarks after fees. Can you academically dissect something you don't like about indexes? Perhaps. But the bottom line is based on probabilities and profits. And we know where the probabilities of profits are highest: with diversified accounts of indexes, rather than with diversified actively managed funds.

  55. Hi Bill,

    First of all, my apologies for missing your question many months ago!

    The world could go off a cliff, and people have always (during every era) predicted the end of the economic world as we know it. Let's take another 1930 scenario. If it were repeated, stocks would fall far faster and harder than government bonds (which would also fall). I would rebalance, selling some bonds to buy stocks as they fell, just to rebalance. Including dividends, the markets that fell 90% in 1929/1930 had recovered roughly 15 years later (including dividend reinvestment). During this recovery, that rebalanced money that you threw into stocks would make a fortune if the same magnitude of crash and recovery happened today. Of course, the next big crash could be even worse. And if it is worse, I suppose real estate would crash with it. In that case, I could always sell my bonds and buy cheap farmland to live off. Thoughts?

  56. Hi Agnes,

    WIth DBS Vickers, they recently made it a bit tougher for new investors as well. But they brought forth a test that you have to pass, and then, regardless of experience, you can trade once you pass it. I've heard that it's quite easy. Does Standard Chartered now offer something similar to allow for new trading clients? If not, you might want to look into DBS Vickers.

    Thanks, Agnes, for the very kind words about my book. I'm glad that you found it inspiring and informative.


    • Wouter says:

      Agnes, Andrew,

      I passed this test last month. First it looked scary as you need to get 18/20 questions correct, and it includes questions about callable Bull Bear contracts and other things I never plan to use. But most questions are pretty easy and if you should be able to pass it easily if you're careful.

      I had to do this test through SGX, so I would assume that this is not only for DBS Vickers, but for all new trading accounts in Singapore, if you don't have sufficient trading experience

  57. metta says:

    Thank you Andrew! I just finished reading the book Millionaire Teacher and came away feeling grateful to your great sharing!

    I am 51 years and sort of in semi-retirement for 2 years now. Taking on part time jobs now and then to pay pub bills while spending time on volunteer work. Which means I no longer have a fixed and stable income.

    I have some savings. Also I am thinking of liquidating my unit trusts and start building towards a portfolio of 40% Singapore Bond Index, 30% Spore Stock Index and 30% World Stock Index.

    I have 2 questions:

    1.To maintain a healthy portfolio, I would need to be able to top up the fallen index. So if I just sell the higher index to buy into the lower index, would this alone in the long term bring in good returns or is it inconsequential? Do I need to put in fresh money to bring in good returns?

    2. What percentage of my total savings would you recommend to use to build an investment portfolio and what amount to be allocated to inusrance etc ?

    Thank you for your time and great sharing.

    Sharing is caring indeed!


  58. wgleo says:

    Hi Andrew,

    Just finished reading your book. Another great book which teaches on prudence and frugality.

    Just want to ask:

    1) For a 20 year old in Singapore, what are the different brokerages available to buy the ETFs? (I am currently using POEMS but it has a minimum commission charge of $25)

    2) If I am able only to invest $300 every month, how am I able to practice dollar cost averaging?

    3) Is it true that the minimum lot size is 1000 shares to buy?

    Thanks for your time and knowledge.


    • Kevin says:

      Hi wgleo,

      If you don't mind me helping with the questions –

      (besides having Andrew's advice below)

      [1] If you're worried about the commission, Standard Chartered charges 0.2% with no minimum.

      [2] Nikko AM Singapore STI ETF minimum lot size is 100 shares, so per trade is about $300 currently.

      [3] see no. 2

  59. Hi WGleo,

    Some of my readers have suggested that Standard Chartered is more economical for small investment purchases, but I haven't looked into it. I use DBS Vickers, and I also pay a $25 commission for each purchase. But…I save up my money so the commission doesn't take a huge bit out of my deposit. The least I have ever invested has been $3000. Perhaps you could set a rule of thumb not to give up more than 2% in commissions. So if you pay $25 U.S. in trading fees, you could decide not to invest less than $2,500 at a time. At 20 years of age, you're starting off with a great headstart. I know this sounds hard, but perhaps you could save hard for 6 months, come up with $3000, and make a purchase. Then save hard for another 6 months and make another purchase. Because you're just starting out, I wouldn't get too carried away about the rebalancing aspect. Just start collecting these assets: the Singapore index, then the world index (while, perhaps, your CPF can constitute the bond component, because it's safe). And you can just alternate purchases between the Singapore and the world stock index (ticker VT on the U.S. exchange for the world index). Think of yourself as a collector. Then, when your account grows to about $20,000, you can rebalance it once a year. It won't take long. I think it's awesome that you're starting so young. Keep up the great work!

    • My aplogies on the math up there. If you invest $2,500 U.S. (equivalent) and pay $25 in commissions, you're giving up 1% of your investment to the commission. I think young investors could set a max of 2% as a maximum acceptable amount to pay in commission. But not with companies like Fundsupermart that often charge 2% for you to buy a product with an expense ratio of 1.5%. The expense ratio, of course, is the far more damaging fee because it comes off your total account value every year. The commission upfront is a drag, but you only pay it on each purchase. And if you buy ETFs, the expense ratio will be very very low.

    • wgleo says:

      Andrew, thank you for your reply.

      From what I know, the minimum age to open a Standard Chartered account is 21years yet I'm only 20. So for now, I can use your method of investing into the ETF. Yet if I turn 21, I should switch the using Standard Chartered to keep my costs low, as what you have taught, should I then switch my funds to Standard Chartered by selling in POEMS, and then buying in Standard Chartered, since the compounding effect has already taken place? For instance, if I am now 21 years old with $10000 in my POEMS account, should I transfer the $10000 worth of shares to my Standard Chartered account so that the compounding interest can start with a sum of $10000 instead of $0 in the new Standard Chartered account?

      Also, are all ETFs which track the Singapore Index the same? Are all the expenses the same?

      Thanks and I wait eagerly for your reply.

    • Ganeshwara Herawan Hananda says:

      I think they are going to introduce a minimum fee of around $10 (on whatever currencies that you are trading on) starting from August: https://www.sc.com/sg/personal-banking/investment/online-trading/fees-and-services/

  60. Danielle says:

    Singapore doesn't seem to have any savings accounts that earn even 1% interest. Am I just not looking hard enough or using the wrong terms? Would it then make sense to just put all our savings into the Canadian Bond while we save to buy an apartment?

    • Hi Danielle,

      That would make sense if you are saving for a Canadian home. However, if you are saving for a Singaporean home, it would be better to keep short term money in the currency that you'll soon be spending, even if the interest rate is very low. When I say "soon" I'm thinking of a period of five years or less.

  61. Hi Metta,

    If you aren't adding fresh money, then rebalancing your account once a year would do just fine. As for the amount you want to save, that's up to you. I don't actually have insurance, other than medical insurance. The best insurance, I think, is being debt free and having money in the bank/investments.

  62. Neil Lindholm says:

    I have a question about taxes. I am looking into opening an account with HSBC in Hong Kong, which allows non-resident Canadians access to the Hong Kong and US stock markets. I will have access to Vanguard ETFs which is okay. They told me that I might have 30% tax withholding depending on what kind of funds and stocks I purchase. As a non-resident Canadian in mainland China, will I have withholding taxes if I purchase ETFs from Vanguard while in Hong Kong?

    As well, do you know of any good ETF companies based on the Hong Kong stock market?

  63. Hi Neil,

    There's no escaping the 30% witholding tax on dividend income, but in the big picture, it's peanuts. If you make 10% on your Vanaguard ETFs, roughly 8% of that will be coming from capital gains (which will be tax free) and roughly 2% of that will come from dividends. You'll pay 30% tax on your 2%, taken from source…nothing to file, the IRS just removes it right away. So….you might gross !0%, and after taxes, you would make about 9.4%. It's still a great deal. As for the Hong Kong stock exchange, I know nothing about it.



    • Neil Lindholm says:

      Thanks Andrew. I am heading down to Hong Kong in a few weeks to open an account with HSBC (their SmartVantage account). It seems like a good way to start, although not perfect. Kind of tough over here in mainland China to have easy access to different opportunities. I can open a savings account, with debit card and credit card access, as well as the ability to purchase stocks on the HK and US markets. I was hoping or access to the TSX but it is not to be. I will look at the Vanguard funds you discussed in your book as well as look into some of the HK ETF funds available. Most of them are for China and Taiwan though and I am leery. Once I get some money put away, I can always look at other options that provide access to the Canadian markets. Right now, I can load up with cash and fly down to HK every six months or so. Wire transfers can be problematic over here and since HK is the easiest to get to from China, I will start there.

      • Sounds great Neil. Keep in mind that with access to the New York stock exchange, you can buy virtually any index (ETF) you want, including a Canadian stock market ETF. http://sg.finance.yahoo.com/q/bc?s=EWC&t=my

        It's great that you have this option.



        • Neil Lindholm says:

          That's good news. I searched on the HSBC US market page for some Canadian ETFs you suggested but had no luck. Looks like they trade under different names on the NYSE compared to the TSX. Will have to do some more research.

          Thanks for the help.

    • Ivan says:

      Hi Andrew, I’d like to address this statement you made about the (lack of) importance of dividends: “but in the big picture, it’s peanuts.”.

      “Over the long term, dividends have been critical to total return. From the end of 1929 through March 2012, reinvested dividends provided almost half of the S&P 500 Index’s total return, or a 9.4% annualized return versus a 5.2% return for price appreciation alone.”


      I understand this to mean that reinvested dividends account for an additional 4.2% point growth in the S&P 500 over 5.2% for capital gains alone to total 9.4%. I haven’t done the math but if you lose 30% of your dividends to withholding tax, I think it would have a very significant impact on your overall return.

      Moreover, for small time investors in Singapore, after paying the 30% tax and dividend processing fees, the amount they will have left over might not even be enough to pay the commission to reinvest/buy new shares. I suppose the solution to that would be to put the amount somewhere else to accumulate for awhile.

      Secondly, I would like your opinion on Deutsche’s Luxembourg domiciled, swap based synthetic ETFs as a solution to the above problem. I beleive that these ETFs (like J0P db x-trackers MSCI World Index UCITS ETF and K6K S&P 500 UCITS ETF 1C) do not pay dividends since they are indirect replication. Income treatment is capitalising/reinvestment instead of distributing. If my goal was to reinvest all dividends for maximum long term compounding, would these ETFs be a better alternative?

      I know that US-domiciled Vanguard ETFs are generally the best, but these Deutsche ones are domiciled in Luxembourg (15% withholding tax) and listed on SGX (low commissions).

      I like the idea of VT too, as I know you do. It has an expense ratio of only 0.17% right? However, I calculated the Tax Withholding Ratio (TWR) of VT and found it to be 0.69% (based on 30% withholding tax), putting VT’s total expense for a Singapore investor at 0.86%, a far cry from 0.17%. At a (hypothetical) 6% growth over 25 years, 0.86% expense as opposed to 0.17% equals a reduction in total return by 21%.


      TWR formula: https://www.bogleheads.org/wiki/Nonresident_alien_with_no_US_tax_treaty_%26_Irish_ETFs#Calculating_tax_withholding_as_a_ratio

      • Ivan,

        First, make sure you don’t buy off a U.S. exchange. That rules out VT or any U.S. stock. By using such products, you put your heirs at risk of paying U.S. estate taxes upon your death. http://andrewhallam.com/2014/01/expat-index-investors-should-duck-u-s-estate-taxes/

        If you buy swap based ETFs off a different exchange, you won’t pay dividend taxes (nor would you risk U.S. estate taxes). But you would be taking counterparty risk, considering that those holdings are synthetic, not physical. If the bank gets into trouble, you could lose your money. I’m not saying that the risk isn’t worth it. It’s just worth considering.

        You could alternatively buy ETFs off different exchanges, as briefly mentioned in the article I linked to.


        • Ivan says:

          Hello Andrew, thanks for the reply and the good advice! So it seems certain that for swap/synthetic ETFs do not pay dividends since they don’t actually hold the securities of constituents in the index it is tracking. But does that also mean it does not pay any tier 1 tax?

          In the (K6K) S&P 500 UCITS ETF 1C example, a swap ETF domiciled in Lux and the counterparty bank also being in Lux, would the ETF have to pay any Tier 1 dividend taxes to the US since it is tracking a US index? If there are no dividends received by the fund per se, does that mean that “dividends are reinvested” simply means that the ETF is replicating the actual returns/performance of the fund as if dividends were reinvested?

          • Hi Ivan,

            It’s synthetic, so there would be no dividend taxes of ANY kind. Investors get the total return of the market as if dividends were reinvested. But make sure that you are aware of the counterparty risk.


  64. James says:

    Hi Andrew,

    Perfectly enjoyed reading your book and planning to build my index portfolio now. Plan is:

    a) STI.ETF: 40%

    b) Bond Index ETF: 30%

    c) Vanguard Total World Stock Index Fund-ETF (VT) : 30%

    I find the Singapore Bond Index A35 liquidity really low, hence looking for other alternatives like Vanguard Intermediate-Term Bond ETF (BIV). Like it for the higher coupons given that short-term gov bonds coupons are extremely low. What is your view on this ETF?

    Also considered Vanguard Short-Term Corporate Bond ETF (VCSH) but not sure how it can be traded from Spore. Many thanks!

  65. Raymond Lee says:

    Hi Andrew,

    A big thank you for the wonderful book especially regarding using only 3 index ETFs for Singaporean investors.

    Believe you hv very good reasons for below allocations ;

    1. Bond portion only in ABF Singapore Bond Index Fund and not the more diversified ABF Pan Asia Bond Index Fund listed in HK (stock code 2821) .

    2. equal equity allocation between STI Index and World stock Index.

    Kindly enlighten us the reasons for our better understanding.

    Thank you,


    • Hi Raymond,

      The ABF Pan Asia Bond index fund would work as well. I just wanted a local currency denomination, but it's not a huge deal. On another note, you may consider skipping the bond allocation completely. After all, you have your CPF, if you're Singaporean. You can't rebalance that one, but you can rebalance your equity ETFs between themselves.

  66. May says:

    Hi andrew,

    how do you decide when to buy an index? I.e. How do you decide whether the price per share of the index is too high, acceptable or very low?

    I don't want to buy it when it is overprice. Hope you understand that.

    I am currently looking at VTWSX Vanguard total world stock index.


    • Hi May,

      The best time to buy, I believe, is when you have the money. Then add regularly to it, so you get a below average cost over many years. Speculating (I don't believe) is a very good thing. But dollar cost averaging or (if you want to be more sophisticated) value averaging, is a very good thing. If you look up "value averaging" you'll find a very fascinating method for regular purchases over time. I think you'll like it. Check it out: http://www.investopedia.com/terms/v/value_averagi

      • May says:

        Hi Andrew.

        Indeed, the value averaging method is interesting and seems to present a more cost efficient way of investing.

        Here are a few questions that I have after reading about the VA method

        1) How do you actually determine the amount required returns for every investment period? As far as I understand, the amount of required return that the investor expect directly affect the amount of investment within each period.

        2) What happens when the market price of the VT ETF under perform consistently and you end investing more and more within each investment period? At this point of time, should you readjust the amount of required returns (which will defeat the purpose of value averaging) so that you don't end up investing more and more each quarter?

        3) What happens when the market price of the VT ETF over perform consistently and the amount of investment required for that investment period falls below $3000? If I am not wrong, there is a minimum investment of $3000.

        In both cases (2 &3) above, I face difficulty in performing value averaging. The dollar cost averaging method seems to be a much simpler, although less cost efficient, way to invest.

        Another question that is not related to VA method. I've read about how you suggest CPF as our bond allocation. In this case, we will rebalance our equity ETF between themselves.

        So,what should you do if your ETF allocation is growing at a faster rate relative to your bond allocation (CPF)? Should you , 1) increase your CPF contribution such that your amount of bond allocation increase, 2) buy bond ETF such that your total amount of bond allocation increase, or 3) Sell your equity ETF such that your ideal balance of ETF is achieved?


  67. Hi James,

    Vanguard's intermediate bond ETF would be a good option.

    Just a thought. If you are Singaporean, you could count your CPF as your bond. Of course, you won't be able to rebalance with it, but you could rebalance your other ETFs (the stock ETFs) between themselves and choose not to buy a bond index at all, considering the guarantee of the CPF itself. What do you think?

  68. Bernard says:

    Hi Andrew, it's very insightful reading yr posts. I m turning 40 this year and am trying to adjust my finances . Have read great things about etfs. I have just started trying to build my investment portfolio, any advice on how I can start? I currently have some shares on the Nikko AM STI shares and 3 other losing shares.

    • Hi Bernard,

      You could just build a diversified portfolio of ETFs across different sectors, and then hope they drop in value. As such a young man, you should hope that the markets are lower, 10 years from now, not higher. You are, after all, going to be a collector, not a seller.



      • June says:

        Hi, had read your book and really liked it for simplified way of explaining stuff. I've got a question.

        For someone who's starting to invest in their 30's and 40's, would you have a different advice from apart from matching the age with the bond % ratio? Afterall being in the 40's and having a higher chance of getting retrenched as compared to one in the 30's, it seems there's more catching up to do given the 10-year shorter time frame. Should we be slightly more agressive or agile with our investment holdings?

        Looking forward to your enlightenment. thank you.

        • Hi June,

          You have asked a very good question. Many people who start late consider taking a riskier strategy to catch up, but studies show that this isn't a good idea. If the markets fall when you are 50, and you have taken an aggressive strategy, your account will fall dramatically. Consider your CPF to be your bond portion though. If this is the bulk of your invested money today, then you could add plenty of equity index money. But try to ensure that your fixed income (bond or CPF) is never less than your age minus 10. For example if you are 40 years old, ensure that your bond/CPF money never comprised less than 30% of you total. It's a good rule of thumb to go by.



  69. Danielle says:

    Unfortunately, we are thinking of Europe. I don't think right now is a good tome to purchase bonds in Europe for a short term investment. Would it be best to then buy a Singapore bond since we're living here?

    • If the home will be in Europe, put the money in the European currency. If the home is Singapore, put the savings in the Sing dollar. If the home will be in Canada, put the money in loonies.

  70. David says:

    Hi Andrew,

    I followed your guide and just tried to buy my first shares: ES3, Qty: 1000 on DBS Vickers. I must say that your guide is more beginner friendly then the on-site 'help'. However, there are some things I still don't know:

    1) what is bid/ask price and vol?

    2) for the Limit price we should fill in the last-done price right? for example, when I was doing this, the last-done price was SGD 3.010 , the bid price was 3.000 , the ask price was 3.020 . So should I fill in 3.010? But I have the impression that bid price is actually what everyone else is currently willingly to pay for the stock. So should I fill in 3.000 and possibly get the 1000 shares for a lower price?

    3) what exactly is order type?

    4) order duration: when I was doing this, it is 10pm at night and the "market is closed", and so the system prompted me that this transaction will be processed tomorrow. However, the order duration is still reflected as 16 April 2012. Will this transaction be eventually cancelled?

    Please forgive my technical questions.

  71. Danny says:

    Hi Andrew,

    I am reading your book now (bought via kindle amazon) and it's really easy to read.

    But I have the following concerns and questions that I hope to share with others and maybe you can help to answer them?

    I'm currently 36 years old and would like to start investing now so I can have a comfortable retirement in 20-25 years time. Let's just say I have $50k cash to invest.

    1) Do you I invest all of them one time into the 3 funds you suggested (A35, ES3 and VT)? Or do I wait for the stock market to drop say by 5% before I go in?

    2) If I'm 36, then the bonds percentage of the total portfolio should be around 30%?

    3) And I know because the cost structure of buying index funds in Singapore is high compared to US, so if I were to invest annually say $10k, will it be regular enough compared to monthly as advocated?

    4) What do you think is the success of the above approach compared to buying only ST bluechips which gives dividends annually compared to index funds which does not pay out dividends?



    PS: I'm glad I found your book because other financial books is so boring to read that it gives me headache with their complicated explanations of portfolio building, selection and balancing.

  72. June says:

    Hi Andrew,

    Thanks for the reply.

    I'm also keen in European and Japan index fund, especially with the current weak economic sentiment. Any recommendations or options I can take ?

    Lokking forward to your enlightenment.


  73. Andrew says:

    Hi Andrew, 

    I read your interview on bigfatpurse.com and ran to Kino that night to pick up your book (finished it in two days). The example of the Canadian-Singaporean couple absolutely floored me, as it is exactly the situation I am in right now. 

    Given that I am a 30 year old Canadian citizen/Singapore PR and my partner is a Singaporean herself, we were thinking of the following allocation:

    40% world index fund (VT)

    30% STI.ETF

    30% XIC (Canadian index)

    I did not include a bond component as we both have our CPF accounts. We are not sure where we want to retire however (Singapore or Canada), so is it prudent to also invest in a bond index?

    Likewise, if we intend to purchase property in Singapore in a couple of years using our CPF, would it be better to get a bond index or will having the income invested in property suffice if paid with our CPF. 

    The example of the couple in your book did include bond indexes. Not sure if Gordon is also a PR. 

    Thanks so much for your time and your book!

  74. JONATHAN says:

    Hi Andrew ,

    After reading your book , i feel really inspired to start on index trading. The thing is my capital is not alot , but i can afford a monthly contribution of $1000 . Is there a package to cater for my way of investing ?And if so , how do i get started ?

    Thanks for your time and knowledge 🙂

  75. Zhiwei says:

    Hi Andrew,

    I brought your book and it is really simple to read and open up my eyes to the world of investing. I was putting my money into actively managed funds and was very disappointed at the negative returns and decided I must learn more and take control of my money rather than trusting it to some financial advisers who are probably more interested in the commissions.

    I have already brought the STI but I have a question about A35 bond. What's your opinion of the A35 bond index? Is it performing similarly to the bonds elsewhere in the world? I have read a few comments on the internet about the poor performance of the bond so i'm a bit worried.

    Also do you think the performance of the CPF (annual 3.5% interest for the first 60k and 2.5% beyond 60k) will be better than that of the A35 bond index? I'm considering between A35 or CPF funds.

    Appreciate your help and great book once again. Hope it will help my finance.

    • Hi Zhiwei,

      I do think the CPF option which pays 3.5% for the first $60K is an excellent option.

      • Zhiwei says:

        Dear Andrew,

        Thank you for your reply. How do you think I can rebalance my portfolio if the bond portion is in CPF? CPF money is basically untouchable until we are too old.

        Do you recommend buying overseas bond index? I would really like to have an option to sell my bonds and buy into stock when the market is down.

        • Hi Zhiwei,

          You can't sell your CPF to rebalance, but you could use something called "value averaging" to gain advantage of volatility among your equity indexes, and value hunt while you're adding money to your account. Google "Value Averaging" to see what I mean.

  76. Teo says:

    Hi Andrew,

    Thanks for your insightful book and the generous sharing here.

    My question is related to the use of Singapore CPF for investment. We are aware of the high cost (and many under-performing) of investing in the CPF-approved funds – it is pretty sad that we can't use the bulk of the CPF for investing directly into the ETF. I have been struggling with the thought of using CPF to invest although I had the experience of making some money (more than CPF 2.5%) and many bad ones as well.

    My thought is that while we are now fully aware of the option of investing in ETF using cash, shouldn't we use the CPF OA very selectively into the UT which can generate more than 2.5% annually over a long period of say 10-15 years? Although we are aware that we are openly robbed off through the higher ER, as long as we can get more than 2.5%, we could try. I have not been able to find many good ones, but to my knowledge and experience investing cash in the following 2 UTs, I thought the return (over a long period) is ok:

    1. Aberdeen Pacific Equity Fund (ER +/- 1.76% !)

    2. Schroder Asian Growth Fund (ER +/- 1.28% !)

    I really hate to let them have more money through management charges, but the rules limits what I can use the money for. For a long while since reading about John Bogle and Vanguard years ago, I believe in indexing. But at that time, I was not aware much about ETF.

    I was also fascinated by your suggestion to use CPF as the bond portion; I thought that's simply genius! as long as we are ok with 2.5%. Are there any other options with using the CPF monies?

    Thanks in advance!

  77. Zhiwei says:

    Dear Andrew,

    Thank you for your precious time again! Can you help me take a quick look and see if my idea of value averaging is correct?

    Let say my equity target is 50% in STI and 50% in World Stock index. And in 3 months time, when i'm about to invest money again, I see that the overall portfolio for STI dropped to 40% and World Stock index increased to 55% in a month.

    So using value averaging, I will buy 60% STI and 40% world stock index? Hope I got it right? i'm such a newbie at this. Thanks once again!

  78. Lucas says:

    Hi Andrew! As many others have already done, I would like to thank you for your amazing book as well. I believe it has thought me more about smart investing in 2 days, than my 3 years in business school.

    Anyway, I got excited (okay, i got REALLY excited) and opened a DBS Vickers account yesterday. When I read your blog, I saw some of your readers comment about SCB's cheaper trading fees, so I opened an SCB trading account too!

    Here's the revelation that I would like to share. While speaking with the SCB representative over the phone, I asked her how the brokerage fees would be paid. I had the impression (probably a very wrong initial impression I must admit) that the 0.2% would be of my total portfolio, paid at the end of the year. She clarified that there is zero commission on all transactions and the 0.2% brokerage fee would be paid per transaction.

    So far so good, all according to the website. Here's where she slipped in the line

    "… but there's a minimum of $30"

    It sounds totally different now! I had intended to start small and invest like $300 a month! So if I invest $300 per trade, the 0.2% (60 cents) actually doesn't apply and I have to pay $30. So that's 10% of fees right?

    Please correct me if I'm wrong. To actually benefit from the 0.2% brokerage fee, doesn't that mean I have to invest a minimum of $15,000 per trade?

    Can existing SCB account holders verify this?

  79. Zhiwei says:

    Hi Andrew,

    Negative.. For $3020 worth of order, i was only charged 6.04 commission, 1.21 clearing fees and 0.50 GST.

  80. Rachael says:

    I'm looking to find out more about the Standard Chartered online trading offering vs the DBS Vickers option. Could you please send me the link to the article that you wrote about Standard Chartered? I've tried searching for the post but have had no success.

  81. Lucas says:

    Thanks for clarifying. My trading account on Standard Chartered is up and running. I used the Fees calculator to give me a quotation on 1000 lots of STI ETF, and yes, there was no mention of a minimum $30 fee. Goodness… Wonder what the Customer Service rep was talking about.

  82. Angus says:

    Hi Andrew,

    I have a burning question. I have readed your book on Index Investing.

    By investing a portfolio and allocation of

    35%Singapore Stock Markket Index,

    35%Singapore Bondex Index and

    40% World Stock Market Index.

    By doing this, how do we ride through out the turblent times and earn the returns.

    As the whole world economy is not doing well and all assets of Diversification like

    Commodity, Stocks and Bonds are not doing well.

    • It's good that they haven't been doing well Angus. You are buying assets…representing real businesses. And those businesses, as an aggregate, are more valuable every year. Do you recall the dog on the leash analogy from my book? I don't want markets to do well any time soon. I'm a collector. Market prices always reflect aggregate business growth. When markets don't move up for many years, it's good for asset accumulators. Likewise, it would have been better to have been collecting Singaporean real estate when it wasn't doing well. Buying it when it "does well" is a fool's game. As Benjamin Graham used to say, you pay a high price in the stock market for a rosy consensus.

  83. Angus says:

    Hi Andrew,

    I have finished reading your book on the nine rules. May I know by diverisify our portfolio to index funds like:

    35% Singapore Stock Market Index

    35% Singapore Bond Index

    30% World Stock Market Index

    I have one question:

    How are we going to tide out these turbelent times when diff. of assets classes

    like Commodity, Bonds, Equity and Currency are inter-correlation and not doing well.

  84. KC says:

    Hi Andrew

    Thanks for your guidance. I am using POEMS platform for investment . I could find the ETF that you indicated above, instead I find Shares MSCI Singapore Index Fund

    Is this identical? If not , could you advise the above ETF for an investor using POEMS platform?


  85. phyllis says:

    Hi Andrew,

    I have just finished reading your book. It is really a good book. I intend to practise index investing.

    You advocate asset allocation : a bond etf, SPDR sti etf and a international etf.

    I found these world etf on sgx. Is it ok to buy them? DBXT MS World etf and Lyxor MS World etf. Can you advise which one is better to buy?

    Thank you

    A newbie investor


  86. Lynskey says:

    Hi Andrew,

    Thanks, i've learnt a lot from your book. I am currently 40 years old and intend to invest in the following portions for my portfolio. If i have $100k to start with, should i purchase them in % portions as below ? What would be the best way to speed up to earn a higher compounding interest for the capital, will it help if more capital is injected ?

    30% in the Singapore Bond index (A35)

    35% in the Singapore stock index (ES3)

    35% in the world stock index (VT)

    Thanks !

  87. Harum says:

    Hi Andrew,

    I am in the middle of reading your book and I am enjoying it very much. You presented the information in such an easy-to-read manner and honestly, the reason I picked it up was because it was catered to international readers. Very often personal finance books focus on Americans which makes it very hard for me to relate and apply, since I am a Malaysian.

    Anyway, I am in my mid-twenties, worked for a few years (and spent it all unfortunately, wished I found your book much earlier), and now I am broke and back in school. I will be moving to Europe for my studies, and I am a bit of a loss on where I should invest in once I do get some money, whether in Europe, Singapore or Malaysia. I hope I will gain more insight on this once I finish your book.

    Is there an equivalent of DBS Vickers in Malaysia? if I do invest with DBS, are they hidden or not-so-hidden charges for taking the money out of Singapore that does not make the investment worthwhile?

    Thanks so much!


    • There are no hidden charges for moving the money Isma. And sadly, there's no Malaysian equivalent that I know of. Friends living in KL came to Singapore to open their investment accounts. And they wire money here each month. I'm glad you like the book!



  88. chris says:

    Hi Andrew,

    I just finished reading your book. Thanks for sharing – it is a really good book. I'd like to ask 2 questions:

    1. It seems to me that that the underlying assumption for this to work is that the index grows over the long term. I'm just concerned long term may be beyond my lifetime to see the return. If I look at the STI index, it's like a cycle and say after investing for 20 years, the index may come back to square one. Say STI index is 2600 now- over the course of the next 20 years, it goes up and down and if by the time I reach retirement age 20 years later, it's at around 2600 level. Would this mean, that my investment has not really grown at all even if I have invested regularly over the last 20 years?

    2. If I invest monthly, is there a min sum I should invest because the transaction cost may be high (e.g. min amout is SGD30), so if I invest SGD100 a month, the commission is abt 30% . If I invest SGD500 a month, the commission works out to about about 6% , which is still very high? In view of this, should i invest every 3 months so that if I invest more, the commission works out to be a smaller % of invested amount?

    Thanks very much!



    • Hi Chris,

      You're right about the commissions. Save your money so you can make the purchase worthwhile. As for the markets movements (or lack of movement) here's an important thing to keep in mind. If dividend yields are currently 4% on the Singapore market, we know that, as an aggregate, businesses increase their payouts. If the Singapore market stayed put, and you were able to buy it ten years from now at the same price it trades at today, the dividend yield would likely be 7%. If the markets stayed put for 20 years, you'd have a dividend yield of roughly 11%. This is where you would make your money, by reinvesting dividends, which would throw off more dividends…check out business' dividend payouts, You'll see that, as an aggregate, they increase. The dividend yield will only increase if the stock prices remain the same (or fall). But the dividend payout will increase (on average) regardless, if you consider the entire market.

  89. Harum says:

    1. If one invests with DBS Vickers, is it through a broker or not? I noticed that you can choose either option. Is eliminating a broker part of the point of going down the index route? Or do we still need brokers but definitely not fund managers? 

    2. It was very hard to find information on investing in Index in Malaysia, but I found this blog that says that even though the advise to invest in index funds may work in USA, it might not be the same in Malaysia, mainly because the costs are higher. I could not find any information on index funds, but  a few websites on ETF cited 0.5%. If the costs are higher in Malaysia, should I still invest, or should I look somewhere else, like Singapore, US, Australia or Europe to invest in their indices?

    Blog : http://calltoreason.org/?p=3461

    3. Since there are crises in Europe, does this mean it is a good time to buy?

    4. I have an option as a Malay in Malaysia to invest in an account (Amanah Saham Bumiputera) that has 5-8% annual dividend. Isn't this a better option? How does this compare to index? Will I generally gain more from indices? 

    • Harum says:

      5. Oh, and forgive me but I am confused. Is there a difference between ETFs and Index funds? Because Bursa Malaysia seem to differentiate between them. Just as a reference : http://goo.gl/c31bCc

    • Harum,

      You'll gain much more, long term, by building a low cost portfolio of indexes. Doing so in Singapore would likely be your best option. ETFs are exchange traded index funds that trade on the market. Index funds are the same kind of product, but you buy them a different way. I buy ETFs because there are no cheap index funds in Singapore. And most importantly, skip the broker.



  90. Cheryl Lee says:

    Hi Andrew

    Thanks again for your replies – you have been most helpful!

    Looking at this page, I will probably go with the Singapore Bond Index for the 100 grand I have – from a "50 year old" perspective. 🙂

    And just looking at what you advised Natalie – seems great for me too, as a 30 year old who wants to stop paying financial advisers exorbitant fees! 🙁

    22% Singapore bond market index

    38% Singapore stock market index

    20% U.S. stock market index (VTI)

    20% First world international stock market index (VEA)

    Thanks again for taking the time to read and reply – truly truly much appreciated!

    I read about your personal life stories and I wish you from the bottom of my heart the very best that life can offer – like you said – LIVE LONG & PROSPER!


    Shulin 🙂

  91. Lucas says:

    Hi Andrew,

    I was looking through Morningstar's ETF list and I noticed that Deutsche Bank has a world index, ticker symbol J0P, listed on the SGX.

    Wouldn't it then be easier to buy a global stock through the SGX rather than having to open a foreign account?

    However, I also noticed that it is listed as a 'synthetic ETF'. I read up the definition on investopedia and some articles on the Financial Times. However, it doesn't seem to have a very good reputation.

    Could you help me understand why a synthetic ETF is not as favorable as a physical ETF? It looks pretty enticing to me.

    thanks for your advice!



    • Hi Lucas,

      From what I understand, it's a bit like a bank's promisory note, suggesting that the bank will reward you with the ETFs gains or losses, without actually owning shares within the index itself. If the bank goes under, the ETF may be at risk. My neighbor, who works for a Singapore bank, has gladly built a portfolio with such indexes. I, however, am gun shy to do it. If you feel comfortable, then go for it.

  92. farah says:

    hi andrew,

    i first read about your story in Sunday Times and loved it! so then i went to buy your book 🙂

    question: in your book, you advise having money automatically channeled into investments every month. but in this blog post, you recommended spending at least $3,000 through DBS Vickers each time.

    are there any options in sg where i can buy index funds in small batches? i'm thinking of setting aside abt $100-$200/mth into this, which will eventually serve my retirement. (i'm 24 and earning fresh grad pay.) otherwise, should i just save harder and wait till i have at least $3,000 and perhaps transact only once every year?

    appreciate your advice, thanks!

  93. Melvin says:

    Hi Andrew,

    just a quick question though, what would be the ideal commission rates/charges for a retail investor?

    Also, what sort of expense ratio should we be looking at when we trade ETFs.

    • Hi Melvin,

      If you're paying more than $30 USD for purchases less than $40,000 then you're paying too much, I think.

      My most expensive ETF charges roughly 0.2%. I don't think there's a good reason to pay much more than that for an ETF. Definitely cap it at 0.4%.

      • Harum says:

        Hi Andrew,

        You've recommended that we spend a minimum of $3000, and Vickers would charge $25, isn't that already too high at 0.83% ?

        • Harum says:

          1. When you say minimum $3000, is that SGD or USD?

          2.The yahoo website states USD price… so we have to convert that to SGD first in order to see what we can afford, assuming that your answer to no. 1 is SGD?

  94. Hi Farah,

    Based on the limited low cost options in Singapore, it may be best for you to save your money and make a $3000 purchase, rather than opting for the convenience of paying a much higher expense ratio.



  95. James says:

    Hi Andrew

    Thanks for your generous sharing.

    Regarding the ABF SG Bond Index Fund, may I know how often do you receive the interest payout and what is the yield like?

    I have a similar question on the STI ETF in terms of frequency of dividend payments and yield.

  96. Harum says:

    Just found out that as a Malaysian, in order to open a bank account with DBS, (a requirement to open a bank account with Vickers), I have to maintain a bank account balance of $5000. That's RM 12,500! My first planned investment was even less than that! Now I have to save for this just to have it sit around in order for me to trade. Isn't this considered cost, and quite a high one at that?

    Any foreigners found a way around this? I was all set to fly off to Singapore, but now it just might not happen!

    • Hi Harum,

      I'm sure glad you didn't fly without checking. Yeah, you'll either have to save more money, or try Standard Chartered Bank. If you read through the older comments on this post, you'll see what some other people discussed about lower cost options with smaller invested sums in Singapore. Good luck!

  97. Hi Lynskey,

    It looks like you have a good plan in place. Please don't try to do anything to speed up the compounding process. Building a portfolio can be like making a fine wine. You could take a few shortcuts, but ultimately, you could end up with vinegar. Great investing should be (according to Buffett) as exciting as watching paint dry. If it's exciting, you're doing something wrong. All the best, Andrew

    • Lynskey says:

      Hi Andrew,

      Thanks for your reply. The current price of STI is in peak now, would it be wise to buy in 30k into STI index in one my first single purchase or should i break it into smaller trench of purchase over a few months ? Thanks !

  98. Isaac says:

    Dear Andrew,

    Your book has been a great inspiration. Great job!

    I have a question regarding the ABF Singapore Bond ETF. I was looking at the 5 year price chart on http://www.shareinvestor.com and I noticed that the price isn't inversely correlated to the STI (or the general stock market as a whole), compared with other bond funds. In fact, at times, it seemed to rise and fall with the stock market, though in different magnitudes.


    Would it be better to incorporate a bond fund that moves more inversely with the general stock market, into our portfolio?

    Thanks in advance for your comments.


  99. NGH says:

    Dear Andrew,

    I would like to re-visit the issues with the exchange rate again, since the VTI and the VEA are traded in USD.

    The success of this strategy of buying index fund and re-balancing is based on a fundamental assumption or hypothesis that in the long run, the index will always rise….and we probably have charts and numbers to support that.

    However the same assumption/hypothesis cannot be applied to exchange rate. A good example would be the SGD/USD. I just pulled a 10 year chart for this and the USD/SGD rate has gone from 1.8 in 2002 to now about 1.25…down some 30%.

    So the gain in the index could potentially be eroded by the depreciation of the USD against the SGD. Rebalancing the portfolio for depreciation in the exchange rate doesn't look like a good idea cause the fundamental assumption (of rising in long term) is not applicable for exchange rate, so we are not necessarily buying cheap when the rate depreciates.

    How do we then factor in the risk of exchange rates? Would it not be better for us to invest only in the local market index and bonds?

  100. Hi Issac,

    Bonds won't always correlate their movements inversely with the stock market, but you will notice that they don't drop as much or rise as much when there's stock market volatility. For instance, the STI index could rise 10% and the bond index rise 1%, or the STI drops 10% and the bond index drops 2%. This will still give you the opportunity to rebalance because of the discrepancy of the movement. If you are more comfortable finding another SGD bond index, then go for it. I don't think it would make much of a long term (15 year+) difference, but your comfort level is very important because you'll be the one needing the strength to rebalance when everyone else is going bananas. Good luck Issac. You can do it!

  101. Hi NGH,

    You bring up an excellent issue. If you only invest in indexes representing your home country currency, you won't take any currency risk. But with currency risk comes currency opportunity. There's always a flipside, and historically, currencies fluctuate many times over a lifetime.

    One thing to think about with VEA. It's an international stock index, and although it trades on the U.S. market, it has no connection to the U.S. dollar at all, despite having its price quoted in USD.

    For instance, if the U.S. dollar fell by 50% and the equities within VEA didn't budge in price (in their home countries) then because VEA is quoted in U.S. dollars, its share price (in U.S. dollars) would double if the U.S. double were cut in half.

    As a rebalancer, NGH, you have a wonderful opportunity to convert your holdings into SGD and ask yourself, "OK, this month, how much do I have in this ETF, versus that ETF?" Doing so allows you to rebalance, not only based on the price movements of the respective indexes, but on what currency moves have done to those ETFs as well. For example, if I owned a Canadian stock index and a U.S. stock index (equal money in each) but the Canadian dollar dropped compared to the Sing dollar, then my indexes, in their home countries, may have remained the same, but my Canadian dollar stock index would have fallen, in relative Singapore dollars. This is how I rebalance my money, with an eye on its relative value, based on my home currency (or the currency I make my salary in)—which is SGD.

    • NGH says:

      Andrew, thanks for your reply.

      Your reasoning for VEA sound logical but I am not so sure for VTI which is a US market index. IS there any correlation between the performance of the stock market and the exchange rate?

      In any case, USD/SGD is at a low…so for me I think there are more to gain than to lose buying in USD now….

      • NGH,

        If you keep thinking like a speculator, you will earn the long term returns of a speculator. Many intelligent people (and I think you are very smart) believe that if they speculate and think harder about "angles" or where things could be headed short term or long term get hammered, on a comparative basis, by a diversified low cost portfolio equally weighted for global capitalization exposure. This is one of the reasons the MENSA investment clubs do so poorly, relative to the market. They're TOO smart, so they believe they can speculate and win.

  102. Isaac says:

    Thanks for your reply, Andrew.

    Regarding the currency exchange risks, for someone uncomfortable to take on that risk, would hedging do the trick? Eg. If I have SGD$10,000 (USD8,000) in VT, I could sell $8,000 worth of USD/SGD in a fx trading account to counter the movements of USD. The margin required is probably only a small amount of the $10,000 as fx accounts usually offers high leverage ..


    • Hi Issac,

      Doing so would put you in more of a speculator's camp, I believe, than a long term investor's camp. Between now and when you retire, currencies will bounce all over the place. Rebalance your portfolio so you can take advantage of that, instead of speculating to limit it. You'll make far more money in the long run.

  103. Harum says:

    Hi Andrew, sorry my post below is messy, but I think with the multitude of messages, you missed my comment on Melvin's post below. Do you mind answeri my question? I am really curious. Thanks

    Melvin says:

    June 28, 2012 at 4:37 pm (UTC 8 )


    Hi Andrew,

    just a quick question though, what would be the ideal commission rates/charges for a retail investor?

    Also, what sort of expense ratio should we be looking at when we trade ETFs.

    Andrew Hallam says:

    June 28, 2012 at 11:57 pm (UTC 8 )


    Hi Melvin,

    If you’re paying more than $30 USD for purchases less than $40,000 then you’re paying too much, I think.

    My most expensive ETF charges roughly 0.2%. I don’t think there’s a good reason to pay much more than that for an ETF. Definitely cap it at 0.4%.

    Harum says:

    July 20, 2012 at 4:36 pm (UTC 8 )


    Hi Andrew,

    You’ve recommended that we spend a minimum of $3000, and Vickers would charge $25, isn’t that already too high at 0.83% ?

    Harum says:

    July 20, 2012 at 5:13 pm (UTC 8 )


    1. When you say minimum $3000, is that SGD or USD?

    2.The yahoo website states USD price… so we have to convert that to SGD first in order to see what we can afford, assuming that your answer to no. 1 is SGD?

    • Hi Harum,

      My apologies for missing your question. For expense ratio fees, I don't recommend paying more than 0.4%. As for counting the commissions as part of the annual fee, you can't equate the two entirely. If you pay a commission of 1% on a $3000 USD purchase, the commission is a one-time thing for each purchase, but it doesn't apply to your overall portfolio the way a expense ratio would. For example, even with regular 5.75% commissions (such as many mutual funds charge) it's still cheaper (over the long term) to take that route than buy actively managed funds with no commissions, but with expense ratios that are 0.5% higher than the funds you'd buy with a 5.75% front end load. Commissions aren't forever dragging on your growing capial but expense ratios are. Personally (and it's a personal choice) I don't like paying commissions more than 1%. This would mean a $3000 USD purchase costing $30 in commissions. However, if you paid more, relative to your purchase (more than a 1% commission) it certainly wouldn't be the end of the world if your expense ratio was nice and low. It is, after all, the most important element.

  104. Eliza says:

    Hi Andrew, .my husband and I both work here in Singapore. He's an EP and I'm SPR. We plan to open an account at dbsvikers and invest on the following:

    (age 31 & 32)

    30% to Singapore Govt Bonds Index (A35)

    20% Singapore stock Index (ES3),

    20% U.S. stock market index (VTI)

    20% First world international stock market index (VEA)

    My questions are, are VTI and VEA included under Specified Investment Funds (SIP)? Since ETFs are considered SIP. If yes, do we have to take an assessment in order to purchase these?

    Thanks in advance. Your book is really great!

    • Hi Eliza,

      My apologies for not being able to answer your question. Perhaps, when you look up the answer, you could share it with me.



      • Eliza says:

        Hi Andrew, thank you for your time in replying.

        Do you think the below plan looks good?

        30% to Singapore Govt Bonds Index (A35)

        30% Singapore stock Index (ES3),

        20% U.S. stock market index (VTI)

        20% First world international stock market index (VEA)

        It's a joint account. Our age are 31&32. Can you advise how much % for each stock is recommended? Thanks!

  105. Isaac says:

    Thanks Andrew.

    Is hedging considered as speculating?

    Because if i buy a usd denominated ETF, and simultaneously, by going short in usd, wouldn't I be off-setting any foreign exchange risk in usd? Ie. Not considering any rise/fall in ETF price, if usd strengthens, my ETF makes $, whereas my short position in usd loses $, therefore returns on the movement on usd = zero. Meaning zero exposure in usd.

    Does it make sense? =)

    • I believe that you would be speculating Issac. Any methods used to beat the aggregate returns of an index itself involves a form of speculation. You aren't the first person to try this, to reduce currency risk. Many Canadian based ETF managers have tried this when hedging with a U.S. stock index (to limit the effect of currency swings on the performance). But in each case reported, their long term returns end up being lower, not higher. You can take your chances if you think you can beat the professionals who have failed at this very venture. But as mentioned, you would be speculating, you likely have a day job, and you would have to prove that you're better at it than the reams of professionals who have tried, and failed. You can read an article on the strategy here: .

  106. NGH says:


    Not I am not smart…just trying too hard to be smart…and yes it is difficult to get out of the mindset of a speculator cause it sound so easy to just buy and hold and not do too much….but you have shown us the way…and i shall follow haha…thanks for sharing….

    So I am gonna plan as such:

    40% – SG bonds

    20% – SG Index

    20% – VTI

    20% – VEA

    and now…a little bit in Nokia…highly speculative….

  107. Ray says:

    Wow, was just about to buy the Nikko STI ETF until I read this. Looks like I'll be looking to Streettracks.

  108. Ray says:

    Hi Andrew, love your book so much I bought it for the wife. I've read a couple of books and I have led myself to confusion. I have an OCBC trading platform but only valid for trading locally.

    1. In order to buy the VTI and VEA, I need to inform OCBC to allow me to trade on the US market, right?

    2. I'm really confused at THIS part. Is it BETTER to buy the VTI, VEA rather than the DBXT MSWorld 10US$ (J0P) or Lyxor World 10US$ (H1P)?

    I've crossed out the option of buying the Lion Global's Infinity Series (Vanguard linked funds) because they are……pricey.

    Do hope you can reply to this one.



  109. Jason says:

    HI andrew. I have just recently bought your book. I am currently 19 this year and you really inspired me to making more money after reading your book. But i am still not clear of some things you had wrote. So i hope that you could clarify my doubts. I am not clear of the buying methods and how do i invest if i just have $1000 of savings? How many shares is equal to how many percent that you had bought? Thank you my friend.

    • Hi Jason,

      I'm glad you're inspired to invest. You could save up $3000 and then buy some ETFs through DBS Vickers, as per the example shown here. Or, if you read through the comments above, some Singaporeans suggested some other options that might be worth checking out….brokerages making it easier to invest with smaller amounts. You could, of course, invest small amounts with DBS as well, but the $30 commission would be a big chunk of a small deposit.

  110. Simone says:

    Hi Andrew,

    I've just read your book and wanted to move my investments from the Mutual Funds I've been using for over 10 years (I'm 33) into index funds. Thing is I work in Hong Kong and I'm from Barbados, so my options seem limited. I've checked in HK but they only seem to offer ETFs, and I've checked Vanguard's website comparison of the two (ETFs and Index Funds) but I'm not sure if ETFs are a good way to go. Are you aware of any Index Funds in HK?

    Thanks in advance for your help, and thanks so much for your book – it has really opened my eyes.


    • Hi Simone,

      If you choose the right ETFs, you are actually getting broad based index funds at a very low cost. Low cost ETFs are the greatest things since sliced wholemeal bread with nutritious nuts inside.

      Any brokerage in Hong Kong giving you access to the New York stock exchange would work nicely. Ensure that you don't pay more than $30 per trade commission, however.

      If you don't know where you want to "retire" you could opt for a very diversified global portfolio:

      VT = A total stock market exchange traded index fund (which includes the entire global market, including Asia, Europe, the U.S., China, India etc)

      ISHG = An international bond market index

      SHY = A U.S. bond market index (which you could include as well, if you choose)

      Rebalance these with new purchases or with trading once a year, and you will ensure that you are always greedy when others are fearful and fearful when others are greedy. Be patient. The results may not come immediately. Hopefully they don't! If you're young and buying into the markets (as you and I are) we don't want the markets rising much while we're purchasing. Either way, you will easily beat the returns of those expensive mutual funds you have.

      If you cannot do this from Hong Kong, you may want to take a trip to Singapore, open an account, then wire money here from wherever you are in the world. Many people do this also, and there are no capital gains taxes to pay.

  111. Wee Chong says:

    Hi Andrew,

    I just read your book and it is defintely an best investment book that I had ever read.

    I should had bought it much earlier in order to benefit from your investment strategy.

    Had an quick question. Does DBS Vickers change an monthly holding fee if you bought VT? I am using POEMS now and it charge $2 per month for overseas stock.

    Thank you!!!!

    Wee Chong

  112. Kloud says:

    Hi Andrew,

    Just to share with the readers of your blog regarding using Standard Charted Bank (SCB) trading platform to start their investment portfolio.

    I called SCB trading hotline to understand more about the ownership of the shares/ETF bought through SCB trading platform. The understanding I get is that shares/ETF bought are actually under SCB custody. You won't see the shares reflected in your CDP account. So I ask in the event SCB go bust, what will happen to the shares/ETF? The answer I got is that currently, investor is insured up to $50k worth of shares. So for long term investing (15-25 years), with your investments value ballooning to hundreds of thousands of dollars, I am worried about the risk of using SCB trading platform cause you'll never know if SCB will still be around in 25 years time.

    Although SCB offers one of the lowest trading costs with no minimum commission, the fact the you don't own the shares concern me. So Andrew, when using DBSV to buy the index ETF, do you see them credited to CDP?

    • Hi Kloud,

      I believe that with DBS Vickers, those shares are with the CDP. My money is staying with DBS Vickers because the exchange rate there is also a bit more favorable.

      I have to pay about 0.3% per purchase transaction, but overall, it's far less than most people are paying, of course.

  113. Kesh says:

    Hi Andrew,

    I thought I was doing a fairly decent job in terms of managing my investments, however after reading your blog, I feel like a fool :). You have truly broadened my horizon and i am so glad that i came across your blog.

    It has been a few months since I moved to Singapore and was planning to setup a SRS account. Basis your recommendation on investing in Index ETFs, I went to DBS bank this morning to enquire if I could use the SRS funds to invest in ETF's and they mentioned that this is not offered. I subsequently spoek to DBS Vickers and they suggested that I cannot use SRS savings to invest in ETF's provided by them. Being a foreigner I get to invest close to 30,000 SGD every year (plus a tax break). My questions are:

    1) Does it make sense to setup a SRS account and contribute the 30,000 every year?

    2) If so, which bank should I consider, so that i can invest in ETF's?

    Thanks in advance

  114. Yong Cheng Lie says:

    Dear Andrew

    I have been reading your book and your suggestions on your website. Being a Singaporean I have looked at the Singapore stock index and the bond index, they are not very liquid. As an alternative to the Singapore bond index (SBI), can one not buy some of the bank bonds? Like OCBC NCPS? Also these NCPS give dividends unlike the SBI.


    Cheng Lie

  115. Jeff says:

    Hi Andrew/Kesh,

    SRS stands for Supplementary Retirement Scheme. Info is available from Ministry of Finance website (http://app.mof.gov.sg/supplementary_retirement_scheme.aspx) or OCBC, UOB, etc. You can only have 1 SRS account. Any money put in is not taxed as income in the year you deposit it, and you only pay 50% of the tax rate when you eventually withdraw it – but you have to keep it in the account until retirement age.

    You can invest the money in any investments approved for CPF investment (CPFIS scheme – this page has links to lists of shares, unit trusts etc approved under scheme: http://mycpf.cpf.gov.sg/Business-Partner/Gen-Info….
    I think only two ETFs (Straits Times Index and a bond fund) are currently included.

    While I follow the 'lazy portfolio' approach (ETFs covering US, and emerging markets plus bond ETFs), I also put money into an SRS account. As a PR, my limit is $12,500 per year. I invest that money into a small set of Singapore Real Estate Investment Trusts (REITs), diversified across logistics, healthcare, hotels, and retail companies. They pay good dividends (tax free into the SRS account) and provide a different exposure to the main equity and bond ETFs.

    Important to think about whether you want to lock up the money long term though – read the fine print.

    • Seán McHugh says:

      Hi Jeff, and anyone else who might be able to help…

      I’m keen to utilise the SRS as part of my investment strategy, but finding the constraints of only buying off the SGX frustrating, and a little confusing… I’ve been buying A35.SI (Bond ETF) and ES3.SI (STI tracker) as recommended by Andrew for Singaporeans in his book, but can see that compared to the equivalents in the UK, like IGLS and VUKE their performance over the past 5 years has been terrible, which makes me think that the tax breaks are not worth it. Yes, I know Andrew will roll his eyes at the mention of the term ‘performance’ but I don’t want to invest in some obscure ETF lemon either…

      You mention REITs, do you have one in particular that you’d recommend, or any specific examples I could use? Why did you go that route and not the ETF route that Andrew advises?

      Do you know of any decent ETFs to track stocks and bonds that are allowed to be purchased as part of the SGX that would be better than the ES3 or A35?

      I’m conscious there are issues in comparing ETFs like expense ratios and amount of holdings that need to be considered, it seems (when I plug them into Yahoo Finance) that many if not most of those available on the SGX are a little puny in comparison to the ETFs I buy off the LSE… ? eg H1P.SI or KF6.SI, like the QL3.SI looks really weird, which makes me nervous…

      Any advice? Many thanks in advance.

  116. twentyone says:

    can anyone help me on this:

    how does one compare 2 ETFs that is tracking the same index? what are the things to look out for other than expense ratio?

    i came across this after looking deeper into Singapore ETFs. There are 2 tracking the STI, the nikko STI ETF and SPDR STI ETF. what do i take into account when choosing which to put my money into?

    • Hey twenty one,

      Congratulations on your investment journey! Look into each of those ETFs to see how many holdings they have. The broader the index (the more holdings) the better. Remember, however, that expense ratios are also very important. If one ETF has 100 stocks and an expense ratio of 0.3% and the other has 150 stocks and an expense ratio of 0.5%, then go with the cheaper option.



      • twentyone says:

        thanks Andrew for the reply and welcome to the investment world.

        do i have to really put emphasise which tracks better? or things like turnover?

        will all these be covered in the book, like comparing 2 etf that tracks the same index? if it is, then i shall wait for the book to arrive in my mailbox to find out more.

  117. CatP says:

    Hi Andrew,

    I've read your book and it's really very easy to follow and enlightening, especially for people who have little experience when it comes to investing. Truly a great purchase. 😉

    I just like to ask a question. I'm currently invested in a mutual fund (for about a year or so). However, upon reading your book, I realized I can use the money instead as a capital to buy the Singapore Stock Index and perhaps the World Stock Index (I have $7K with them, currently). However, as it currently stands, I would lose a few hundreds of dollars if I sell them now. I know it's quite a small amount (in the big scheme of things) but I'm wondering if it would be worth it to let go of that amount if in the long-run, having my money parked with that fund would amount to bigger costs. And I do not know when the fund would break-even.

    Thanks for your time. 🙂

  118. Eric Kua says:

    Hi Andrew, just finished reading your book "Millionaire Teacher". Am curious how did the couple in the Singapore example invest every month? ETF trading is charged the same brokerage as a stock trade, assuming they make efficient brokerage, they should invest at least $9000 per trade since the minimum commission (at ~0.28%) is $25.

    Going by your recommendation of 3 ETF, one S'pore bond index, one S'pore stock index and one World index, that would mean about $27,000 every month!

    Appreciate your advice on this 🙂 Thanks!

    • twentyone says:

      i think Andrew said it before somewhere (correct me if im wrong), for those who do not have enough money to invest, save up till you have $3000, then buy. so for example,

      jan: $1000

      feb: $1000

      mar: $1000

      invest in sti etf

      $1000 each for april may june, then buy the bond index, and do the same for the world index. i know you will next ask the question about your portfolio being unbalance initially. but short term volatility is not much of a concern to you, as it will allow you to buy more. we are more concern about the price when we are taking the money out when retiring. this is not a recommendation or any sort, just giving an example.

    • Hi Eric,

      Twentyone's response is correct.



      • Eric Kua says:

        Thanks, wanted to clarify as doing so (investing at $1000 per month) would set us back about 2.7% PER MONTH due to the commission charged.

        If you have not realised, buying ETFs in Singapore are charged the same rates at buying stocks, which have a minimum brokerage of $25 per trade excluding sgx access fees, gst etc.

        For all the concern you listed about unit trusts eroding our profits through management fees and other annual charges, the slippage for investing in this way ($1000 per month) will cost far more damage to our bottom line.

        • Hi Eric,

          I never recommended buying ETFs with as little as $1000, unless you use the Standard Chartered model, which charges a far lower commission rate.

          • Eric Kua says:

            Hi Andrew,

            So twentyone's response is wrong?

            "i think Andrew said it before somewhere (correct me if im wrong), for those who do not have enough money to invest, save up till you have $3000, then buy. so for example,

            jan: $1000

            feb: $1000

            mar: $1000

            invest in sti etf"

            I have also received via email a longer reply from you, which is no longer displayed here. Do you mind if i copied and paste it here? Because i have even more questions after doing the Maths like you suggested 🙂

      • Jonathan says:

        Andrew, how about if your broker is Standard Chartered Bank Singapore for it charges 0.25% on commission only?

        The only thing I don't like about SCB is that their Forex spread makes any investor loose minimum of 1.6990% of their money upfront on Forex alone when transferring money from your SG Dollar Account to USD securities settlement account. To illustrate this, see the example below:

        Capital: SGD$1,000

        SCB Bank Sell USD Rate= 1.2301 (rate is as per standardcharteredbank.sg on Dec 22,2012 10:09AM)

        compare it with spot rate:

        USDSGD spot rate= 1.2207 (rate is as per http://finance.yahoo.com/q?s=usdsgd=X on dec 22,2012 10:09AM)

        So when you convert your money from SGD to USD, your S$1,000 now becomes USD$812.94

        Now you will use this money to buy stock, like for example VTI:

        Instructions: Buy

        Exchange: New York Stock Exchange (NYSE)


        Lot Size: 1 share(s)

        Order Quantity: 11 share(s)

        Order Price: USD 73.43

        Estimated Transaction Amount


        Trade Consideration: USD 807.73

        Client Commission: USD 2.02

        US SEC Fee: USD 0.00

        Total Transaction Amount: USD 809.75

        As you can see, I only paid $2.02 out of 807.73 which is 0.25% (2.02/807.73 x 100)

        However, let's say hypothetically we SELL this stock today (which I hope we should not do any day trading, but be a buy and hold investor here), and exchange our money back to SGD$, how much money did I loose and how much transaction costs did I really spend. To illustrate this, see the numbers below:

        Instructions: Sell

        Exchange: New York Stock Exchange (NYSE)


        Lot Size: 1 share(s)

        Order Quantity: 11 share(s)

        Order Price: USD 73.43

        Estimated Transaction Amount


        Trade Consideration: USD 807.73

        Client Commission: USD 2.02

        US SEC Fee: USD 0.02

        Total Transaction Amount: USD 805.69

        So to summarize, here are the accounting of my money:

        Initial Capital: SGD$1,000.00

        Fund Transfer to USD Account: USD$ 812.94

        Buy US Stock Index VTI: USD$ 809.75

        Sell US Stock Index VTI: USD$ 805.69

        So if I compute my money so far, here is what I have

        SGD$ Money = 0.00

        USD$ Money = USD$ 812.94 – 809.75 + 805.69 = USD$ 808.88

        Now when I want to exchange this USD$ 808.88 money back to SGD$, here is how it computes:

        SCB Bank Buy USD Rate= 1.2092 (rate is as per standardcharteredbank.sg on dec 22,2012 10:09AM), my money looks like this:

        SGD$ Money = USD$ 808.88 x 1.2092 = SGD$ 978.09

        USD$ Money = 0

        So from SGD$1,000.00, my money becomes SGD$ 978.09 which is a difference of SGD$ 21.90 which is 2.1902% loss from buying and selling my stocks. This loss is primarily because of SCB's forex spread 1.6990%(SCB sells you USD$ at 1.2301 , but buys back USD$ at only 1.2092): If you want to know how I compute this, I did the following:

        1,000 – (1,000/1.2301 x 1.2092) = 16.99048857816438

        To get how much percentage 16.99048857816438 is to a 1,000, simply:

        16.99048857816438/1,000 x 100 = 1.6990% (I make it 4 decimal for the percentage)

        I'm not an expert on this, but using simple math (without taking consideration expense ratio), this is how I know what I'm getting into whenever I buy securities in SCB.

        I would like to do this sort of comparison if I have SGD$3,000 and trade using DBS Vickers but unfortunately, I forgot my password since I don't use DBS Vickers anymore. Maybe someone as nerd as me (or better) can do this exercise and have all of us benefit from the analysis and comparison among different brokerages here in Singapore.

        Basically what I'm really interested is:

        1. Which brokerage is the best for my buck if I only have SGD1,000 to invest.

        2. What if I have SGD$3,000 to invest, which brokerage has better rate of return for me considering trading cost and forex spread.

        3. Is it really more beneficial to have atleast SGD$3,000 before I can trade? Will cheap commission brokerage like SCB can resolve this concern?

        Thanks Andrew. I'll be waiting for your reply with regards to what I've written here

        • twentyone says:

          thats the problem we have in Singapore, we do not have many education tools provided on this kind of investing. i do not know why, they isn't even a local book talking about this stuff. maybe there is no market for it in Singapore. even there is, its small. i think it will be nice if we can get together as a group, do some research on ETFs, brokerage and etc. but im not sure how many is really interested.

    • Eric,

      The couple in the Singapore model (in my book) invest roughly $6000 per month.



      • twentyone says:

        Eric, i think you've mistaken what im trying to say. i dint not mean investing $1000 every month. it's saving $1000 every month till you reach $3000, which takes about 3 months, then you invest. so jan save $1000, feb save $1000, and mar save $1000, then with the $3000, which amounts to about 0.8%. just post your questions here, im sure if Andrew is busy, others will help. the problem is the lack of education we can find as Singaporean for this kind of investing, we can only rely on each other.

        • Jonathan says:

          Adding all the costs including forex spread, how much does it really costs me to buy and sell index? because for brokerage such as Standard chartered, I figure out that the total number is approximately around 2.1902% if hypothetically, I sold off and realize my position at the same time I bought them. I did a sample experiment in my previous comment to Andrew below:


          Andrew, how about if your broker is Standard Chartered Bank Singapore for it charges 0.25% on commission only?

          The only thing I don't like about SCB is that their Forex spread makes any investor loose minimum of 1.6990% of their money upfront on Forex alone when transferring money from your SG Dollar Account to USD securities settlement account. To illustrate this, see the example below:

          Capital: SGD$1,000

          SCB Bank Sell USD Rate= 1.2301 (rate is as per standardcharteredbank.sg on Dec 22,2012 10:09AM)

          compare it with spot rate:

          USDSGD spot rate= 1.2207 (rate is as per http://finance.yahoo.com/q?s=usdsgd=X on dec 22,2012 10:09AM)

          So when you convert your money from SGD to USD, your S$1,000 now becomes USD$812.94

          Now you will use this money to buy stock, like for example VTI:

          Instructions: Buy

          Exchange: New York Stock Exchange (NYSE)


          Lot Size: 1 share(s)

          Order Quantity: 11 share(s)

          Order Price: USD 73.43

          Estimated Transaction Amount


          Trade Consideration: USD 807.73

          Client Commission: USD 2.02

          US SEC Fee: USD 0.00

          Total Transaction Amount: USD 809.75

          As you can see, I only paid $2.02 out of 807.73 which is 0.25% (2.02/807.73 x 100)

          However, let's say hypothetically we SELL this stock today (which I hope we should not do any day trading, but be a buy and hold investor here), and exchange our money back to SGD$, how much money did I loose and how much transaction costs did I really spend. To illustrate this, see the numbers below:

          Instructions: Sell

          Exchange: New York Stock Exchange (NYSE)


          Lot Size: 1 share(s)

          Order Quantity: 11 share(s)

          Order Price: USD 73.43

          Estimated Transaction Amount


          Trade Consideration: USD 807.73

          Client Commission: USD 2.02

          US SEC Fee: USD 0.02

          Total Transaction Amount: USD 805.69

          So to summarize, here are the accounting of my money:

          Initial Capital: SGD$1,000.00

          Fund Transfer to USD Account: USD$ 812.94

          Buy US Stock Index VTI: USD$ 809.75

          Sell US Stock Index VTI: USD$ 805.69

          So if I compute my money so far, here is what I have

          SGD$ Money = 0.00

          USD$ Money = USD$ 812.94 – 809.75 + 805.69 = USD$ 808.88

          Now when I want to exchange this USD$ 808.88 money back to SGD$, here is how it computes:

          SCB Bank Buy USD Rate= 1.2092 (rate is as per standardcharteredbank.sg on dec 22,2012 10:09AM), my money looks like this:

          SGD$ Money = USD$ 808.88 x 1.2092 = SGD$ 978.09

          USD$ Money = 0

          So from SGD$1,000.00, my money becomes SGD$ 978.09 which is a difference of SGD$ 21.90 which is 2.1902% loss from buying and selling my stocks. This loss is primarily because of SCB's forex spread 1.6990%(SCB sells you USD$ at 1.2301 , but buys back USD$ at only 1.2092): If you want to know how I compute this, I did the following:

          1,000 – (1,000/1.2301 x 1.2092) = 16.99048857816438

          To get how much percentage 16.99048857816438 is to a 1,000, simply:

          16.99048857816438/1,000 x 100 = 1.6990% (I make it 4 decimal for the percentage)

          I'm not an expert on this, but using simple math (without taking consideration expense ratio), this is how I know what I'm getting into whenever I buy securities in SCB.

          I would like to do this sort of comparison if I have SGD$3,000 and trade using DBS Vickers but unfortunately, I forgot my password since I don't use DBS Vickers anymore. Maybe someone as nerd as me (or better) can do this exercise and have all of us benefit from the analysis and comparison among different brokerages here in Singapore.

          Basically what I'm really interested is:

          1. Which brokerage is the best for my buck if I only have SGD1,000 to invest.

          2. What if I have SGD$3,000 to invest, which brokerage has better rate of return for me considering trading cost and forex spread.

          3. Is it really more beneficial to have atleast SGD$3,000 before I can trade? Will cheap commission brokerage like SCB can resolve this concern?

          Thanks Andrew. I'll be waiting for your reply with regards to what I've written here

          • Jonathan,

            This is fantastic! I don't have time to do a comparable comparison with DBS Vickers (I'm going on holiday) but it would be interesting. My guess is that buying smaller sums (like $1000) would be better with SC. But larger sums, like $3000 could be better with DBS Vickers……IF the exchange rate is better, which I am guessing it will be.

            Banks are always good at making money, aren't they? Thanks again for getting the ball rolling on this Jonathan. I would love to see the DBS answer when I get back from my break. Anyone out there want to give it a go?

            Thanks again Jonathan,


        • Eric Kua says:

          Hi twentyone,

          Oh i see, sorry i misunderstood what you've said earlier. Ok, going by this explanation, i would be incurring about 3.33% p.a. of my invested capital of $12000 should i use any broker other than SCB. Did i get it right?

          Btw, i checked DBS exchange rates for USD/SGD, 22nd Dec.

          it's selling 1.2286 and buying at 1.2126 (TT) / 1.2066 (OD)

          TT rate is about 1.3% difference

          OD rate is about 1.79% difference

          I don't know what's the rate used, presume it is the latter.

  119. Terence Tan says:

    Hi Andrew,

    Thanks for all the info regarding investing in Singapore. It have been quite a difficult task trying to find index fund in Singapore – the choice are quite limited. And all the charges are so high as compare to the US.

    It will only cost US$1 as commission compare to the US$55+ to purchase a US stock. There is custody also charges if you trade less than 2 times a month for US stock- which will in term add up to the cost of your investment.

    So do you think that it is a good idea for Singaporean like myself to open an account to trade world stock index(VT) as mention above?

    Especially Broke like thinkorswim has got an office in Singapore. OR perhap to open an account like interactive brokers in US.

    What is your view on that?

    Terenca Tan

  120. Hamstersaur says:

    Hi Andrew,

    I am a Singapore Citizen, and like you, I am an English teacher in my mid twenties.

    I decided to shop for books to take control of my finances earlier this year and your book's title "Millionaire Teacher" really caught my attention .Your book is really easy to read for someone who is really quite financially illterate =p. I told my friends and family members about your strategy but like most "investors", they are really interested in speculating (for example the ongoing Olam international event). They claim that by locking up my money in index funds, I am foregoing the more exciting speculation opportunities. Nevertheless, I am going to follow what I read from your book and I am extremely motivated to invest in Index Funds. I have been researching on the SPDR STI ETF (ES3) for the past week and I have the intention to purchase a few lots of this ETF for a start before I purchase the ABF Singapore Index Bond Fund (A35) to balance my portfolio.

    As I am a small time investor with only a few thousand dollars to spare for investment, I have some questions for you and I hope you could kindly help with them.

    Is there a "good" or "better" time to purchase index funds such as the SPDR STI ETF? (e.g when the prices are lower? The current price for 1 share is 3.220 , so 1 lot would cost 3220 SGD. Should I wait for the price of the lot to fall below 3000 SGD per lot first?) In other words, is the price too "expensive" now? I read in your book that in the bigger scheme of things, index funds will beat any actively managed mutual fund but I wish to maximise my limited financial resources.

    I have also been reading the annual report and the prospectus of the SPDR STI ETF and it seems that liquidity seems to be a concern for the ETF as the trading volume seems to be rather low. The risk of my ETFs being illiquid in a decade's time is really quite a frightening prospect. Hope you can advise me on these matters.

    Thank you for your time and assistance =)

    • twentyone says:

      there is no best price to buy the STI ETF, because we will never know when the bottom will come. by trying to buy the lowest price possible, we are attempting to time the market.

  121. Sean says:

    Hey Andrew,

    Was recently put onto you book by a fellow teacher and now am hooked. Like you, I am a canadian teacher teaching at an International school in Singapore. The thing is this, I am not planning on spending my retirement years in Canada.

    My question is this, should I still invest on canadian bonds and index funds or should I keep my money in the Singapore system?



    • Hi Sean,

      Do you know where you want to retire? If you don't know yet, then it might be a good idea to build a very diversified portfolio:

      VT: The world stock market index

      ISHG: First world international government bond index

      With these two ETFs, you would have amazingly full diversification. You wouldn't need anything else.

      • Sean says:

        Hey Andrew,

        Thanks for the quick reply. My plans are to retire in Thailand as my wife is Thai. Also, will you be having any seminars in the new year?

        Wishing you and your family a very Merry Christmas and a great New Year.


        • twentyone says:

          most of the recommendations are to hold majority of the index that is in the currency of the country you want to retire in.

  122. Terence Tan says:

    Hi Andrew,

    Thanks for all the info regarding investing in Singapore. It have been quite a difficult task trying to find index fund in Singapore – the choice are quite limited. And all the charges are so high as compare to the US.

    It will only cost US as commission compare to the USD1+ to purchase a US stock when you pruchase it with a US brokerage but it will cost you SGD 55+ if you purchase it from Singapore. On top of that there is custody also charges every month if you trade less than 2 trade a month.

    So do you think that it is a good idea for Singaporean like myself to open an account with a US brokerage to trade world stock index(VT)? And a seperate account to trade ETF in Sinagpore.

    What is your view on that?

    Terenca Tan

  123. Jonathan says:

    Hi Andrew! I have a follow-up on my last post but unfortunately, it was remove.

  124. I see many comments here regarding the trading platforms (DBS, Poems, Standard Chartered) and investing of large vs small amounts.

    Just want to share my experience. I've just started a monthly purchase of Nikko AM Singapore STI ETF (which has a lot size of 100, compared to SPDR STI ETF with a lot size of 1,000).

    This is important if you are only investing a small amount each month, as a smaller lot size means per purchase is only $320 at current price.

    Standard Chartered Online Trading is the only viable platform if you want to keep expense low (a central idea to index investing) for small monthly investment, at only 0.2% commission per trade. Even Philip Share Builder Plan (regular savings plan buying into STI ETF) costs you a min. of $6.42 monthly.

    Thanks Andrew, your book has changed my perspective on investment. I'm looking forward to embarking on my investment journey together with so many of the visitors at your blog. I'll be documenting my investment journey at my blog as well.

    • Thank you Man on the Street,

      At some point soon, I am going to look carefully (and write about) the currency bid/ask spreads at different Singapore brokerages. In many cases, low cost brokerages have been known to recoup money on spreads. I will research this thoroughly in a new post soon to see exactly what companies like DBS Vickers and Standard Chartered are REALLY charging. It will take plenty of phone calls and math, but I think it will be worth it.

      Thanks again!


  125. Bernard Lee says:

    Hi Andrew,

    Understand that there is a min commission fee of 25 SGD for vickers online trade, is it therefore wise to purchase in such small amounts since the charge% will be considered high?

    On a separate note, it I were to purchase VT via vickers , do I specify Sing or USD dollars in the entry?



  126. Bernard Lee says:

    Hi Andrew,

    Hi Andrew

    Understand that there is a min commission fee of 25 SGD for vickers online trade, is it therefore wise to purchase in such small amounts since the charge% will be considered high?

    On a separate note, it I were to purchase VT via vickers , do I specify Sing or USD dollars in the entry?

    Also what do you think about United Emerging Markets Bond Fund. Apparently there is a 7%pa dividend promo till Aug thereafter it's around an average of 5% of so that's what they claim. But there is a one time fee of 5%, no subsequent fees later on.



    • Bernard,

      With DBS Vickers, it might be best for you to accumulate a reasonable amount of cash before making your purchase, to save on commission costs. I believe that if you specify U.S. dollars you will save a bit more money. I do hate those currency bid/ask spreads, either way!

  127. SY says:

    Hi, i am concerned with the swing of USD against SGD. from a high of 1.6 days to now 1.2 , wouldn't currency flux pose a great risk even if we going for a long term horizon ? being a singaporean with intention to stay here, investing in a world index in USD, is there any way we can hedge this ?

    an example of say MYR or EUR sliding severely against SGD for > a decade till today , and definitely recovery not in sight. assuming we have been rebalancing our portfolio by adding on over the years, wouldn't it be very tragic ??

    • SY,

      if you bought a world stock index (VT) it would be denominated, when purchased) in U.S. dollars, but you wouldn't really be invested in U.S. dollars. Instead, your money would be diversified across the currencies of the countries within the index. For example, if the U.S. dollar dropped 50% compared to a collection of global currencies, and if the global markets didn't budge, then your VT index price would nearly double, in U.S. dollars, despite the fact that the global market indexes (as a group) didn't increase. As a world index, VT has some U.S. exposure, but more than half of its assets are based on international markets/international currencies.

  128. Hayley Reid says:

    hi Andrew,

    Thank you for giving me advice I have been looking for for a very long time – basically how to grow my investments via ETFs.

    I have set up a low cost trading account with Standard Chartered.

    I had in mind dollar cost averaging by putting in $500 monthly into the 50/25/25 A35/ES3/VT ratio as I am aged 53.

    However I got a big surprise when I found out that the cost of each lot of 1000 shares:

    ES3 – $3270 / 25% of my portfolio

    Means that for a 100% portfolio, I have to put in $13080 at one go! Not the $500 a month that I intended to start with.

    Can you kindly advice if the VT lot size is also 1000 shares – same as that for A35 and ES3?

    I would appreciate your advice on whether what I figured out above makes sense?

    How then can I do monthly dollar cost averaging if the cost of 1 lot is already more than $3000 for the ES3?

    Kind regards,


  129. Jack says:

    Dear Andrew,

    I had just finished your book, your article bring me further interest to your blog.

    I have a question. I am a Malaysian currently live in Malyasia, i work oversea for 7 years and saving a sustantial amount of USD, i never involve in any investment to utilize my USD saving until i start reading your book and realize that i could actually do a lot with my USD saving, may i know if there is any way for non US citizen to trade bond / fund with US dollar ?

    Thanks for your answer.



    • Hi Jack,

      You could open an account with DBS Vickers and purchase exchange traded funds off the New York Stock Exchange. Give them a call and set up an account. If you have further questions about it, please let me know. I recommend that you build a global portfolio with a home country Malaysian market bias on your equities, much as I suggested in my book. You could buy such an ETF off the New York exchange, via DBS Vickers.

  130. You could certainly do that Terence. E-Trade has a very good platform that you could use from Singapore and you would pay $9 U.S. per trade. But see if you can transfer your funds to U.S. dollars through a cheaper exchange rate before making the purchases. E-Trade Singapore uses Standard Chartered, and I believe that their exchange rate spreads are a bit higher than they should be. Move the money to them first, in greenbacks, then make the purchases, if possible.



  131. Hi Sean,

    Hi Sean,

    A global portfolio would work very well, considering that the Thai baht doesn't swing too dramatically from a global basket of currencies. You could buy a global stock index (VT) and an international bond index (ISHG) and leave it as that if you want. Easy stuff, but effective for your purposes, I believe.

    What school are you at? If you are interested in gathering a few friends/colleagues, I could come and speak.



  132. Hi Hamstersaur,

    I'm glad to hear that you are taking a less speculative (and thus, what will eventually be a more profitable) investment route. I don't think you need to worry about your fund's liquidity. As indexing grows more and more popular, the assets invested passively in Singapore will appreciate. And don't forget that the fund you would buy isn't derivative based. It actually owns the securities within it, with low liquidity only being a concern based on possibly high bid/ask spreads if liquidity is too low. But as mentioned, the popularity of passive investing will only grow as Singaporeans become more educated, financially. More and more will learn that gambling with money is not a good route to success..

  133. Thanks Andrew as well for your reply. I'm looking forward to your post on different Singapore brokerages as it would really help investors like myself to decide on the best option available, especially when we only have a couple of hundred dollars a mth to spare!

  134. Hi Andrew, let me try to explain what he meant as I had the exact same thought after I read your book. Hope I'm right 🙂

    Based on his age allocation, he wants to construct his portfolio based on the following ratio –

    SG Bond / SG ETF / World ETF : 50% / 25% / 25%

    He meant to say if he was to construct an entire porfolio at one go, he would have to put in $13,000+. This is due to the fact that one lot (1,000 units) of ES3 costs $3,000+. Since ES3 constitutes 25% of his portfolio, he needs to put in $3,000+ * 4 = $13,000+ in total.

    His Intended Portfolio :

    (total approx cost $13,000+)

    SG Bond : $3570 (3 lots of A35)

    SG ETF : $3260 (1 lot of ES3)

    World ETF :$6830 (VT does not have min. lot size)

    My solution to his question is to buy G3B instead, since it has a lot size of 100 and not 1000. G3B is also STI ETF, by Nikko instead of SPDR.

    (total approx cost $5,000+)

    SG Bond : $1190 (3 lots of A35)

    SG ETF : $1308 (4 lot of G3B)

    World ETF $2498 (VT does not have min. lot size)

    For small-time investors with few hundred bucks monthly, you won't be able to do monthly dollar cost averaging. However, you would be able to make a purchase perhaps every two to three months (rotating between G3B, A35, and VT) using the G3B option instead of ES3. I'm currently doing this, you may track my progress at my blog as well.


    Man on the Street

  135. Julie Chan says:

    hi Andrew,

    Man in the Street read me correctly.

    On my $6000-$7000 a year budget, it.seems that I can only afford to enter the market once a year .

    The portfolio looks like this:

    Spore Bond A35 $3570 (3 lots) – 50%

    Spore Stocks G3B $1625 (500)- 25%

    world Stocks VT $1798 (29) – 25%

    Does this mean I really cannot take advantage of the principle of dollar cost averaging on a more regular basis than once a year due to the cost of the investments in the proposed portfolio?

    What difference is there buying into the Nikko Singapore Stock index (G3B) or the SPDR (ES3)?

    Thanks for your answer and comment.

    Kind regards,


  136. twentyone says:

    An interesting article which stain the "experts" reputation.


  137. Arvind says:

    Hi Andrew,

    First of all I just want to say I really enjoyed your book! Perhaps if I may give a suggestion to Julie.

    Let me know your thoughts!


    You can purchase the NIKKO STI ETF in lots of 100 shares. Its cheaper so instead of spending $3K you can just buy a lot for $300.

  138. Thank you Arvind!

    And Julie, my apologies for missing your question. I'm thrilled, however, to have a growing base of generous and smart readers who can pitch in to answer questions. You can probably see that the questions I get certainly keep me hopping!

    Thanks again Arvind!

  139. Simon Lea says:

    Hi Andrew,

    Recently picked up your book and I'm hooked. Thank you for sharing such valuable information with us.

    I'm a 17 going on 18 Singaporean guy and the issue I am facing is that DBS Vickers requires a minimum age requirement of 21. So in light of that, I was hoping I could get your opinion on what you would recommend if I would like to follow the steps you have detailed in the above post.

    Again , thank you for all the information you so willingly share and I look forward to hearing from you ! 🙂

    Simon Lea

  140. Singhatrader says:

    Hi Andrew,

    I am a freshly minted Singaporean (Foreign talent). I must say God has been kind to me, as I have wonderful family and a job with a reasonable remuneration. Where I have gone wrong is the money management aspect. With each increase in salary the expenses went higher as such always JOB (Just Over Broke). I am aware that we work so hard for the income, the spare cash / savings must work even harder for me. Have read many books and am supposedly financially literate now, but the after the Financial Turmoil where I lost some good amount of money, and as if that was not enough, I also lost money when MF Global went belly up along with 30% of my funds (was able to get back close to 70% of funds) I have gone totally blank and fear taking decisions on money management. However, I am slowly but surely turning the corner and am ready to get back into the market.

    I stumbled on your website and went ahead and read the book in two days. I have also read and reread your website article on investment opportunities for Singaporeans. In this respect, I have some questions as well as some to share with you and other Singaporeans.

    1) If we treat CPF account as equivalent to Bond index, which will always be increasing in absolute numbers due to the Interest rate, I foresee two scenarios. Incase the total quantum of CPF as a percentage of the full corpus (Interest component plus the add monthly contributions) goes below my predetermined level of 45% (in this case VT and STI ETF bo above 55%) I should sell some portion of the STI index fund and buy a Bond Index (preferably Singapore index). Incase the VT and STI index Fund drop in value and the are below 55% of the full corpus, I can only buy additional qty of VT and STI ETF using additional savings as I will not be able to use CPF to buy ETF. In my view these are the two options available to Singaporeans while rebalancing the Investment Portfolio, which kindly confirm.

    2) As regards procedure for purchasing the VT using DBS vickers I had to waste half a day and then a trip to the Citibank to see how my SGD in POSB bank can be converted to USD for payment to DBS Vickers for purchase as the Citibank call centre people were totally confused and gave conflicting info. To cut a long story short Citibank's forex conversion rates are atrocious and even the preferential rate for SGD50K and above was 50 pips above the spot forex rate. On the other hand DBS vickers FX conversion rate was about 20 pips above the spot rate, which I think may still be open for some negotiation. DBS vickers suggested that after the purchase of VT is made I can call them next day and fix the FX conversion rate basis which they will withdraw the SGD from the POSB account. This seemed to be very neat with least hassles.

    3) Individual holding in Local stocks are held by CDP, however, foreign scrips will be held by DBS vickers, for which they will charge USD2.14 per month per counter. Though they cannot give any guarantee on the holdings, they advised that they have the backing of DBS, and there is a separate entity which is ring fenced, who is the actual custodian of the foreign scrips.

    4) I am taking a leap of faith and going for investment using your approach. I plan to treat the whole of my CPF (OA & SA) as 45% of the corpus and use 27.5% each for STI ETF and VT.

    If only I had heard about you 5 years back, I am certain I would have minimised my losses and infact made money during the financial crisis. However, as they say it is never too late

    Apologies for the long mail.


    • Hi Singhatrader,

      I'm very impressed by the research you have done. And yes, I have also found that DBS offers better exchange rates than Citibank and Standard Chartered. In many people's minds (and I'll admit, I thought this too) the lower commission charging brokerages like Standard Chartered appear cheaper than DBS Vickers, but as you found out, Citi (and SC) charge in other areas. In this case, they make up their profits on the exchange rate spread. Not very transparent, is it? I also understand that you can call DBS after a trade has been made and adjust the exchange rate terms they initially settled on. A friend of mine has been doing just that! Fascinating and bizarre, isn't it, for a first world bank?

      I think your plan with the CPF sounds like a very solid one. Just remember to think dispassionately about the market's direction and you'll do fine. That, above all, is the most important thing to master. From what I have seen and learned about investing, the products we buy don't make as much of a difference as the emotions we can master. Having said that, I'm disappointed to hear about your losses with the other firm. That must have felt like a kick in the teeth.

      But going forward, Singhatrader, you have an excellent plan. And thank you for continuing to offer your experience on this blog. You're helping others, and I certainly appreciate that! With my two jobs (I write and teach) I'm finding it tough to keep up with comments on this blog, but it's fantastic when people (such as you and many of the other readers) start helping each other.

      Thanks so much!


  141. Shawn says:

    Hi Andrew,

    Is the world stock index (VT) now USD51.15? If this is the current price, how am I going to start investing in it if this is going to cost USD51,150 for 1 lot, 1000shares? I have only about $600/month to spare. Sorry if I'm wrong coz totally new at this.

    Anyone can shed some light on this?


    • Singhatrader says:

      Hi Shawn,

      Scrips traded in US stock exchange do not have any minimum lot size. You can by 5, 10 , 19 or any size that suits your budget. However, OPTIONS are in lots of 100 each, which should not matter as we are not trading same while following Andrew's philosophy.


    • Singhatrader is right Shawn. If you have a few thousand dollars, you can purchase VT. I don't even consider lot size of purchases off the NYSE using DBS Vickers. In fact, I haven't even looked at them once, and couldn't even tell you what they are. I do know that I will be charged a minimum commission of $29 or 0.35% if I purchase VT, so I want to ensure that I have a few thousand dollars saved up before making the purchase. But I certainly don't wait until I have $50K. Let me know how the purchase goes.

      And if you want to make smaller purchases easily, you could try POEMS.

  142. Sean says:

    Hey Andrew,

    After reading comments and talking to people, I would like to know which is the better account to open, DBS Vickers or Standard Charter? Also, if Standard Charter, what is the name of the account?


    Sean Connors

    • It's tough to say Sean. The currency spreads with standard chartered are larger than DBS. But the commissions with DBS are larger. Anyone want to run the math on that one? I keep meaning to, but haven't had the time to do it yet. It would be pretty close! The SC account is a brokerage/trading account Sean.

  143. Kwan says:

    A book easy to follow, content is interesting.

    But the investment related to Singapore in this book seems theoretical, and it has not been tested in practice. If a reader buys A35 and ES3 as recommended in the book, the reader would be in trouble — The effect of the spread between the bid/ask prices has never been seriously considered in the book and in the posts.

    Just a reminder to the readers — Some investors make money by teaching others how to invest, instead of making money directly from the market.

    • Thanks for your comment Kwan,

      Here's something to consider. Let's assume that you paid a shocking bid/ask spread of 5% on every purchase. Of course, that's far more than the bid/ask spread would ever be, but let's play with that assumption for this example.

      If you dollar cost averaged, paying a 5% spread on every purchase, you would be investing just $9,500 for every $10,000 deposited (assuming 5% was eaten by the spread).

      Assume that this $9,500 were invested each year earning 8% per year, for 35 years. You would have $1.76 million.

      Now assume no bid/ask spread for a unit trust with an expense ratio of 1.75% per year. In this case, a full $10,000 would be invested annually, but the return would be 6.25% per year instead of 8%. In this case, the $10,000 invested would grow to $1.18 million.

      As you can clearly see, even a bid/ask spread of 5% on either end would be far less damaging than a high, ongoing expense ratio.

      If you are a gambler, jumping in and out of stocks or indexes, then the spread will certainly eat into your returns. But as a regular investor who buys and then mostly holds, it has little long term effect.

      Readers, keep in mind that the spread of 5% is not realistic. It is much lower than that. But I used this exaggerated example to prove a point.

      Also, note that I gained my wealth before publishing a book on the subject. And I did it in the manner I wrote about.



      • Singhatrader says:

        Hi Andrew,

        The ask / bid difference is called spread. For A35 the spread is $0.004 for ask price of SGD$1.180 and Bid price SGD$1.176. So if we buy the minimum lot of 1000 we would be paying SGD 4 for a purchase of SGD1180/- which turns out to be 0.34%. We are not discussing the Commission charges of DBS vickers here as same is 0.28% ++ with minimum of SGD25/- ++ and will depend upon the quantum of purchase.

        For ES3 the spread is SGD0.01 therefore for a minimum purchase of 1000 @ 3.30 we will pay SGD SGD3300 which includes the spread of SGD 10/- Commissions are extra.

        To me this is no brainer……….

        Or is it I am missing something here.


        PS Andrew. may I request a response to my post of 5th Feb.

  144. CatP says:

    Hi Andrew,

    I recently opened a trading account with Standard Chartered (with its no minimum commission). However, I find that their exchange rate is quite high so even if I am not paying a minimum commission, my invested amount gets a blow from their high exchange rate.

    Would you recommend another platform for trading foreign stocks? Should I just use Standard Chartered for local stocks?

    • CatP

      SC for local stocks is an excellent idea. And DBS Vickers charges a lower exchange rate spread than SC for foreign stocks. They will charge a minimum commission of $29 or 0.35% on larger purchases. By first world brokerage standards, this is pretty high. But it beats paying a 2% commission on a unit trust, not to mention the ongoing expense ratio, which eats into the profits every single quarter.

  145. Shawn says:

    Hi Singhatrader,

    So this means I can buy any number of shares, 50, 100 or 500? Correct?

    Thanks mate

    • Singhatrader says:

      Hi Shawn,

      Yes you can buy in any configuration of whole numbers i.e can be 24, 87 124 etc need not be in Tens i.e 50, 100, 500 etc…

      • Thanks Singhatrader,

        I appreciate the input. You know what would be interesting? We should determine which brokerage really is cheaper after costs, assuming a U.S. ETF, with a $6000 SGD purchase. Would it be SC (with its higher exchange rate) or DBS with its higher purchase commission rate? I keep meaning to do the math and write a post on this, but I have my column deadlines which are keeping me busy. Let me know if you could help me with the research and I could write it up!



  146. CatP says:

    Currently, SC has a 1.5 to 2% exchange rate spread. My worry is that when I convert from SGD to USD when buying, and when I convert from USD to SGD when selling in the long run.

    Although there is not much I can do since I earn SGD and would always need to convert. Just wondering if there are other brokers that offer a lower exchange rate spread but at the same time would still incur a much lower fee overall despite having a minimum commission fee. I mean these are the options as I see it:

    SC – No minimum commission + 2% exchange rate spread

    Other brokers – With minimum commission + perhaps a lower exchange rate spread (although I don't know how low it can go)

    Other options – ???

    I'm not sure which will have a lower fee overall.

  147. Singhatrader says:

    Hi Andrew,

    I have not been able to activate my DBS vickers account for purchase of US counters. I guess the CNY holidays are delaying this. Once it is up I will again chat with DBS vickers and then call up Stan Chart to see who is cheaper for a purchase worth SGD 6000/- However for self I will be using DBS vickers due to the higher amount of funds for purchase.

    Now I am looking for some similar indexes in the Indian market so that I can invest in the Indian stock mkt with the INR reserves that are lying in my bank.

    Will post my findings here.


  148. walt says:

    Hi Andrew and all,

    thanks for the great book (which I was thrilled to find out – I was reading up on index investments before and was really wondering how it would apply in Singapore context) and great website where many share the tips and experiences for all to learn. Being a newbie, I am excited to find out more about index investment!

    I have also been wondering on which brokerage offers better deal too.

    As Andrew and many put it, DBS has lower exchange rate, while SCB has lower commission rate.. But if I remember correctly, DBS also charge custody fee when I trade in non Singapore market right? I am concerned it will eat into the return.. Considering this, is it advisable to consider SCB instead, or other platforms?

    Also, if there is any major difference between VOO and VTI, as VOO is cheaper and has slightly lower expense ratio at 0.05%. I have yet to purchase any non singapore market ETF and I plan to get either of these.

    I would greatly appreciate any input. thanks!!

    • Singhatrader says:

      Hi Walt,

      The Monthly custody fee charged by DBS is USD2.14 per counter, irrespective of the number of shares. In the grand scheme of things it is negligible.

      I will be doing a comparison between SCB and DBS next week. Lets see what is the finding.


  149. Joe says:

    Just bought the book at the Popular bookshop!

    Is it advisible to get the DBS Vickers account for overseas VT purchases and another lower charges account for local A35 and ES3 purchases? Will this work to reduce transactional cost?

  150. Daniel says:

    Dear Andrew,

    Thank you for your excellent blog. I have just one problem with your advice – it fails to take into account forex spreads when trying to buy into VT.

    For banks like Stanchart (whose brokerage I use because it charges no minimum commission – useful for investors like me with small sums to trade), the bid-ask spread for USD/SGD is more than 200 pips. This is extortionate and a round-trip will basically cost as much as the front-end load of most unit trusts (bought from a discount broker like dollarDEX).

    In such a situation, would it be more appropriate to invest in unit trusts to get international exposure? Many unit trusts are denominated in SGD so you do not incur forex spreads.

    • Great question Daniel,

      If you do the math, you'll find that an extra expense ratio of 0.5% (each and every year on the full amount of the assets) is far more damaging than a front end load (or Forex spread upon purchase) of 4%. And your Forex spread for purchasing would NOT be 4%. Do the math to see what I mean. In addition, the thing with buying ETFs is that you can see under the hood. When buying a unit trust, even the fund company will pay a Forex spread. It will likely be lower than what the individual retail investor pays, but it will still be there. Guaranteed. But you won't get a chance to see it or know that it occurred.

      To answer your question, it makes no sense to buy unit trust with their 1.75% expense ratios. I have worked this math out for different readers. Try it yourself.



    • Great question Daniel,

      If you do the math, you'll find that an extra expense ratio of 0.5% (each and every year on the full amount of the assets) is far more damaging than a front end load (or Forex spread upon purchase) of 4%. And your Forex spread for purchasing would NOT be 4%. Do the math to see what I mean. In addition, the thing with buying ETFs is that you can see under the hood. When buying a unit trust, even the fund company will pay a Forex spread. It will likely be lower than what the individual retail investor pays, but it will still be there. Guaranteed. But you won't get a chance to see it or know that it occurred.

      To answer your question, it makes no sense to buy unit trusts with their 1.75% expense ratios. I have worked this math out for different readers. Try it yourself.



      • Daniel says:

        Thank you for your reply Andrew. I've just finished reading the comments section and noticed this issue being raised multiple times, so it might be good if you could write a post on the forex and commission costs of buying foreign-listed ETFs. I'm sure many people would find it very helpful!

        Thanks again,


  151. Bob says:

    Hi Singhatrader,

    I'm very interested in that comparison. How's it coming along?

  152. Edmond says:

    Hi Andrew,

    Do we have to buy board lots (1000 shares) of international stocks like VT through SGX?

    How can we check if stocks require board lots in Singapore?

    • Hi Edmond,

      I have purchased some very odd numbers of ETF shares (like VT) through DBS Vickers without any problem: 145 shares, 221 shares etc., so there won't be a problem with that.



  153. Jol says:

    Dear Andrew,

    I am a new entrant to the workforce, and would like to start building my investment nest egg. Being someone with relatively little interest in finance per se, I have decided that passive investment is the way to go for me. Your website has been very helpful thus far, thank you!

  154. Karen says:

    Hello Andrew,

    I live in HK, read your book and start to do some research right away on how to set up a couch potato portfolio in HK as a local, non-US resident.

    Even though HK is known as Asian's financial hub, I am surprised how little is provided for stock index fund/bond fund in HK.

    I noted Vanguard has opened an office in HK. I have checked and they don't serve non-US residents.

    Do you come across anyone who needs the same info for ppl in HK? There are some ETFs but they don't cover global equity or global bond index.

    Your advice appreciated.

    A big Thank-you!

    Karen from Hong Kong

  155. Hi Karen,

    You can certainly build a diversified portfolio of exchange traded funds in Hong Kong. Many of my readers had luck with the Saxxo Bank brokerage. And they all ended up dealing with a guy named Boris who helped them set up the account. Give the brokerage a call. See if you can open a trading account that will give you access to the New York market, and from there, you can buy virtually any exchange traded fund you want. And if (by chance) you end up talking to a guy named Boris, say hello to him from me. I have never met him, but so many of my Hong Kong based readers bumped into him when going through the process. You never know!

    Please let me know if you have any luck setting up this account, OK?



    • Karen says:

      Hello Andrew,

      What a prompt reply! Thank you so much!! Glad to know there are other ppl in HK interested in couch potato investing. For sure will check out Saxo bank soon.

      A few follow-up questions if you don't mind =P

      1. As I checked, ETFs traded in HK stock exchange provides limited choices on global index/bond index fund, and some are synthetic ETFs with underlying being swap or derivatives instead of physical stocks. I dont find a lot of mentionings on synthetic ETFs in your book but my inclination is to avoid another layer of counter-party/credit risk of the issuing banks. What's your opinion towards synthetic ETFs?

      2. regarding bond, I do some readings and many said at current level, bond has limited upside due to the very low interest rate now, and bond price is likely to drop when interest rate increases. I know you are not a fans of market timing but I feel somehow uneasy if I buy bond index fund now knowing bond price will drop in near future (though not knowing when). What's your opinion? Is holding that portion in cash a sensible alternative?

      Hope my questions don't sound too silly!

      Again a big thank you!


      • Hi Karen,

        I should give you a bit of homework. Find the biggest bond decline in the past 70 years, then triple its magnitude. Find the THIRD biggest stock market drop in the last 70 years, then cut its magnitude by half. Using such creative math, which would have been the bigger drop?

        You need bonds in your portfolio Karen. Even at their most volatile, they are far far far less volatile than stocks. As an investor, going forward, the best thing to do is ignore the news, build a diversified responsible portfolio, and rebalance it. What would I do if bonds dropped 6%?(trust me, that would be considered a HUGE crash for bonds) I would buy more bonds with fresh money, assuming that the stock market didn't drop more than 6%. If it dropped more than 6% (the stock market) then I would put fresh money into stocks, in that scenario, not bonds.

        As for synthetic ETFs, you don't need them. Avoid adding third party risk where possible. With Saxxo, you will have access to the New York Stock Exchange and will be able to buy any global ETFs you want.



        • Karen says:

          Thanks Andrew for the homework.

          Taking a timeframe of the recent five years which may be more relevant to me, I checked two bond index and their price range as followings:

          1. 02821.HK (an Asia bond fund that's the only ETF Asia Bond ETF available in HK stock exchange) price range $106-$130 (22% high-low diff) in 2009-2013

          2. VBMFX (Vanguard US Bond Index in NYSE) price range $9.6-11.1 (15% high-low diff) in the same timeframe

          3. VBMFX's price range is actually the same for the last 10 years

          What I learnt is that a global bond fund is more stable than a regional/emerging market counterpart. I guess I also learnt from your book that a relatively more volatile market may be good for monthly instalment investing.

          Next, I will do my homework in lump sum investing vs monthly instalment!

          Thank you Andrew,


          • Hi Karen,

            Now do the same thing for equities: the high and the low ranges during the past five years, and compare to bonds. You'll find bonds remarkably stable, in comparison.

            As for lump sums versus monthly, you can pick a five year period if you want, but long term evidence shows that lumps are more profitable…not during every period, but during most. The past five years will tell you nothing about statistical probabilities.



          • Jeff says:


            If you are thinking of investing on NYSE, make sure to check out the fees charged by your HK broker. In Singapore, I have to pay a fixed admin fee every time a US ETF pays a dividend. This is not a big deal for annual dividends, but the Vanguard bond index pays a dividend every month. In my situation, this extra expense every month meant I was better off investing in a locally listed bond ETF.


          • Karen says:

            Dear Jeff,

            Thanks for dropping by and your kind advice. I am checking with local broker on US stock, and learn that I have to pay 30% depository tax on dividend received. This is quite new on my part as there is not such tax in HK! And I just learnt from you on the monthly dividend payment.

            Seemingly there are not many ETFs in HK on global index and bond. Will continue checking alternatives.

            Many thanks!


  156. Thanks Jol, and good luck with the savings process. The most important part, of course, is to invest as much as possible, and not get trapped into too much materialistic spending. Cheers! Andrew

  157. SC has a pretty ugly spread rate Cat P. DBS Vickers has a kinder spread but higher purchase commissions. The banks make money off us no matter what, unfortunately. And with actively managed unit trusts, such spreads are hidden. Being able to look under the hood of the car hurts a bit in this case, doesn't it?



  158. Jaybee says:

    Hi Andrew

    what are your thoughts on physical replication ETF vs synthetic ETF? I am on the process of deciding between A35 singapore bond index vs KV4 singapore bond index as someone suggested from comment section that the expense ratio of KV4 is lower.

    However upon more research, I found that their main difference is in the replication type. I am totally new here so have no idea. I did read some stuff and knows about how one will have counterparty credit risk over the other. But will really appreciate if any of your readers or you can provide more input.


    • Hi Jaybee,

      Synthetics add risk because you're dependent on the solvency and the promise of the institution you purchase them through. I don't buy them because I'm an investment wimp.



  159. Juan Ponce says:

    hi, im a filipino working here in Singapore. i can only invest 300 SGD a month. i opened a trading account in SCB and planning to trade in the US market. im only 27 years old. my portfolio is like this


    VEA- 37%


    i heard that these vanguard etfs are 1 board lot. im planning to buy and rebalance monthly. Do you think this is the best strategy based on my situation? Thanks.

  160. farah says:

    after reading andrew's book about a year ago, i finally saved up to buy my first 1,000 shares of the STI! 🙂 such a good feeling, and i hope to maintain the discipline to put money aside each month for the next $3,000.

    the thing i didn't realise about vickers though, is the amt of paperwork i had to go through. i didn't study business, so i had to do some online quiz on SGX (passing rate: 18/20). after that, i wasted a few days because i didn't realise that i had to send my quiz results in.

    so to anybody else in the same boat as me, remember to factor some time for all the red tape and approval zzz…

    • Hi Farah,

      Glad to know that you made the first step! I myself did so too a few months ago (via Standard Chartered, buying Nikko AM STI ETF). Vickers' commission is a little too high for my liking – I prefer to stick to Nikko AM STI ETF for its 100 lot size, so per purchase is only $300+.

      All the best!

      • farah says:

        wow, nice! i checked out stanchart some time back, it told me i couldn't use their services because i didn't have any financial bg. i should give it another try – would really love to be able to make smaller purchases so that i can accumulate the assets early 🙂

        all the best to you too 🙂

  161. Dewey says:

    Hi Andrew,

    There is a Custody Fee of 2 per share for DBS, capped at $150 per quarter but they will waive it off if you have 2 transaction a month.

    I'm using SCB and there is no custody fees so I'm guessing SCB is better for us if you seldom do any trading?

  162. Jack says:

    Hi Andrew,

    I must said your book and this blog is fascinating, I am a Malaysian and I have just travel across the Singapore boarder to open a account with DBS Vicker, as I hold my majority saving in USD ( I worked oversea but live in Malaysia ) I would like to trade off ETF in New York stock market , as I am 30 years old now, following your advice I will allocate 20% in US bond index, 40% in US Stock index and 40% in world stock index. May I know what is the symbol / code using for US bond index , US stock index and world stock index if I trade from DBS Vicker ? Also how do I check the share price when placing the order ? Thanks for the answer !

    Best reads,

  163. Karen says:

    Hello Andrew,

    I have been doing quite some homework since last time I wrote, including finishing John Bogle's "The Little Book of Common Sense Investing". This is a great book giving a lot of empirical data and endorsements from investing Gurus that indexing is (in fact, has been) the way to go!

    One note though, after learning more about buying US stocks/ETFs as a HK resident, I think I would probably give up the idea for now: the 30% tax on dividend is one thing, and the estate tax of 18-35% estate tax for US-situated assets over 60K is another. I primarily invest for my kids university education which has 10 years to go. Though I don't plan to die young =P, this is sth no one can take charge.

    Instead I will be looking into ETFs that are listed in HK. Something to consider:

    1. 2800 (on HK stock)

    2. 2821 (on Asia bond)

    3. 3019 (on Global stock. this is a synthetic ETF but the only ETF on global stock thus far, TER ~0.45%)

    4. 3010 (on Asia stock)

    5. plus one on China equity

    I fully understand the limitations and the risks, but this is what I can do at the moment. I am positive there will be more ETFs being listed in HK in future, and will look forward for more choices upon review after a year or so.

    I hope the above could be of reference for those in Hong Kong who are looking into indexing.



  164. AKD says:

    Hello Andrew,

    Thanks for the portfolio model that you described above.

    I had some queries with regards to rebalancing the portfolio.

    Lets say Investor X starts his portfolio with S$ 30K.

    1) 12K into A35 – 40%

    2) 9K into ES3. – 30%

    3) 9K into VT – 30%

    His rebalancing timing is end of each year ( Is this reasonable ?)

    His portfolio at the end of the year reads

    1) A35 – 44% (+4%)

    2) ES3 – 28% (-2%)

    3) VT – 27% (-3%)

    When you said adding fresh money into the account for components that did not do well , were you suggesting selling off the 4% from bonds and adding it along with additional 1% to make the portfolio back into the original 40-30-30 (along with additional new money saved) ?


    Just add fresh new money saved into ES3 and VT to bring them all back into the original % ?

    Appreciate your advise.




  165. Karen says:

    Hi there,

    A note from Hong Kong:

    If you are in HK and are interested in Vanguard's products, stay tuned:


    News said there will be a new ETF listed in HK which is offered by Vanguard. From this press release, it seems they are going to do more with retail clients in HK pretty soon.

    Am very interested to see what they have to offer =D


  166. Rohan Rajiv says:

    Hello Andrew,

    Firstly, I'd like to thank you for your excellent book. I am 24 and have been trying to figure out this whole investing thing. 🙂 I started with Bill Bernstein's excellent "The Investors Manifesto" and followed it up with Ramit Sethi's "I will teach you to be rich." Both of these offer investment advice for the US only though (though Bill's principles are top class)

    And I was fortunate to spend 20 minutes last week with Bill on a skype interview for an initiative I work on (www.realleaders.tv) and he recommended your book when I asked him for Singapore specific advice. I got to your blog post when I reached that part of the book and I spent the last hour and a half going through every comment so I didn't ask you a repeat question.

    Here are my conclusions –

    – DBS Vickers still the recommended brokerage as it's exchange rate fees are much better. (StanChart is a better lower starting point but has more hidden fees)

    – CPF is a good "bond index' replacement

    – Local investors are better off investing in the STI index – 20-30% minimum recommended

    – For owning global stock index, consider VTI and VEA (slightly different allocation but VTI has a greater proportion of emerging markets)

    I am now considering the following –

    – CPF component as bond (for argument sake – let's assume 30%)

    – 30% Singapore stock market

    – 20% each in VTI and VEA

    And I have the following questions –

    1. How do you know when is a good time to buy and sell? You suggest that we don't spend much time worrying about whether the markets are up or down.. and yet you mention frequently that you load up on stocks when it's low? How do you develop the judgment on when is good time or not? (do you just rely on value cost averaging)

    2. I haven't found a post on your view on real estate as an investment (i.e. not for a house you stay). For example, a friend of mine is considering buying property in India.. Could you please point me towards a link?

    Also, it would be nice to have an "in-blog" search. The google search widget seems to point to all of the web.

    3. What would be a good frequency to rebalance my portfolio? Monthly?

    4. I am not sure if I'm going to be in Singapore for very long (I could be.. but I am not sure.) Is it easy to move money from one brokerage account to another?

    Thank you for your help and to all the members in the community who contributed with answers.

    I've sent DBS Vickers a note asking for directions to open a brokerage account so looking forward to that. (lazy, I know.. but I'm tired after reading all the comments..haha)

    I am finding investing to be a huge mindset change. I have all my money sitting in my savings account depreciating in value but I just haven't known anything better. It still feels like I'm treading into risky waters getting into brokerage accounts and the like.. perhaps it's because I don't know enough.

  167. Singhatrader says:

    Hi Dewey,

    The custody fee is SGD 2 per counter per month, plus another 14cents as GST. We are looking at max 2 counters in US mkts, therefore the custody fee is of minimal consequence.

    On an annual basis we have to pay a custody fee of SGD 25.68 per counter. Unless you are sure that the SCB brokerage and currency spread is better than DBS, you will be better off with DBS.

    Further, being a Singaporean I feel "safe" DBS vis a vis foreign brokerage.


  168. Alain says:

    Hi Andrew,

    Bought some VTI, VEA and for fun, some fundamental index PRF. As I was about to buy canadian bond (40% of my predicted portfolio, i am 47, canadian non resident earning salary in USD) I still can't understand two things.

    1-Investing in the same currency you plan to retire of, in my case Canada, will eliminate the currency variation factor. So if you take one dollar of your investment, it worth one dollar. What buggs me is this: in order to buy VCE, I have to face the same dilemma of having to convert USD to CAD at the time of buying. So what's the point? I could just find bonds in USD. And I will anyway be living all over the world as well, so USD will be more easily used. Your thoughts?

    2- Buying Canadian bonds will give you dividends. Being canadian, you will have to fill a tax report and you will pay around 15%, as non resident on the profits made in Canadian dollars. Is that right? if so, why paying 15% on your profits? Am still confused here. Your thoughts?


  169. Singhatrader says:

    Hi Investors,

    As promised I did the comparison between Stan Chart Brokerage and DBS Vickers. As I may not be able to post a table here I am furnishing the info in text form for US Counters.


    Commission Charges 0.28% ++

    Minimum commission as SGD25 ++

    Custodian Fee SGD 2.14 per counter per month.

    Today’s exchange rate offer SGD to USD 1.2427 and USD to SGD 1.2367


    Commission Charges 0.25% ++

    Minimum commission NIL

    Custodian Fee NIL.

    Today’s exchange offer SGD to USD 1.2501 and USD to SGD 1.2288

    Basis above info have done simulation with following results for purchase only

    DBS Vickers Investment SGD 3000 + Commission SGD 25 = SGD3025

    SCB Investment SGD3017.5 + Commission SGD 7.5 = SGD 3025

    Therefore, if the investment is below SGD3000 it would better to open an account with SCB.

    However, keep in mind that when liquidating the holdings the exchange rate of DBS will be once again better than the exchange rate offered by SCB.

    Custodian fee is too insignificant to be considered in this equation.

    As the holdings are expected to grow in the long run, my suggestion would be to open the account with DBS Vickers as the favorable exchange rate will outweigh the cost of Custodian fee.

    Trust this clears this matter once for all.


    • Dewey says:

      Hi Singhatrader,

      Per counter means the type foreign ETF that you have?

      I have VTI and VEA, does that means two counter? If that is the case, I think it is more worth it for me to stay with SCB. 🙂

      • Singhatrader says:

        Hi Dewey,

        Yes VTI and VEA count as two counters. Therefore you will be paying SGD4.28 per month irrespective of how many shares you have in these counters.

        Over a period of 10 years you will pay SGD513.6 as custody fee.

        I am not sure what is the quantum of investment you will make per transaction, but I can safely assume that the better exchange rate of DBS vis a vis SCB while converting the USD to SGD after 10 years will more than make up for the custodian fee.

        BTW I am not in any way promoting DBS, but instead just showing the working. I will leave it to you to decide what suits you best.



  170. Dewey says:

    Dear Singhatrader,

    I appreciate your effort here thanks for all your work.

    I personally think the exchange rate are not that much compared to the custody fees. 🙂

  171. CatP says:

    Hi Andrew,

    Just another question that somehow related to the topic. Would you know how our investments are protected in case (God forbid), the broker goes bankrupt (SC, DBS, or whichever)? If the bank acts as a custodian like with the case of Standard Chartered, will we lose our money if it goes bankrupt?

    Any helpful info about this would be greatly appreciated. Thanks!

    • Hi CatP

      In the case of DBS Vickers, the investment are kept in the Central Depository. The bank doesn't own them.

      • Singhatrader says:

        Hi CatP,

        Singapore counters purchased thru DBS Vickers will be held by CDP. US counters purchased through DBS will remain with DBS Vickers entity. This separate entity will be within the DBS umbrella, but will be ring fenced.

        Now your question about, what happens if they go bust. During the last financial melt down DBS guaranteed the amount in the bank upto max SGD50000/- I am not sure if the Foreign banks operating from Singapore had extended such guarantees to their depositors.

        I feel more comfortable with Singapore banks and institutions.

        My take on this matter:-

        If I keep money in the bank I earn a pittance as interest and if the bank does down, I am guaranteed only SGD50 K. If I invest in SG and US counters thru DBS, I am hoping for a yield of 8 to 10% per annum. Though the entity holding the US counters is supposed to be ring fenced, we will only know the truth once the entity goes belly up.

        When MF Global went belly up many people lost money. The Singapore branch was supposed to be ring fenced as per MAS guidelines, but we still lost about 20% of the amount.

        I am comfortable in taking the above chance.

        you will have to decide what is comfortable to you.


  172. Hi Rohan,

    I suggest investing when you have the money, regardless of market levels. I buy monthly, and you can see what I do with my money by reading the following articles under the "Andrew's Money" link: http://andrewhallam.com/category/andrews-money/

    Thanks for the suggestion on the search. There is a site search further down to the right, but it's too inconveniently placed, so thanks for that.

    Real estate is worth investing in when the rental yield (in my view) exceeds 10% per year. Divide how much it would rent per year by what you pay for the property. If it's 10% or close, that's a good deal. But of course, the place has to be in a good neighbourhood, in decent shape etc.



  173. This is awesome Singhatrader!! Thank you!!!!

  174. Hi Rohan,

    I suggest that you buy every month or when you have enough money to offset the commission fees. This depends on your brokerage of course, and offset is the wrong word. But if you pay $30 in fees, but are investing just $50 per month, that doesn't make sense. Ensure that you have a few thousand first.

    Each month (or with each purchase) buy the lagging index. This will allow you to somewhat rebalance without selling. If your allocation is out of wack by 10% or more, do a manual rebalance, but not unless it's out by at least that. You want to keep commissions low.

    It is easy to move away from Singapore and continue wiring money to this account from another country. That makes things very easy for you, in case you move.

  175. Joseph says:

    Hi Andrew, as a side issue, what are your views on insurance policies? I have some whole life insurance policies, that I now feel might have been a mistake (heavy distribution costs, eating up returns, etc.). Would you recommend buying cheap term policies instead?

  176. Dewey Lim says:

    Hi Andrew,

    Can I get your valuable opinion on the pros and cons of buying direct bonds from the government instead of ETF A35?

    • Hi Dewey,

      If you can do it, you wouldn’t have to pay an expense ratio fee. You may (if possible) wish to ladder their maturities as well. Can you buy a one year, three year and a five year bond? If you could, buy all three and then replace them with another one year, three year and five year bond once they mature.

  177. jason lin says:

    Dear Andrew,

    Will REIT index be the next winner? I am wondering whether should i put REITs indices into my portfolio.


    • Jason,

      I’m an investor, not a speculator. As such, I don’t consider what may or may not be the next “winner”

      That said, a collection of REITs (or even better, a REIT exchange traded fund) could be a welcome part of a diversified portfolio….but keep that component to 15% or less of your total portfolio. And plan to hold it for a lifetime, as you would with your other indexes.


  178. Nig says:

    I happened to stumble upon this website .
    U have a sound knowledge of investment products
    keep up the good work Andrew!
    Ur work is appreciated by many

  179. Gab says:

    Hi Andrew,

    I have just completed your book, which I purchased right after stumbling upon your website. It was truly one of the best investment education books I’ve read!

    I am Malaysian currently residing in KL, Malaysia. Due to the international postings of my job, I have an account with Citibank US, where my salary is deposit to every pay period. My question is, would it be possible to buy ETFs directly from the US, since I have a bank account in the US? If there is a possibility, that would save me the exchange rates from having to deposit from my US account into DBS Vickers Singapore and to USD again to purchase VTI & VEA.

    That being said, I am a non-US citizen.



  180. Dan says:

    Hi Andrew, I’m a Singaporean interested in investing in US listed ETF. The dividend tax of 30% is negligible as you have mentioned in your earlier post. However, given that index investing is for the very long term, I’m very concern with the high US estate duty for non US resident should I pass away before selling my US assets. Any assets above USD 60K is subject to estate duty. And it can go as high as 55%. What is your view on this?

  181. Tim says:

    Hi Andrew,

    I have read your book, and you have convinced me I should get started. Many thanks for that.

    You mention in the book that people can invest small sums monthly in indexes (which is what I’m looking at so far). How does the minimum trading commission makes that possible? DBSVickers charges a 0.28% or $25 per trade, whichever is higher. That means the low rate is achievable for a purchase of nearly $9K per trade. Conversely, if I am prepared to invest 1K, the fixed $25 amounts to 2.5% .

    Are you aware of avenues for people who can only make rather low trades initially?

    Thanks in advance,

  182. kasey says:

    Hi Andrew,
    Ihad wanted to invest in index funds listed on SGX for some time but am concerned about the low volume. ES3 averages a few hundred lots while A35’s volumes even thinner. Should investors be concerned about the low liquidity of these funds?

    Kasey (Singapore)

  183. Vanessa says:

    Hi Andrew,

    Thanks for providing this wonderful blog full of information. Read through all the comments and there was indeed quite a bit of discussion and useful information gleamed from there.

    I’m 25 years old and am ready to start on my investment journey. Not an ardent fan of high risk investing, I’ve been looking at passive investing methods and am considering two ways to go about doing it.

    One of which is investing in indexes in this post and the other is called the “permanent portfolio.” Instead of investing it all in indexes, it splits the passive investment into four components – bonds, stocks, cash and gold.

    May I kindly ask your thoughts on the permanent portfolio? Is it advised to keep part of the investments in cash and gold? Why and why not?


  184. Banks have been coming up with regular savings plan for investment into STI ETF lately, with monthly contributions as low as $100.

    OCBC – Blue Chip Investment Plan (BCIP)
    POSB – POSB Invest Saver

    Unfortunately, the fees are still somewhat on the high side.

  185. Justin says:

    Hi Andrew,

    Singaporeans will be taxed 30% on any dividends received from their US listed ETFs. Even with this deduction, do you still think it makes sense for us to buy Vanguard? This is keeping in line with minimizing fees and taxes.

    If not, are there any ETFs listed in Singapore that you would recommend as alternatives for:

    VTI US
    VEU US
    BND US

    Many thanks and keep up the great work please!


    • Hi Justin,

      With no capital gains taxes to pay, it’s still a screaming deal. If price gains are 8% and capital gains account for a further 2% gross gain, a Singapore investor in U.S. equities will make roughly 9.4% after taxes.

      You could always buy synthetic ETFs off the local market, but bid/ask spreads are higher and their a higher third party risk.

      If you want a 25% withholding tax instead, you could buy your ETFs off the Canadian market (different ticker symbols) but DBS Vickers charges higher commissions for that.

      • Justin says:

        Thanks for your advice Andrew,

        Makes a whole lot of sense. Competitors like Lyxor, iShares and DB X Trackers offer products that do not even come close to Vanguard’s coverage.


      • Justin says:

        Hi Andrew,

        Would there be any reason at all to consider discount brokers like eTrade?

        Thank you.

  186. Justin says:

    Even GIC getting into INDEXING…

    Aug. 2 (Bloomberg) — GIC Pte, manager of more than $100 billion of Singapore’s reserves, is changing its investment strategy for the second time in three decades to be more flexible as the global outlook becomes “complicated.”

    GIC will split its portfolio into one that’s actively managed, and another that tracks the overall market, it said as its annual report showed returns were little changed. The company didn’t say how much of the assets will be managed or indexed against the market.

  187. Shai says:

    Hi Mr Andrew,

    Im singaporean and age 30. I have somewhere abt 10k-15k in my savings. I just finished reading your book and I’m so tempting to start investing in ETF indexes to capitalize on my savings and gain long term. But I totally have no idea how to get started. Should i invest all or standby some in savings for emergency event? Which brokerage account to choose from, DBS vickers or stanchart? I hope u can guide me through step by step,

  188. Serene says:

    Hi Andrew,

    I read your book. Thanks for the sharing. I wonder if you could enlighten me on the following questions:

    1. US ETF like SLV, QQQ have termination date. May I know why is that so?
    2. SG ETF like STI ETF do not have termination date but will be terminated if the liquidity is not sound enough. Is the ETF size a good indication of a ETF liquidity?

    Looking forward to your advice and thanks! 🙂

    • Serene,

      I’m not familiar with any ETF having a termination date. If you are buying a broad based ETF (that isn’t a synthetic ETF) you’ll have no problem with liquidity. For this reason, ETFs off the New York Exchange, versus synthetic ETFs off the Singapore exchange, are a better option. Having said this, I listed no synthetic ETFs in my book when suggesting which ones Singaporeans could opt for.



      • Serene says:

        Hi Andrew,
        Many thanks for enlightening me at such amazing speed! (=

        I’ve extracted some info on the ETFs which have termination dates from its prospectus.

        >PowerShares QQQ Shares are listed on Nasdaq under the symbol “QQQQ.”

        Mandatory Termination Date:
        The first to occur of (i) March 4, 2124 or (ii) the date 20 years after the death of the last survivor of fifteen persons named in the Trust Agreement, the oldest of whom was
        born in 1986 and the youngest of whom was born in 1996.

        Discretionary Termination:
        The Trust may be terminated if at any time the value of the Securities held by the Trust is less than $350,000,000, as such amount is adjusted for inflation.(2)

        >iShares Silver Trust (ETF) – SLV listed on NYSE
        Termination events…… The trustee will terminate the Trust Agreement if:

        – the trustee is notified that the Shares are delisted from NYSE Arca and are not approved for listing on another national securities exchange within five business days of their delisting;
        – the aggregate market capitalization of the trust, based on the closing price for the Shares, was less than $350 million for five consecutive trading days and the trustee receives, within 6 months form the last of those trading days, notice that the sponsor has decided to terminate the trust;
        – if not terminated earlier by the trustee, the trust will terminate in 2046, on the fortieth anniversary of its creation. After termination of the trust, the trustee will deliver trust property upon surrender and cancellation of Shares and ninety days after termination, may sell any remaining trust property in a private or public sale, and hold the proceeds, uninvested and in a non-interest bearing account, for the benefit of the holders who have not surrounded their Shares for cancellation.


        Termination of Fund.
        The commercial success of the Fund is dependent on attracting assets under management significantly larger than a traditional unit trust. In the event that the size of the Fund falls below $100,000,000 on any day falling two years or more after the date of the Deed, the Manager may terminate the Fund.

        Pardon me for my ignorance, how do I know if the above funds are broad based or synthetic? I’ve read the prospectus of all the above ETFs but I couldn’t find such term.

        Looking forward to your advice & many thanks.


        • Serene,

          You are a thorough researcher! So many years from now, when (if) they come to an end, you’ll get your money back and can reinvest.



          • Serene says:

            Hi Andrew,

            I just wanna be sure. =P

            Pardon me for my ignorance, how do find out if an ETF is broad based or synthetic?

            Looking forward to your advice & many thanks.


          • Serene,

            It will say so in the prospectus if it’s synthetic. And so you know, none of the ETFs you linked to before are synthetic. “Broad based” just means that they are comprised of the entire market. A broad based U.S. index could be synthetic or not, but it will have the broadest exposure to the U.S. market. The U.S. ETFs on the Singapore exchange are synthetic, so they don’t actually own the stocks they are tracking. Those you listed on the New York exchange (which you can still buy via a brokerage in Singapore) are not synthetic. And none of the ETFs I mention on this site are synthetics….synthetics have an added institutional risk.


          • Serene says:

            Thanks a zillion, Andrew! Wishing you a wonderful weekend ahead! (=

  189. Noel says:

    Hi Andrew,

    After I finish reading your book, I immediately open an account in SGX and DBS Vickers.
    Since I’ll be turning 40 this year I did what you suggested;
    A35 40%
    ES3 30%
    VT 30%

    Now, A35 is dropping – Is it time to top up? Buy more shares? or wait until the moment the price goes up then buy?
    In this way I can get the lowest possible share price?

    Thank you and my best regards,

    • Hi Noel,

      You could probably go lighter on bonds, considering that your CPF is in fixed income.

      You may want to go with 20% bonds, and keep it there. Your allocation could be 80% stocks (split between Singapore and World) with 20% in bonds. When you add fresh money, you could add to the lagging index.


  190. James says:

    Hi Andrew,
    Just finished Millionaire Teacher after a recommendation from a Canadian compadre – a great read! Showed you some love in an Amazon review as well as recommending it to friends.

    I am an American in my early 30s working at your cross town rival here in Singapore as a teacher as well, and really had no idea how any of this works until reading your books. Not having a pension is one of the few drawbacks of international education.

    Anyway, I just got home from a bus ride to DBS Vickers feeling defeated after being told that Americans can’t set up accounts because of our tax structure. What can I do? Totally willing to renounce my heritage…but sending money monthly after opening a Vanguard account sounds more reasonable? Appreciate any further help to get me started; I wanted this to be my summer accomplishment before we start up again next week…

  191. Justin says:

    Great resource by Mark Hebner, 12 Steps for Active Investors. A more rigorous exploration into index investing. If this doesn’t cure you of active investing, probably nothing will.

  192. Wei says:

    Hi Andrew, I am reading your book and I have a few questions 🙂

    In your book you praised vanguard’s for the low fee and its index funds. When I browsed online, I saw that vanguard has opened a branch at Singapore since 2003 but you never seemed to mention it (well it might be that I missed it because I haven’t finished the book)

    When I read vanguard singapore’s website, it seemed that their policy was a bit different from the US one (they were mentioning something like taking the best of both active and passive funds), is it why you did not recommend it for people residing in Singapore?

    Also, can I buy vanguard international stock market index as the global component of my portfolio? Will it be very different from world stock market index?


    • Hi Wei,

      Unfortunately, Vanguard Singapore is only for institutional investors. In other words, they offer funds for pensions, endowments…that sort of thing. I also wish they offered more in Singapore. Incidentally, Vanguard USA offers some managed funds too, alongside their index funds. Vanguard USA’s managed funds cost about one fifth what the typical actively managed unit trust in Singapore costs. As for international exposure, you could buy an ETF provided by Vanguard, trading on the NYSE, and you could purchase it via a Singapore discount brokerage.


  193. Peony says:

    hi , after reading your book and 1.5 year down the road, i only have 2 lots of STI ETF. talk about fear and the tendency to want to time the market…. is not good. i have about 800K of cash now. would you advise that i split the investing over the next 6 mths ? any advice whether should i do it over 3 or 6mths?

    one last qn. rebalancing of portfolio, we should be doing it in SGD translated equivalent , in today’s exchange rate right? and to add on to whichever lagging index, measured by SGD terms ? i am a singapore resident.

    thanks a lot for your help!

  194. Josh says:

    Hi Andrew

    Hope you are doing well. I am well on my way into index investing after reading your book, your website, bogleheads etc

    I have a concern that maybe you can help. I have more than USD60k in Vanguard VTI and VXUS. From my readings, non-resident aliens (NRA) is subject to US estate tax when their holdings exceed USD60k with a max rate of 55%!

    I assumed you are NRA as well for US tax purpose. How do you go around this?

    There are a few suggestions out there including:
    – buying a non-US domiciled Vanguard fund e.g. Ireland, UK
    – setting up a non-US foreign company to hold your Vanguard US etf
    – getting term insurance for protection against the estate tax etc.

    Any comment you have is appreciated.


  195. Josh says:

    Referring to the conversation between Justin and Andrew above, please note that you will only have estate tax exemption up to USD5 mil ( it is about USD 5.2 mil now) if you are a US tax resident or citizen, based on what I read.

    For non-citizen and non resident – what known as non-resident alien – your exemption only up to USD60k. You will get a higher limit if your country of resident has tax treaty on estate tax with the US. Singapore is not one of them…

    • Vanguard’s ETFs on the Canadian stock market offer a great alternative: no estate taxes charged upon death, no matter how much wealth you acquire. DBS Vickers gives exposure to the Toronto market, as does TD International, in Luxembourg. You can check out Vanguard’s Canadian domiciled ETFs here: https://www.vanguardcanada.ca/individual/etfs/etfs.htm

      • Josh says:

        Thanks Andrew. I have done further research on this and would like to share the information. But firstly, there are so many factors to consider if you are a non-resident alien wanting to invest in US ETF!!

        Indeed you can invest in the Vanguard ETF on the Toronto Stock Exchange. The things that need to be considered for a Singapore resident:
        – slightly higher management expense ratio
        – potential higher forex exposure due to conversion from USD to CAD and then to SGD. I do not know how much this will impact the performance.

        In terms of withholding tax exposure, it is almost similar whether you invest in the Vanguard funds directly in the US market or via the Canada market. If you invest direct, you are subjected to a US 30% withholding tax on your dividend. If you invest via the Canada market, the Canada ETF will be subjected to a 15% US withholding tax. You (the Singapore resident) will in turn be subjected to 15% Canada withholding tax. You could be slightly better off in term of withholding tax exposure if you invest in the Canada ETF.

        All things considered, it could be better to invest via the Canada ETF due to the potential US estate tax exposure unless you do not care about this or you want to take the risk…

        Note: I am not a tax expert, just sharing info based on my research. Readers are welcome to edit if there are inaccuracies…

        • Thanks Josh,

          You wouldn’t have to convert from Singapore to U.S. to Canadian. You could convert straight from Singapore to Canadian. No spread from U.S. to Canadian exists on Vanguard Canada’s Canadian domiciled ETFs that track the U.S. market. You’re correct about everything else though. Would be nice to avoid the death tax though. Ever considered a swap based ETF with Horizon? No dividend taxes to pay under that circumstance. They trade on the Canadian market as well.

          • Josh says:

            Andrew, I thought there is still USD/CAD forex exposure as the Canada ETF is denominated in CAD and it invest in the USD-denominated ETF. I was referring to the the unhedged version of the Canada ETF. Or am I missing something here?

            I have also just noted that the hedged and unhedged version of the same Canada ETF has the same expense ratio. I would have presumed that the unhedged version has a lower expense ratio…

            I am not familiar with the swap based ETF and will check it out. Thanks

          • There’s no forex cost spread from U.S. to Canadian when buying a U.S. index off a Canadian exchange. That’s the reason Vanguard was able to make a market for its U.S. indexes in Canada. Always go with the unhedged version. There’s a hidden cost of about 1% per year extra when there’s currency hedging.

        • Josh says:

          Further update – DBS Vickers deduct a general Canadian withholding tax of 25% and not the Canada/Singapore treaty rate of 15%. I believe it will be almost impossible to recover the differential 10% as DBSV place our orders via another foreign brokerage that withhold the 25% before remitting to DBSV the net dividend.

          So you got to decide if the extra withholding tax is worth paying…

          • DBS Vickers used to charge 25% tax on my Canadian bond interest Josh, but dropped it to 15% about 5 months ago without me asking them to do so. Are you still being charged 25%?

          • Josh says:

            Andrew, this is good news indeed!

            The 25% was stated in their website and confirmed to me via an email from them. Seems that the information is not updated.

            In that case, I will try out the Canadian ETF and see what is the withholding tax when I receive my first dividend. My current holdings are all in the US domiciled ETF.

            Sometimes, I do wonder how will the IRS find out given that there are at least 1 intermediary between the local investor and the foreign broker/trustee that hold the shares…


  196. Peter says:

    Hi Andrew,
    Can you please give me informations and guidance on how to purchase index funds base in Malaysia?
    Thanks and regards,

    • Hi Peter,

      The only way I know of, is to come to Singapore and open a brokerage account with DBS Vickers. If you’re from Malaysia (or an expat living in Malaysia) you can do this in person.


  197. Joanne says:

    Hi Andrew,

    Thank you for sharing such a great insight with us!


  198. Ash says:

    Hi Andrew
    Very interesting reading. Would value your advice. I have 2 portfolios – one for my retirement and one for the education of my 2 kids. I wanted something low cost, diversified and “automatic” in terms of investing and payments so after much deliberation I went for the following a few years back and have 2 ongoing Regular Savings Plans (1 for the kids and 1 for me)

    Infinity US 500 Stock Index
    Infinity European Stock Index
    Aberdeen Global Emerging Markets Fund – would have liked to have a lower cost passive fund but could not find a good equivalent

    1. Basic question – should I create 3 accounts – 1 for me, 1 each for the kids? The thought of physically logging into 3 accounts and buying (vs 2) somehow seems to be a big deal. But I’m also concerned that with just 1 account for the kids, when the time comes to withdraw funds for 1 kid from the account, I have run into challenges in terms of how to apportion this. What do you think?

    2. Do you think it is wise to take profits on a long term portfolio periodically or should I just stay invested till the end (e.g it is time to withdraw for the kids’ education)

    3. My concern around the portfolio is around the small size of the Infinity funds and the danger of them closing shop and moving on (is that possible?). Also I’m not really happy about the additional charges imposed on these funds by the local fundhouse on top of Vanguard expenses. But I dont really have a great alternative

    4. I’m thinking of hedging this by shifting some money to an international ETF portfolio – Vanguard (US), iShares(Europe) – the concern here is around the estate duty and the tax on dividend. What do you think?

    Thanks in advance

    • Hi Ash,

      Having separate accounts is a good idea. If you want something easy and automatic, you’ll have to pay higher expense ratio fees, but I wouldn’t bother taking profits off the table. That said, when your kids are about 10 years old, invest for them as if they were 50 years old. Increase the bond allocation slowly. By the time your kids are about 16, you shouldn’t have much (perhaps 20%) exposure to the stock markets. Treat their portfolios as if they belonged to 90 year old pensioners who need their money very soon. When your kids go to college, you’ll be liquidating all of that money over just a few years. I don’t think you’ll want it gyrating wildly with the stock market while you’re selling. A market drop of 30% could devastate your portfolio if you don’t have that heavy fixed income component.


      • Ash says:

        Many thanks Andrew. If I may trouble you a bit more, I would greatly value your input below

        1. Do you mean separate accounts for each kid? I use POEMS and have 2 accts today (1 retirement, 1 kids education). So you are suggesting 3 then? Any smart ways of bifurcating my POEMS kids portfolio without actually starting one new? The technical issue here is that I physically buy them every month rather than triggering an auto purchase to save a few % pts off the upfront cost (strange that RSP is higher upfront cost in POEMS)

        2. What is your opinion about my portfolio of Infinity (US, Europe) funds and Aberdeen Emerging markets? I also have a Share builder plan putting a fixed amt into STI ETF every month so my portfolio currently is like this US: 28%; Europe: 26%; APAC & Emerging Markets: 20%, Singapore (incl REIT) 26% – should i go for some other mix?

        3. Thanks for the advice on bonds – its valuable. I dont have bonds right now. I’m concerned that with interest rates going up, bond prices will go south soon. Should i be concerned about buying into Bond funds now?

        4. Are there any Bond Index funds (singapore and global) that you would suggest I buy through a regular savings plan? I know you suggested Singapore Bond Index (ETF?)

        Thanks a lot

        • Ash says:

          Hi Andrew, if you have a few min would greatly appreciate any inputs to the questions I had. Thanks and apologies for the trouble

  199. walter says:

    Dear Andrew
    Thanks for the great informative site!

    I have a question though, what is the difference between VT and VTI?
    in this post you mentioned of VT, but otherwise you advise us on getting VTI.

    Besides the differences in expense ratio, is there any other difference?
    which one do you recommend?


  200. Chris says:

    Hi Andrew,

    Thanks for the excellent book. I am a pilot; as a whole, I think we are a goldmine for financial advisors, as we tend to have decent earnings but very poor financial education. My colleagues are signing up to all sorts of high fee funds and I feel you have helped me dodge a very costly bullet!

    A couple of questions I would much appreciate your help with:

    I am British, my wife is a Kiwi, we live in Singapore and don’t have the first clue where we will move to or end up retiring. I want to start investing in index funds and bonds as you suggest, but am not sure which country’s funds to focus on- my understanding is this could be important due to exchange rate fluctuations. Is there any harm in spreading my investments around e.g. a worldwide index, an SGX index, a kiwi one and a British one? And the same with bonds? Or is this counterproductive?

    Secondly, I understand that certain indexes which I purchase on DBS will be purchased in foreign currency e.g. USD. So I expect that my SGD will be converted to USD by the bank and I will pay their (typically punitive) exchange rates. Do you recommend opening a USD account with DBS and then converting cash across using a more favourable method e.g. and external currency brokerage? Or do you just accept the exchange loss from the bank for the sake of simplicity?

    Many thanks again for your help.


  201. Josh says:

    Hi Andrew 

    Happy New Year!

    I have just received the dividend distribution from VUN and can confirmed that the withholding tax is 15%.  I am also currently holding VTI which I intend to sell and buy VUN.

    I am trying to figure out the correlation between the VUN and VTI prices as almost the entire holdings of VUN is in VTI.  The last price of VUN prior to ex-dividend on Dec 27 was CAD27.59 and the dividend per unit was CAD0.09636.  The last price of VTI prior to ex-dividend on Dec 20 was USD94.20 and the dividend per unit was USD0.494.

    Are you able to shed some light on the correlation between VUN and VTI share prices?  As well as the dividend payout rate for both.  VUN payout rate seems to be lower even after taking into considerations the USD/CAD exchange rate as well as the dividend withholding tax.  

    Thanks in advance.


    • Josh,

      Sometimes (and I think this is the case with Vanguard Canada) dividends get paid as they come in, while Vanguard USA holds the dividend until a specific quarter date. Remember, holdings all have different dividend payout dates (Coke is different to WalMart, for example) so payout schedules aren’t consistent. Then the ETF provider can choose to pay you when they want, quarterly, or as they arrive.

  202. Kevin says:

    Hi Andrew,

    Singaporean here. I finished reading your book a couple of weeks ago, and have been taking steps to start investing just as you’ve recommended.

    However, while searching online for information on DBS Vickers, i stumbled upon this blog entry by you (http://andrewhallam.com/2012/09/dbs-vickers-raises-trading-commissions/), in which you talk about DBS Vickers raising its trading commissions, and state, at the end, that you “offer my sincere apologies to everyone I have steered to DBS Vickers over the years.”

    Am i reading correctly that you are therefore no longer recommending DBS Vickers, and that i should be looking to invest through somebody else? Keeping in mind that i’m a real beginner, and would not have even considered investing if i hadn’t happened across this website and bought your book.

  203. Brad says:


    I’m a Canadian expat living in Singapore. Heard about you and your book from one of your SAS students and really enjoyed the read. Amazing how much I didn’t know. I am looking forward to sitting down with my advisor next week an hearing what he has to say. I’ve already told him that I’ve been studying your work and have read your book and am going to be taking my investments in a different direction. Should be fun.

    I’m planning on being in Singapore for 3 more years max and then moving back to Canada, purchase a home and carry on from there. I want to follow your advice and do the, age in bond indexes, and a split between two stock indexes. Should I set it all up in Canada since that’s where I will be in 3 years? Or does it make sense to set up in Singapore?

    Is the TD e-series still advisable or is there something new that you would advise?

    Thanks for your wisdom!

  204. Jason says:


    Great article. I think my question is the same as one previously asked, i.e. the issue of estate tax for non US residents when buying VT. Is there a good alternative for a global index fund?



  205. Min says:

    Hi Andrew
    I am a newbie to investing, but will like to start by following your advice on investing in indexes.
    I would appreciate your advice/comments to the following:

    – are ETFs safe? do they ever collapse, crash, disappear?
    – do they issue dividends similar to the other stocks?
    – based on your own experiences, have you sold your ETFs/indexes and realised your profits before? Or have you been holding on to ‘paper money’?


  206. Vinai says:

    Hello Andrew ,

    I just finished reading your book , It was really helpful in having an alternative view of investing .
    My previous experience was disastrous , as I wiped out all my savings playing with warrants during the 2008 crash .

    This time I was determined to have a plan and not to keep chasing the pack, that is when I came across your book .

    I was reading up on Index funds and feels this should be a more better approach , I am planning to save on a monthly basis and reorganize the funds every 1 year .

    Since I am planning to invest around 300-500 $ a month , I find the min charges ( 18-25$) by the Singapore brokers very high .
    From your experience , could you please advise me which brokerage would be best in this scenario o reduce my upfront charges . Cheapest I have found so far is POSB invest saver with 1% but this again sound quite high when considered for long term investment . Again this does not give a choice to reorganize my porfolio periodically .

    Thanks !

  207. viknesh says:

    HI i have a question ,which is the best broker that allows me to do a optimal dollar cost averaging portfolio.(lowest commission and a decent arrange of ETFs)

  208. Ash says:

    Hello Andrew
    This blog and the many reader comments have been very valuable. I have been investing monthly in a few index funds in SG for a few years (mainly Infinity US and Infinity Europe). Reading your portfolio suggestions, I’ve been reviewing this strategy. I see 2 options now and would like to request for your advice.
    1. Sell all my Infinity funds and buy into VT – I do have some concerns about investing a large lump sum (from the redemption) directly into an ETF so may opt for splitting that sum and investing over a few months
    2. Split my monthly investment between the Infinity funds and VT so that I continue to benefit from the dollar cost averaging/ compounding in the Infinity funds.
    – I am concerned about putting all my eggs into the Infinity basket (don’t fully understand what would happen if the funds were to close suddenly) so thats why diversifying into VT makes intuitive sense for me.
    – At the same time, I’m concerned about losing out on the compounding effect by just stopping investing in Infinity monthly investment without redeeming the current portfolio. Thats why i’m thinking of continuing the monthly investment (with a smaller sum)

    Could you let me know what you think would be the best approach please

  209. Will says:

    Hi Andrew,

    This article of trading with in SG with ETFs is very helpful indeed. However, taking consideration that it was written in 2010, is it possible to have a part 3, or maybe a updated version of the article?

    Most importantly, will you still recommend the same 3 ETFs and DBS Vickers as the brokerage to do do business with?

  210. Ash says:

    Hi Andrew
    Could you advise me on the following
    1. How can one best invest a lump sum in Euros in a low cost ETF through a Singapore based broker?
    2. How can I best convert a lump sump in Euros to SGD here – banks offer me a very low conversion rate and as I was working overseas for a few years, this is not the kind of sum that can be transacted at the money changers
    3. How should I think about getting into bond ETFs right now – I’m concerned about the impact of future interest rate hikes on the bond prices (would see a decline in the ETF price as a result in future, so a principal loss?)

    I also had a few other questions (posted above on Apr 20)

    • Hi Ash,

      Question number 3 is one where your interest is speculation. Not my area. I’m more interested in building diversified portfolios of stock and bond indexes, without concerning myself with guesswork. Few speculators come out right anyway.

      I set up a multi currency account with DBS allowing me to convert currencies to make purchases at Saxo Capital Markets.


  211. Chat says:

    Hi Andrew. I just found your book not long ago and I’m still in the midst of reading it; I wish I had found it twenty years ago. For someone who has been doing some “investing” on a trial and error basis, can I clarify how I can classify the following in order to take stock of the existing proportion of bond vs equity before embarking on the ETF journey? I’m in my late forties, so I guess I should be looking at approximately 50% bond & 50% equity?

    Q1) Is a property that I am collecting rent and paying mortgage on considered as “bond” or “equity”?
    Q2) What about mutual funds which are classified as “alternative investment” and “balanced fund”?
    Q3) Are “fixed income” mutual funds considered a “bond”?
    Q4) I have some insurance policies which will give me a sum of money when they mature or if I surrender. Are these considered bonds? What if I use the proceeds to reduce the mortgage?

    I would appreciate your views on the above. Thank you.

  212. Lim says:

    Hi Andrew,

    IS DBS Vickers still your first choice to buy the funds from? For Local and World index alike?

    I read that they have increased their commission fees especially on the US market.
    Since this is a 4 year old article. I was wondering what if your thoughts on it now. I am about to buy my first ETF.

  213. Leo says:

    Hi Andrew,

    Just finished reading your book as well…the only thing holding me back is the same question as well…plan to invest monthly!

    “IS DBS Vickers still your first choice to buy the funds from? For Local and World index alike?

    I read that they have increased their commission fees especially on the US market.
    Since this is a 4 year old article. I was wondering what if your thoughts on it now. I am about to buy my first ETF.


    • Hi Leo,

      I get into all the nitty gritty details in my upcoming book. Let me just tell you this: advertised costs for commissions aren’t the only expenses investors pay through brokerages. Overall, it’s a hair splitting contest. I like that DBS Vickers doesn’t gouge on currency conversions the way Standard Chartered and Saxo does. But I don’t like their higher trading costs. As mentioned, it’s a hair splitting contest. And I’ll soon reveal the splitting ends in my latest book, out in November. For practical purposes, you could flip a coin.

  214. R says:

    – are ETFs safe? do they ever collapse, crash, disappear? http://www.moneysense.gov.sg/understanding-financial-products/investments/types-of-investments/exchange-traded-funds.aspx This site gives a very good breakdown of the types of risk you face investing in ETFs. Seems like you’re throwing around a lot of Armageddon words with collapse, crash and disappear.
    First thing you need to understand is, ETFs are an aggregate of the index, which means it is a basket of equities/stocks. Do stocks crash when there is a recession? Yes.

    I’m going to assume when you say collapse and disappear, you mean it becomes of 0 value. Well this would likely be a possibility for ETFs which are synthetic, i.e derivatives based. [counterparty risk] Meaning, the ETF doesn’t actually buy the stocks themselves but buys it through derivative instruments. In short they do carry higher risks than the cash based ones.

    If you’re taking the ETFs in Singapore, both of them are cash based, meaning you actually do hold onto to the stocks when you buy into the ETF. So chances of it disappearing, is extremely low. If they do cease to exist, then pretty much anything you buy in Sg would have pretty much ceased to exist as well.

    – do they issue dividends similar to the other stocks? Short answer is yes. No need to take anyone’s word for it. You can do your own homework to find this out via the corporate actions page which covers things such as dividend payouts on SGX’s website. http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/corporate_action

    – based on your own experiences, have you sold your ETFs/indexes and realised your profits before? Or have you been holding on to ‘paper money’? Again I would ask you to refer to the SGX website, I am pretty sure the volumes indicated are not falsified, meaning people actually do sell off their lots and realise their profits (or losses) instead of ‘paper money’.

  215. Mistra says:

    Hello Andrew,

    I only get aware of your book last month and now in the progress of reading and understanding it.
    Given my background, 40yrs old Singaporean with zero background with investment but very keen to learn,try and hopefully benefit from it. Very inspired and motivated I read your books and your success.

    Let’s say i have 20K SGD and willing to put it on long term investment for 5-10yrs plan , what is your best suggestion.

    Also, i have kids and would like to open account for them to start early but really clueless how it will goes.

    Looking forward to your best advise. Thanks again.


  216. Alicia says:

    Dear Andrew,
    First of all I’ve just read your book and I’m so glad that my friend recommended it to me.
    I am based in Singapore and very new to investing in index so I have the following questions, hope you can kindly answer them!

    1. What is the difference between index and index exchange traded funds, which should I invest in?
    2. I like the idea of dollar cost averaging, and I know that there are a few options here in Singapore to invest in ETF or blue chips using small amount of money every month (for instance $500 every month with OCBC, POSB or POEMS). I am just not sure if it is better to do this or to save up for a few months then to purchase 1 lot of Index or Index ETF via a brokerage. What are the pros and cons of each and which will you recommend?
    3. What are some world indexes and where can I find information on them?

    Thank you for patiently answering my questions.


  217. Justin says:


    Not Andrew, but hope this helps.

    1. An index is a measurement of a section of the stock market. So for example, the Straits Times Index is a measure of the performance of the 30 largest stocks in Singapore. An index ETF is a fund tradeable on a stock exchange that replicates the index by mimicking as closely its constituents.

    2. OCBC, POSB and POEMS may not be as cost effective as buying the ETFs outright on an exchange due to the presence of an intermediary (these guys are not going to work for free). For small monthly purchases to assuage fears of investing a large chunk of money at the “wrong time”, you could explore https://www.sc.com/sg/ways-to-bank/online-trading.html which does not charge a minimum commission (which necessitates a sizeable minimum order quantity (MOQ)).

    3. http://www.etf.com

      • CYJ says:

        Hi Andrew,

        Really enjoyed reading your blog. And this really came at a great time as i just started working and would like to work out a savings plan.

        Would like to get your advise on what would be a suitable regular monthly investment should I decide to use DBS Vickers and would like a portfolio with 40% S&P ETF (VFINX), 40% STI ETF (ES3) and 20% ABF Singapore Bond ETF (A35.SI).

        Given that the minimum commission for:
        – U.S market on DBS Vicker is Minimum USD 25 or 0.30% of trading principal (whichever is higher)
        – Singapore market on DBS Vicker is Minimum SGD 25 or 0.28% of trading principal (whichever is higher)

        To keep commission rate low at 1%, should the following investment amounts be used for the regular dollar cost averaging method?:
        – At least USD 2,500 each time into S&P ETF (VFINX)
        – At least SGD 2,500 each time into STI ETF (ES3)
        – At least SGD 2,500 each time into ABF Singapore Bond ETF (A35.SI)

        Total about SGD 8,000.

        If the above is correct and assuming that each month, I plan to set aside SGD 1,000 a month, should I then invest only at a regular interval of 8 months?

        • CYJ,

          That’s a very good question. I suggest buying just one index at a time. In this case, you would be buying far more frequently, like every couple of months. You may also find that Standard Chartered offers lower commissions for small amounts. They gouge investors a bit on exchange rate spreads (to make up for this!) but two of your indexes trade in Singapore dollars. So this won’t affect you with those.


  218. Charles says:

    Hi Andrew,

    Good day! Hope you are all doing well.

    May I have your opinion on the confusion?

    I am thinking of the ‘30% in the world stock index (VT)’ portion that you have mentioned here. I would prefer to use all securities that are listed in SGX, and as such, I found there are 2 similar securities, which are:

    – db x-trackers MSCI World Index UCITS ETF (J0P)
    – Lyxor ETF MSCI World (H1P)

    Both are having TER of 0.45%.

    When I am trying to plot the performance of both ETFs + VT (i.e. https://www.google.com/finance?q=SGX:J0P&ei=VYZIVODLBsLAkgXakICoDw), I found that J0P seems to be similar to VT whilst H1P looks different.

    Furthermore, for the Singapore stocks portion, I am thinking of using Nikko AM STI ETF (G3B).

    As such, if I were to follow your suggestion on the portfolio, would it be anything that I need to consider further to have the followings?

    – Singapore Bond index (A35)
    – Singapore stock index (G3B)
    – World stock index (J0P)

    Note: Bond allocation would follow my age (e.g. if I am 30 year old, I will place 30%) with the remaining of Singapore stock and World stock to be split equally (e.g. 35% each, following the bond’s example).


    • HI Charles,

      The portfolio of the three ETFs you listed would serve you well. As for different returns for different global ETFs, they could have slightly different allocations, which may explain differences in return. Long term, however (15 years +) performance should be roughly the same. One of them won’t necessarily be better or worse because it has outperformed during the past five years. Roles would likely flip the following 5 years.

      That said, your portfolio is solid, but consider going light on your bond allocation. As a Singaporean, your CPF is basically a bond. As such, you could limit your portfolio bond allocation significantly. You may choose just 15% bonds. Heck, you could even scrap the bond allocation altogether because your “bonds” are wrapped up in your CPF.


  219. Peter says:

    Hi Andrew,
    I recently finished reading Millionaire Teacher. I have a few questions that I would like help with if you could. I’m a 22yr old student who is thinking of investing. How do you recommend someone like me to start from?
    Do I go on dbsvickers or fundsupermart to start from? How much do you recommend for a student to invest?
    Sorry if these questions have been answered before. I’m terribly new in investing and I would like to start now(better late than never!).

    Thank you!

    • Justin says:

      Hi Peter,

      Not Andrew, but went through your path, so hopefully my experience would be of use.

      Fund Super Mart: You will pay too much in manager fees versus a passive index fund from Vanguard.

      DBS Vickers: As a student, I do not suppose you would have enough cash to purchase a quantity of stocks for the minimum commission to make economic sense. Vickers charges minimum USD 25 or 0.30% of trading principal (whichever is higher).

      Standard Chartered: Has no minimum commission charges which allows for investing smaller amounts on a monthly basis. This in normal circumstances would make the most sense for a student; however, they have working / trading experience criteria that you may not be able to meet.

      Assuming you are unable to fulfil SCB’s requirement, the best thing to do is to open a Vickers trading account, invest what you can until the time comes when you are able to open a SCB account.

  220. Kelvin says:

    Hi Andrew

    Any updates on when your new book is out? I would like to know on the updates on different brokerages charges. Can you also share some insights on what your new book is covering? Thanks.


  221. Luke says:

    Hi Andrew,

    I have just given some money to one of the money managers here and am underwhelmed by the performance. They wrapped everything around a skandia insurance product and suggested that that saves on fees and provides a good structure for expats. What do you think of this? And if I wanted to could I just take all my money out and invest it myself in your sensible strategy.

    Question 2 is what are your thoughts on higher yield bonds like the ADIB perpetual bonds that return over 6%. Too high risk? Citibank is telling me they can buy that bond but charge 0.5% for it. Can I buy it myself (on SCB’s platform that I use?)

    Thanks for the response, I don’t envy you with all the thousands of questions you are now getting!

    • Hi Luke,

      If possible, remove your money from the Skandia product. Without realizing it, you are going to pay roughly 4% per year in annual fees. The salesperson got you into such a product because he (or she) earned a whopping commission for doing so.

      Also, in a climate when interest rates are low (such as what we are currently in) do not go for a bond paying 6%. The risk is far too high, and you could end up losing plenty of money. If you haven’t already done so, please have a look at my latest book. When doing so, you’ll understand more about Royal Skandia. You won’t like what you read. And I only hope you can remove your money without penalty. Such penalties could be as high as 80% of your total proceeds. Here’s the link to the book. Check out the 6th chapter: http://bit.ly/globalexpat


  222. Tony says:


    I’ve just finished reading your book, millionaire trader and just gotten started with formulating my long term investment portfolio.

    1. Could you share your view on whether it makes sense for a Singaporean investor to replace SGX listed ETFs with US listed ETFs which may have lower expense ratio?

    2. Now that both equities and bonds are both at elevated levels, should one be concerned?

    3. If I have CPF contribution, how should I decide how much my bond allocation should be reduced?

    Thank you.

    • Hi Tony,

      Make sure you don’t buy a U.S. listed ETF. Otherwise, as I mentioned in my latest book, your heirs will have to pay U.S. estate taxes.
      I don’t speculate about bond and stock prices. And I don’t think you should either. Just build the portfolio and rebalance each year. As for your CPF, consider the entire amount a bond. Depending on what it’s worth, you may not need to buy bonds. Here’s the link to my latest book, which I think you will find very helpful, whether you’re an expatriate or not: http://bit.ly/globalexpat
      You should also be able to find it in local, Singapore bookstores.


  223. Jaron says:

    Hi Andrew,

    I finished reading both of your book. It was well written. However, i just want to clarify the way i am doing is it alright. As in Singapore, the local brokerage charges are high if you want to invest in international or US fund. I open a discount brokerage account and decide i should use that to invest in the US market, since the charge cap is 10 USD. For local market i used CIMB prefund to invest, until i a qualify for SCB criteria. I currently invested in the following

    Nikko AM STI ETF (G3B) around 45%
    Singapore Bond index (A35) around 30%
    SPDR S&P 500 ETF around 25%

    Am i doing the correct way, i am also quite new to this as i am a speculator last time.

    • Hi Jaron,

      It all looks good, except that U.S. ETF. The one you listed above trades on a U.S. exchange. So your heirs will be liable for U.S. estate taxes. I explained this in my book, so have another look. I gave some U.S. ETFs you could use instead, which trade on different markets. You could buy one of those, from Singapore, instead.


      • Jaron says:

        Thanks a lot Andrew for you guidance, appreciate it very much

      • Jaron says:

        Hey Andrew

        I was buying a lump sum by lump sum of different index. i bought Nikko AM STI ETF (G3B) around 45%
        Singapore Bond index (A35) around 15% and ABF pan asia bond 15%. When i wanted to take your advise of buying VWRD from UK-EXCHANGE. i realize my broker do not offer it.. do u have another recommendation?

  224. Karen says:

    Hi Andrew, I just finished reading your book and loved the chapter “Sample a Round-the-World Ticket to Indexing”! In it, you gave examples for US, Canada, Singapore and Australia. Can you please give an example for EU? What would the EU version of this quote be?

    “Here’s what a balanced portfolio could look like for a 50 year old:
    40% in the Singapore Bond index (A35)
    30% in the Singapore stock index (ES3)
    30% in the world stock index (VT)”

    Thanks for your clarification!

  225. Ashwin Mani says:

    Hi Andrew,
    We have read both your books and plan to open an online brokerage account soon.

    Just wanted to understand if there was any particular reason why you do not recommended online brokerages of Citibank and Stanchart.

    Look forward to hearing from you


    • Hi Ashwin,

      Standard Chartered is fine. But Citibank will only allow you to buy U.S. domiciled ETFs. Remember the American estate tax!


      • Ashwin Mani says:

        Hi Andrew,
        Thank you for your prompt reply (even in the holiday season) ! Really appreciate !

        We were doing a comparison (based on the tables 13.1, 13.2 of your new book) by including Standard Chartered along with the DBS Vickers, Saxo and TD Intl (included by you)

        We found that Standard Chartered doesn’t charge any account fees (similar to DBS Vickers and unlike Saxo and TD Intl who have account / custody fees) and their trading commission works out to only 0.2% of the purchases made, without any limit or a minimum amount (unlike minimum $29 per purchase through DBS Vickers, and $30 and $ 25 charged by TD Intl and Saxo respectively)

        For a minimum investment of $1000 per month – the $29 of DBS Vickers works out to almost 2.9% trading commission, while Standard Chartered works out to only $2 (0.2%)

        Considering that you have always advocated keeping the costs low, we were wondering if there’s anything that we are overlooking or missing by going through Standard Chartered and if there was any reason you have not included or recommended the same in your book ?

        Additionally, I believe you recommend to buy US ETF’s through non-US stock exchanges (to avoid the American estate tax)
        Amongst the various non-US stock exchanges – Canadian, UK, Australian, Singapore, Hong Kong – is there any advantage of buying via one stock exchange over the other (say in terms of charges or fees) ?

        Look forward to hearing from you

        Also wish you and your family a Merry Christmas (belated) and a happy new year !

        • Hi Ashwin,

          Standard Chartered is good. But when I called them, they said investors had to live in Singapore to open an account. That isn’t the case with the other brokerages I compared in my book. They also gouge you a bit on currency conversions. I found that when deposits (trades) were usually involving a higher sum, DBS Vickers was cheaper, after all commission currency rate charges + trading commissions. These brokerages all get you, one way or another. But they are far far better than actively managed alternatives.


  226. Steven says:

    Hi Andrew,

    Thanks for creating a comment page that introduce index investing to Singapore investors.
    I have read all the pages in this section and it seems that many local investors are concerned about the dividend withholding tax and estate duty tax when getting a US based VT ETF. What is your take on VWRD ETF listed in LSE? I understand that the withholding tax is 15%, instead of 30% as in the US. The only thing I am not sure is the uk inheritance tax, can you shed some light on this?

    Thanks and wish you and your family a happy New Year!

  227. Jaron says:

    Hey Andrew

    I was buying a lump sum by lump sum of different index. i bought Nikko AM STI ETF (G3B) around 45%
    Singapore Bond index (A35) around 15% and ABF pan asia bond 15%. When i wanted to take your advise of buying VWRD from UK-EXCHANGE. i realize my broker do not offer it.. do u have another recommendation?

    I just checked, DBS offer it, but the commission is high, i am wondering if i should buy the Canada exchange instead of UK one? Is there any pro and con of it?

    Please do advice Andrew and thanks in advance

  228. Cal says:

    Dear Andrew,

    Awesome site and thanks for sharing your wisdom.

    I chanced upon this Singapore thread after reading Tony Robbin’s new book “MONEY Master the Game: 7 Simple Steps to Financial Freedom” where he talks about Ray Dalio’s All-weather portfolio, and was doing a search on how to implement the strategy in Singapore. I noted your couch potato/ permanent portfolio strategies offer somewhat similar asset allocation, with varying % of course.

    My portfolio is currently very heavy on equities and a rebalancing is definitely needed. Also I have an account with e-trade which shall be liquidated because I realize I am not protecting my estate adequately, and I should probably open an account with Saxo.

    It appears from your strategy, and for tax simplicity, that one buys:

    ES3- STI index
    VT- World stock index
    A35- Singapore bond index

    If one wants more exposure to Pacific, US or World bond indexes, what would you recommend? What about commodity indexes?

    I am attempting to build a portfolio which would consist of:

    Equity: 50%
    Bonds: 35%
    Gold: 7.5%
    Commodities: 7.5%

    Also as a local Singaporean, since CPF is locked up, considering utilizing CPF for investment in equities for long term, and utilizing the liquid assets (cash) to invest in Bonds where they are less volatile. Although the execution will probably be a little more complicated with annual rebalancing, etc.

    Thank you in advance. Keep up the good work.

  229. Ning says:

    Hey Andrew!

    I am a Singaporean and have just got to know about the posb invest-saver program where I can invest in Singapore bonds and Blue Chip Stocks for just $100 a month. It is more affordable than DBS Vickers as you mentioned that you would recommend to invest at least $3000 at one go because of the fees. Do you mean $3,000 for each bond and stock market indexes? Do you think the posb invest-saver will be a good investment? But then, it wouldn’t give me an exposure to the world stock market. As you said, it would be better to spread the investment in Singapore bonds, Singapore stocks and World stocks. How do you think I should do then? Would like to hear your advice on this. Please correct me if I have misunderstood anything.

    Thanks in advance!

  230. Paddy says:

    Hi Andrew

    I have just ordered your book and looking forward to reading it.

    I am a British expat based in Singapore. I would like to start investing in ETFs and am considering using my bank HSBC. I haven’t seen HSBC suggested at all on your pages so was wondering if you have a view on it? Here is the link

    • Paddy,

      HSBC would be a viable option for you. Just make sure they will let you keep the account open (and let you contribute to it) if you move to, say, Thailand or Malaysia for work.


  231. Paddy says:

    Thanks for the response Andrew, much appreciated. Will ask them.
    I think HSBC in Singapore only allow you to buy stocks listed on HK and SGX exchanges which is a bit limited…

    • Based on the link you provided, Paddy, it suggests you can buy off other exchanges as well. But double check that also.


      • Paddy says:

        Hi Andrew

        I emailed HSBC and their response is as follows:

        “We advise currently through HSBC’s Securities Trading Services, customers can buy and sell securities only in two markets – Singapore and Hong Kong, via our dedicated Central Dealing Desk. Do note that this service is exclusive to HSBC Premier customers.”

        This seems a bit limited as I would like access to the UK market…


        • That’s too bad Paddy. No worries, you could use Saxo Capital Markets or TD Direct International.

          • Paddy says:

            Thanks Andrew, I will have a look at Saxo as well.

            I was attracted by HSBC securities for the opportunity to use them as a one-stop shop (both my UK and SG accounts are with them so it’s quite handy to have everything in one place).

            My question is if I decide to go with HSBC regardless, is there any particular disadvantage to building a balanced portfolio of index-linked ETFs listed solely on the Singapore exchange? I’ve read concerns about liquidity although I understand they have market-makers in place to ensure there is no difficulty selling. I’m sure wondering if there is an added risk as from a tax perspective it seems great. I am likely to be in Singapore for at least the next 5 years…

            Many thanks,


          • Hi Paddy,

            The ETFs on the SGX are synthetic. This means you wouldn’t own the stocks within each index. It’s more like a promissory note, where the institution promises to pay you the market value when you sell. In such a case, there’s added counter-party risk. And liquidity is low.

  232. Paddy says:

    Hi Andrew

    First of all can I say thanks for the quick responses…I assumed you would be off enjoying your millions rather than responding to retail investors with no clue what they are doing such as myself! it is very much appreciated.

    I looked at the the various ETFs. I am interested in the following with appear to be cash based:

    A35 ABF SG BOND ETF Fixed Income 0.27 Cash
    ES3 STI ETF Equity 0.3 Cash
    I17 IS S&P500 10US$ Equity 0.07 Cash

    Are these not cash based as opposed to synthetic? In addition if i don’t want to sell for at least 10-15years should i be worried about low liquidity? I would not be wanting to sell anytime soon and just plan to re-balance when required.

    Apologies for all the questions…this is literally the first time i’ve spoken to someone about specific investments…most the ‘financial advisers’ out here just seem to want to make money out of me!


  233. Wei Jun says:

    Hi Andrew,

    Wonder if you covered this in any of the above comments, but decided to just ask you anyways.

    Would like to find out about your opinion and advice about the upcoming Singapore Savings Bonds in comparison to the bonds index funds you recommended? how do you think they fare against each other, are they considered to be subsitutes as a diversifying and relatively more stable component in one’s portfolio?

    Looking forward to your response. Thanks! 🙂


  234. Alison says:

    Hi Andrew,

    I’m a Chinese. Do you know if I live in China can I using US dollars to buy the ETF? How can I do that?
    Thank you! Looking forward to you response.


  235. John says:

    Hi Andrew,

    Wonderful work like everyone else has said.

    Just wondering if there’s an index that tracks the entire Singapore stock market, in the same way that VTI tracks the entire US market.

    I don’t seem to be able to find any, and I don’t think it’s from a lack of trying! I’m slightly concerned about the STI ETF (ES3) tracking only 30 stocks. Granted the 30 biggest local names, but all the same it doesn’t appear too diverse. Thoughts?

    Much appreciated,

    • Josh says:

      Hi John

      I think ES3 is the best available tracking the Singapore market. For me it is good enough and my money is in it.


  236. Chris says:

    Hi Andrew,

    Thanks to your book, after a long time planning I am now 6 months into building my portfolio!

    I really only have 1 burning question remaining before I feel I fully understand what we are trying to achieve.

    You recommend short term bond indexes for the bond portion of the portfolio.

    I understand that short term bonds are safer than longer term bonds as long term bonds, whilst providing higher possible returns, could react more sharply to rising interest rates.

    However, looking at, for example, Vanguard’s US Short Term ETF, the annual return for the past 5 yrs is typically somewhere around the 2% mark. Is there any reason to invest in a bond index such as this opposed to a savings account? For example, in New Zealand, i can get around 4.2% in a savings account with no comittment.

    Is there an element of bond investing that I am failing to understand, or is it satisfactory to replace the bond portion of the portfolio with ANY ‘safe’ investment yielding say 4 or 5%?

    If you can enlighten me on this, my gratitude will be complete!

    FYI I am currently holding-

    Vanguard Total US Stock ETF VTI
    Vanguard Total International Stock ETF VXUS
    Vanguard Short Term Bond ETF BSV
    iShares UK Gilts 0-5 yrs ETF IGLS

    Thanks for your help,


    • Hi Chris,

      Bond prices can rise at any time. When stocks fall, bond prices often rise. If the stock market fell 40%, your bond prices may gain 15%. That’s why the rebalancing makes sense over time.

  237. Josh says:

    Hi Andrew

    Great to read that both of you are enjoying your time in Bali. We also visit Bali at least once a year.

    Currently, I am investinq into the equity portfolio of my index funds every 1-2 months. I am not rebalancing to my Bond as I need my equity to catch up to my target allocation. My bond portion is the CPF.

    What concern me is that markets continue to climb to new high every time I inject new funds. I know we are supposed to ignore the short term movement and focus on the long term but I cannot help it!

    I am just curious what adjustments are you doing now and should I just continue to invest into equity as long as I am within my target allocation.


  238. xling says:

    Hi Andrew,

    Thank you so much for the information. And it is specific for singapore… What a pity that I read it so late.
    May I know that does your suggestion still apply today, when the market are so high now?
    And by still keeping the portfolio, should I use recursive buy in plan, let say one per month?

    • Chris says:


      I can’t answer for Andrew, but the message I understood from his book is that you don’t know if the market is currently ‘high’, or ‘low’… you don’t know what it will do, it may keep climbing for 10 years…and to try to guess is trying to ‘time the market’ which we shouldn’t do.

      In fact, if you are starting out, you should hope the market starts to decrease, as then each month your money will buy more and more units!

  239. Thinh says:

    Hi Andrew,
    I am interested in investing in stock market and ETFs.
    I want to open an account for trading.
    Please advise which bank that have advantage of fee.
    Thank you.

  240. Thinh says:

    Oh, I am working in Singapore.

  241. Xlingzhu says:

    Hi Andrew,

    I have a operation question for maintaining the portfolio. E.g., if I invest 1/3 in bond etf, 1/3 in ES3, 1/3 in global market etf. Assume that we need to trade the global market etf in USD. So after one month, if the index of all the three remain the same, however, the usd/sgd increase, this reflect that the global market portion is less than 1/3 in term of SGD. But I don’t think I should buy in the global market etf as this time, because usd is expensive.

    • It sounds like you are trying to speculate Xlingzhu. That’s the opposite of what I suggest in my books.


      • Xlingzhu says:

        Instead of saying speculate, I may not fully understand how to calculate the portfolio. For example, if I have
        1000/1000/1000 to invest, but it doesn’t mean my porfolio is 1/3 for each due to the different index’s price. And when calculate the porfolio, I should use same currency? Please correct my understanding.

  242. Ning says:

    Hi Andrew,

    I have just finished your book, and I am very eager to move ahead with my investment plans. I am Taiwanese, and have been in SG almost all my life, hence my portfolio is likely going to be just SG bond, SG index, and international index.

    I am very confused about where to start though:
    1) Is there any tax liabilities (in SG or US?) for me to purchase VTI, or VEA? (I’m not SG PR, still holding Taiwanese citizenship)
    2) I see you are using/recommending DBS Vickers. I have some friends working in international schools here in SG, and they are using SAXO. Is that really better, or cheaper (in terms of commissions/fees) than DBS Vickers?
    3) Just curious… What would you recommend for my portfolio?

    Thanks a million!!! 😀

    • Hi Ning,

      To do your questions justice, and to avoid redundancy, I would like to point you to the book I wrote that covers everything you will need to know about investing in Singapore, including different brokerages and U.S. tax liabilities for different ETFs. http://bit.ly/globalexpat


  243. Edmond says:

    Hey Andrew,

    Thanks for the clear and knowledgeable writings!

    I would like to know if savings plans by insurance companies (such as: can replace a significant portion of bonds in our portfolio?

    These plans offer:
    1) Almost no risk (equivalent to bonds) except the default of the company
    2) A projected total return of 3.25%-4.25% over 30 years. (not compounded returns Y-O-Y though)

    My hunch is that you can get higher returns by investing in bonds yourself, but in my research so far it doesn’t seem all that clear that bonds do give higher returns. In particular, ABF Bond ETF doesn’t seem to give return close to that offered by savings plans. In fact, if savings plan do meet 4.25% total return, it might be quite hard for most bonds to beat it.

    Any guidance on that? I might have missed out some things, keen to hear your view.

    Keep up the good work you’re doing!

    (I just posted the same comment on turtleinvestor.net, who also recommends you in his writings. Kudos to you both.)

  244. penny says:

    Hello Andrew,
    For the funds you recommended with DBS Vickers, can we invest with CPF funds too?
    2)Can we have odd lots of each share like to$5000 in theA35 with odd lots of the3600+ shares?

  245. fanto says:

    Hi Andrew

    i was taking your advise of avoiding US base ETF, to avoid the tax. Then i came across two other ETF which is base in Canada and other base in UK. Is there any different between the two exchange ? Because DBS only offer Canada market for online, while the UK market had to be bought through phone. I am left with only global exposure and not knowing how to continue.

    • Fanto,

      If you’re buying off the UK exchange, you will pay a 1% commission for each trade. If you buy off the Canadian exchange, online, you will pay 0.5% commissions. There’s an excellent global ETF available on the Canadian exchange that combines all global markets, including the U.S. market. I can’t recall its symbol, but you can look it up on iShares Canada. It has an expense ratio of 0.2%.

      • fanto says:

        Hi Andrew

        Thanks for your fast response, so i looked around at IShares looking for the ETF you will saying and recommend in your book. So far i narrow down with three ETF .

        1) iShares Core MSCI All Country World ex Canada Index ETF (XAV) Inception Date Feb 10, 2015 (This ETF has the expense ratio of 0.2%) Track most countries beside Canada. But it is one of the newest ETF

        2) iShares Core MSCI EAFE IMI Index ETF (XEF) Inception Date Apr 10, 2013 (expense ration of 0.2%) Track most countries but without US in it.

        3) iShares MSCI World Index ETF (XWD) Inception Date Jun 18, 2009
        (expense ratio of 0.47% the most expensive but oldest) track most countries

        Which will be the better choice? In my own opinion, i want some US exposure, or it will be good not to have? And will the newest ETF cost any effect? XAV seem like a good choice

  246. Kapil Kumar Chugh says:

    HI Andrew,
    I am from India and working on an Employee Pass at Singapore. Am looking forward to invest $500 a month in the ETF’s. Please suggest the bifurcation I should make while buying the units.

    Thanks in Advance

  247. Wilco says:

    Hi Andrew,

    I’ve finished your latest book in 2 days, great book!

    I’m a Dutch expat living in Dubai. I’m considering opening up an account with TD international in Luxemburg. In the book you recommend buying iShares (or Vanguard) of the UK stock exchange. Why do you choose the UK exchange? For Europeans, retiring in euro’s, wouldn’t it make sense to choose Amsterdam or Frankfurt?

    I notice that everything is based on ETF’s, I understand the difference between ETF’s and index funds, what is the reason you recommend ETF’s? Is even possible to invest in index funds without getting involved in U.S. Inheritance tax?

    Thanks Wilco

  248. JS says:

    Any thoughts on Temasek Holdings’ portfolio (based on geography) of:

    Asia ex Singapore 42%
    Singapore 28%
    North America and Europe 17%
    Australia and New Zealand 9%
    Africa, Central Asia and Middle East 2%
    Latin America 2%

  249. Jimmy says:

    Hi Andrew,

    Recently i spoke to my insurance agent on retirement planning, and i was shown a saving plan. In total over the 10 yrs of paying of premium, the distribution cost is around 7%.

    Is there a way to avoid such high cost? ETF?
    Thank you.

  250. Ken says:

    Hello Andrew,
    First of all thank you so much for getting the word out on index funds. I’m glad I discovered your blog (relatively) early and so I have a good amount of time to grow my wealth.

    It occured to me after some reading that it might be worthwhile to use technical analysis techniques like moving average crossovers to determine the best time to put money in the market.
    Using today as an example: I would like to rebalance my portfolio within the next 3 months, but at this time the markets are going down. The crossover of the 50 and 200 day moving averages (the “golden cross”) would serve as an indication that the market has already bottomed-out (and is on the rise). I would therefore prepare to invest upon this signal.

    I tried plotting these moving averages on google finance for a few ETFs (SPY, STI ETF …) and the moving average crossovers seem to work i.e. the intersections are a short-medium period after the absolute bottom of the market.

    I know you aren’t big on timing the market, but to my mind the penalty is merely a few months in the market with the potential of significant gains.
    Do you think this strategy’d work (this is based on back-fitted data after all) or am I being naive?

  251. SEH says:

    HI Andrew
    thank you so much for your teachings! came across your website accidentally and was so agreeable with what u said that i immediately went through your recommended book-list including your book “The Global Expatriate Guide to Investing”. a pity that i came across your book a decade too late and ended up in a Investment linked policy which i am determined to bite the bullet and withdrew – a spread of 5% with > 1 % management fees!

    planning my portfolio as followed; 34 yr old btw
    – 30% = CPF/ BONDS
    – 30% = straits time index
    – 4% = WDSC UK stock exchange ; world small cap
    – 8% = PSRW UK stock exchange ; global fundamental indexing
    – 28% = VWRL UK stock exchange; global large and mid cap

    i decided to use part of my international component for small cap and fundamental indexing to hopefully boost my portfolio
    – any advice?

    once again thanks for your teachings!

  252. SEH says:

    I have put aside a sum on money waiting for business investment opportunities with a time-frame of 2-5 years. where will u advise to park this sum of money which may be activated at a short notice – fixed deposits or into ETFs in money market or bonds? any other options?


  253. Yi Lin says:

    Hi Andrew … After reading your first book, I started on my monthly investment into STI ETF (ES3) under Philips Securities’ Share Builder Plan for 9 months now. The fee is SGD6.42 for monthly single investment less than SGD1001. Dividend be “taxed” at 1%.

    • Well done Yi Lin! Keep investing, regardless of what the market does. If possible, add an international index and rebalance once a year. Or, you could add fresh money to whichever index is lagging that month: the Singapore index or the international index. Because you have CPF, there’s no need for bonds.


      • Yi Lin says:

        Andrew, I’m grateful for your suggestions! They are helpful and I’m confident to embark on my “fine-tuned” investment portfolio.

  254. Yi Lin says:

    Hi Andrew … After reading your second book, I decided to launch my couch potatoes portfolio. I’m a Malaysian working at Singapore for more than 10 years.

    Since I have an existing investment account with Philips Securities (PS), I didn’t open another brokerage account as recommended in the book. Let me know it is not a good decision. Ha!

    I checked out the fees from PS for trades purchase at London Stock Exchange for iShares (World Index SSAC and World Govt Bonds SAAA) and Vanguard World Index (VWRL in GBP or VWRD in USD). How to choose if the same ETF which has a choice of 2 currencies? The fee per trade … 0.4% or min GBP25 and additional 0.5% stamp duty for trade purchase. PS will “tax” our dividend at 1%.

    I’m quite “shock” to discover the high brokerage fees to trade at LSE compared to SGX. However, the ETFs I have in mind are not traded in SGX. Just a personal choice, I’m not keen with “ABF A35”.

    • Hello Yi Lin,

      As I mentioned in my book, the true currency you are investing in will be the currency of the holdings, not the currency that the ETF is priced in. If you, however, earned USD, I would suggest going with the USD ETF. If you earned Euros, go with the same ETF priced in Euros. If you earn Singapore dollars, it really doesn’t matter. In each case, you will be paying a small currency exchange spread. Other than that, there is no advantage or disadvantage. Always remember, this isn’t an investment in a currency. It’s an investment in the underlying products within the ETF itself.


  255. HA LAM NGUYEN says:

    Hi Andrew,
    I’m Ha Lam, 35 years old, Vietnamese. By chance I had read your book and I very thank you for it. I also see your web site. But I have some questions as follows:
    – Can I invest each month about $ 100 on all 3 funds: the Singapore Bond Index (A35); the Singapore stock index (ES3); the world stock index (VT)? Fees may change if bigger money?
    – Now I’m in VN, How to sent or received money from the broker in Singapore ?
    Thanks & Best regard

    • Hello Ha Lam,

      Because you would pay a minimum commission per purchase, it would be better if you saved up about $2000 first. Purchase one of the indexes with that $2000. Then save the next $2000 and buy the next index. Then save again, and buy the next.


  256. Brendan says:

    My company provides an offshore pension fund which I have little control over how the contributions are invested. The fees look high, and performance not great, but they pay 6% to my 3%, so I can’t complain too much.

    My question is regarding my overall portfolio. If I redirected all my funds to a bond index with the offshore pension, should I consider that as part of my overall portfolio (in term of my asset allocation)?

    Or should I treat this entirely separately, and invest in bond indexes outside of the pension fund also.

    • Brendan,

      Think of your entire asset base when considering how much exposure to stocks you should have. For example, CPF is a bond investment (of sorts). As such, most Singaporeans, because they must contribute to CPF, shouldn’t bother buying bonds—they already have them with CPF.


  257. Shan says:

    Hi Andrew,

    Just came across your blog and have put in an order for your books! Wish I had read your books and postings way earlier! I am a Singaporean and am intending for my asset allocation to be 35% STI index 35% world index and 30% bonds.

    I am currently searching for a World Index that would be best for a Singaporean – You recommended VT – but I think there would be 30% withholding tax on dividends? Would there be any other global indexes you recommend that would have low transaction/ commissions/ taxes for a Singaporean?

    Also, do you do Dollar Cost Averaging through DBS Vickers? Wouldn’t the cost of the commissions/ initial charge (esp the minimum charge of $25) be prohibitive?

  258. Helen says:

    Hi Andrew,
    I can’t find a thread that addresses my situation: I used a financial advisor for years and now regret it, coming up for retirement in 5-8 years, wanting to save hard until then and have income after about 10 years. I am from, and will retire to, UK. Not a lot of time I know… do you have any advice please?

  259. Caroline says:

    Hi Andrew

    Just finished reading your books – really useful and easy to understand. I wish I’d known what I know now two years ago when I signed up for a Generali Vision account! Very angry with myself for not doing my research. That’s another story and I have some tough decisions to make over the next few weeks about whether to close the account and lose around $20k or whether to keep it going.

    Anyway, my question is do you have any recommendations or advice as to an investment strategy for a 47 year old “economic refugee” from Zimbabwe currently living in Singapore who has no idea where she’ll retire?! I have a lot of catching up to do but am finally earning a decent salary and could probably invest around US$5000+ a month.

    Any advice is most appreciated. Thanks.

  260. Ryan says:

    Hello Andrew,

    SGX hold 2 Singapore Bond ETFs – A35 and PH1S. A35 has a shorter duration and PH1S shorter.

    Which would be more suitable for the portfolio that you are suggesting and why?

  261. Ipsita Basu says:

    Hi Andrew,

    Really like the easy to use strategies. I do want to know what the selling strategies would be though. I mean if I wait till retirement to sell, it is quite possible that in a certain ETF (perhaps a bond ETF), my selling price is the same as my buying price.

    So, how do I time my selling? How do I do it if I need money by a certain date (date known in advance) for college tuition, house downpayment etc.?

    • Hi Ipsita,

      Such a portfolio is best served for retirement. It shouldn’t be invested for college tuition, unless you ensure that you slowly increase the bond allocation to the point where, when the child is 17, 100% of the money is out of the market. You would do this gradually. When the child is born, it could be 100% stocks. Each year, reduce the stock allocation by about 5%, increasing the bond allocation with the proceeds. Once college tuition is due, you sell the money market fund cash. You shouldn’t have college tuition in the stock market if you will need that money before a 3 year period.

      There’s actually a rule of thumb. Never invest any money in the markets that you might need within 5 years.

      As for selling a retirement portfolio, you would use the 4% sustainable withdrawal rule. As a retiree, in year 1, you would sell 4%. The next year, you would sell a bit more, to cover the rising cost of living. As such, your money could still grow while you need it, during your retirement years. And you shouldn’t run out of money.


  262. Jennifer Johnson says:

    Andrew-what advice can you give us during this turbulent economic time, when so many business and personal headlines tell us the world stock market including the USA is going to plunge and be in recession for years and years–more than we have ever known?! Of course people have said this before many times–and then the stock market rises-and I never ever worried before just kept on investing my bits of money monthly-but when I look at the world today and all it’s disasters and cruelties like ISIS and political instability etc I wonder if what they say is true–what if the market is completely down in 10-15 yrs time still? Like Ipsita above says–what happens if one needs one money–I am 45–imagine when I am 60 and it’s still like this. Perhaps I am joining the panic or just wondering if I should have a plan b,c and d!! (and even what this plan would be). Help–am I being neurotic by reading and thinking or being realistic (but still worried!).

    • Jennifer,

      Always remember that we’re much more globally connected and sensational than we ever used to be. The Internet has done wonders for headlines.

      There have always been wars. But I would guess that the past two decades have been among the most peaceful in history. Relatively speaking, few people get hurt or killed by terrorists. There are more domestic shooting deaths in a typical U.S. city in one year than are killed by terrorists in a decade.

      Likewise, headlines are always spouting off about the end of the world. But we were far closer to that in the 1960s, 70s, and 80s when nuclear war was a much more serious threat; when the countries with nuclear weapons aimed at each other were fighting against each other with puppets in wars around the globe (Korea, Vietnam, Afghanistan). Delve more into history and I think you’ll be much more comforted by the world today.


  263. Jennifer Johnson says:

    Following on from my above comment P.s.–yes I have a portfolio of ETFs base don the couch potato in your book–i added in gold though a property ETF (as I dont own a property).

  264. Ye Wint says:

    Hello Andrew, I have bought your book and read it for the first round. Thank you for the insights on investing and savings you have provided in the book. I would say these are valuable informations yet very practical and I particularly like its no non-sense approach to investing. All of us want to invest and save for future but just do not know where to start. 🙂 As I understood you are based in Singapore, are you still recommending to use DBS Vickers as preferred brokerage farm? Do you have particular recommendation or warnings for a rookie investor in Singapore? Thank you.

  265. Wk says:

    Hello Andrew,
    I have read your book a few years ago and have followed your advice to invest and it has been great! My portfolio currently is 45% sti etf (es3) 45% vanguard total world (vt) and 10% Sg bond(a35). I am a 30 year old Singaporean. Have been reading the comments above and there were mentions about the US estate tax. Was wondering if I should switch to an etf based on Canada markets as recommended in a few comments above?

  266. Gary says:

    Quick question Andrew – After reading your book I’m about to start trading with DBS. I’m from the UK, but live in Singapore, and will retire in one of these two countries. My portfolio will be 30% global stocks, and 35% other stocks and bonds. However, i’m unsure if these should be UK or Singapore-based / or an equal split of each. Thanks!

    • Hi Gary,

      In my book, I mentioned that DBS Vickers provides access to 3 exchanges: Canadian, U.S. and Singaporean. It doesn’t give you access to UK markets online, unless you are willing to go via phone banking and pay a 1% commission per purchase. It would be cheaper for you to use TD Direct International or Saxo Capital Markets.


  267. Richard S says:

    Andrew, firstly, thanks for two excellent reads I now feel much better prepared to invest sensibly for the future. Given the recent volatility am I better to drip feed rather than invest the lump sum I have saved? I also plan to make monthly contributions, does Standard Chartered allow investment in the below;

    The trackers I was looking at are;
    i-Share UK Gilts 0-5yrs – IGLS 20% allocation
    Vanguard UK FTSE 100 index – VUKE 40% allocation
    Vanguard All World – VWRD – 40% allocation

    the below which I believe are fundamental indexes (not cap weighted)
    i-Share UK Gilts 0-5yrs – IGLS 20% allocation (same as above)
    PowerShares FTSE RAFI UK – PSRU 40% allocation
    PowerShares FTSE RAFI All-World 3000 UCITS – PSRW 40% allocation

    Finally I will need to convert my sgd monthly contributions to GBP I presume? I guess it’s best to do this via a currency broker rather than Standard Chartered.

  268. Greg says:

    Hi Andrew, just finished reading both books – great reads.

    Thankfully I’ve never quite trusted the likes of Global Eye, AAM, IFS, etc. as they all basically tried to sell me the same product, Zurich Vista. Which at first sounded great with the expected returns but I could never quite got my head around the costs and why the penalties were so high if I had to pull out.

    I have instead been investing via ETFs (probably too many) through Philips Capital in Singapore – what are your thoughts on these guys as Singapore based brokers? I haven’t seen any comments on them on your boards… Are DBS Vickers or Saxo better options?

    Do you also have any thoughts on life/critical insurance insurance in general, outside the investment wrappers with Zurich, Aviva, etc? As I was born in the UK but also carry a NZ passport I am also mindful of HRMC claiming taxes upon death and therefore any inheritance.

    Lastly, I have a UK pension with a financial advisor and another firm – what is the best way to transfer these to an overseas platform, i.e. Singapore or NZ – is this even possible?

    Would appreciate any thoughts.


  269. Avinash says:

    Hi Andrew,

    I wanted to know the importance of dollar cost averaging when it comes to investing in index funds-is it still important to regularly invest small amounts rather in lump-some amount? I am asking this question because if you are going to invest small regularly, then the minimum commission fee of 25$ from DBS Vickers comes to about 2.5% of my monthly investment (1000$)? So what advise would you give to me in this situation? Is it advisable to invest in lump-some (say once in 6 months) and run the risk of timing the market? Thank you very much!

    • Hi Avinash,

      You’ll have to find a bit of a sweet spot. Because of the commission, consider investing no less than $3000 at a time into this account. That might mean just two deposits per year. It might mean just one. That’s OK. Each time you have $3000 to invest, make your purchase.


      • Avinash says:

        Hi Andrew,

        Oh ok. So assuming i could invest 3000$ per quarter, I could still benefit from dollar cost averaging while keeping sales charge at 0.83%.? Generally speaking, for index funds, what is the practical frequency for investing (once a month/ twice a quarter, etc) in order to benefit from dollar cost averaging? Thank you for your help!

        • Hi Avinash,

          Investing once a quarter will still give you the benefits of dollar cost averaging if you do it over many years.
          Best of luck. And congratulations on your approach!


          • Avinash says:

            Hi Andrew,

            Ok. I also wanted to now how liquid are index funds in singapore? Can I sell all of them instantaneously? With regards to the portfolio, I am looking at 10% SG bonds, 40% SG stock index and 40% world stock index, given that I am relatively young? Just wanted to also confirm if SG bond and stock index suit me given that I am in Singapore? Thanks again!

          • TO my knowledge, a non-synthetic world stock index doesn’t sell on the Singapore exchange. Any world stock index that you choose to buy off the UK or Canadian market would be highly liquid. Your Singapore stock and bond index should be liquid enough. Unless we are talking about trades in the tens of millions of dollars, you should be able to buy or sell any of them without liquidity premiums or restrictions.


      • Winson Yeung says:

        Hi Andrew,

        Regarding investing $3000 per purchase on DBS Vicker.

        Are we able to combine the 3 different index fund into 1 purchase and still pay 1 minimum fee?

        Or DBS will charge 3 times if we buy 3 different index fund?

        • Hi Winson,

          DBS will charge per purchase order. If you buy 3 different ETFs, that would be commission X3. This is why, if you’re starting from scratch, you might want to buy one at a time. Save up about $3000, then buy the first. When you have your next $3000, buy the second, and so on.


          • Winson Yeung says:

            Hi Andrew,

            Thanks for the fast reply. Which sequence will you recommend to buy first if I plan to invest $3k every 3 months?

            1. Singapore Bond Index
            2. Singapore Stock Index
            3. World Stock Index


          • Hi Winson,

            If you are Singaporean, keep in mind that CPF is much like a bond. In this case, if you can handle the volatility, you will get better longer term results by avoiding bonds, unless you want the extra stability. I suggest buying the Singapore stock market index first. It’s on sale. I wrote this article to explain it. https://assetbuilder.com/knowledge-center/articles/the-foreign-stock-market-index-thats-priced-to-jump


          • Winson Yeung says:

            Hi Andrew,

            Thanks, I will start to invest in Singapore Stock Index first.

            However, regarding the CPF. We won’t be able to withdraw money until we are age 55 (basically the money is struck there for retirement). Currently I’m only 26 years old.

            If I avoid bonds, will this have an adverse effect if financial crisis occur in the coming year where my SG and World stocks index will drop drastically?

            Should I buy these in sequence?
            1. SG Stock Index
            2. World Stock Index
            3. Bond Index (Optional?)

            Best Regards,

          • Hi Winson,

            Considering your young age, you should hope that stocks fall this year or next. You’ll be even luckier if they stay down for many years. I’m guessing this portfolio is for the purpose of retiring early, right? It takes many patient years in the markets to make a reasonable amount of money. And yes, your purchasing sequence sounds good. But go light on the bonds, if you buy them at all.


          • Winson Yeung says:

            Hi Andrew,

            Really appreciate your time to reply this. I’ve just finish reading your first book Millionaire Teacher and just bought your second book “The Global Expatriate”.

            And yes, the purpose of buying this portfolio is for early retirement and passive income.

            I’ve revised my portfolio allocation to reduce the bond section. What do you think of this new allocation?

            1. SG Stock Index (40%)
            2. World Stock Index (40%)
            3. Bond Index (20%)

            Regarding the Index Fund Investing strategy, am I safe to assume the annual return is around 8% t0 10% in the long run?

          • This portfolio good Winson. In the long run, yes, you should earn an average return of 8-10%. But keep in mind: you may go many years without even generating a profit. Markets move quickly. You never know when they are going to take off. In stock market terms, even a decade is short term.


        • Winson Yeung says:

          *I mean 8% to 10% return base on historical returns.

  270. Gisele says:

    Hi Andrew,
    I am a 30-something Indonesian living in Singapore earning SGD salary. I’ve read your first book and am really keen to start building my couch potato portfolio. However, I don’t know how many more years I’ll be in Singapore for. My husband is British and we are thinking of moving to London in less than 3 years time. In terms of retirement, we might retire in London but again, not so sure either as we are both global citizens. I still have family and property investment ties with Indonesia but it is unlikely that we will retire there.

    My question is, how should I allocate my portfolio as I earn SGD salary but I’m not Singaporean & don’t really know where I will retire?


  271. David says:

    Hi Andrew,

    I just read your book Millionaire Teacher and am thankful you have authored such a wonderful resource.

    I am a Singaporean and wanted to have your opinion on the cheapest brokerage to start indexing investing with a great selection of ETFs/index funds.

    Thank you,

  272. Royston says:

    Hi Andrew, I was recommended by a friend of mine working in Blackrock about you and after reading your book ‘Millionaire Teacher’ and following your blog, I am truly inspired.

    I came across that you had stated the estate tax in US which makes it not viable for me as a Singaporean, so to speak to purchase a S&P 500 or even an all-world ETF through US exchange. I am currently using philips securities and standard chartered and therefore my only choice of stock exchange to purchase these ETFs is London Stock Exchange.

    Now I know you stated that there is Vanguard UK all world ETF and S&P 500, and there is iShares UK all world ETF and S&P 500. Which do you think is a better choice in terms of low costs and effective returns. Thank you!

    • Royston says:

      Hi Andrew,

      I came across FTSE All-World UCITS ETF with 2 tickers, (VWRD) and (VWRL). What is the difference actually? Would be great if you could help!

      Thank you,

      • Royston,

        It’s exactly the same product. You will also get identical results, unless you’re unsure of what you are looking at when you do see their returns. Each is priced in a different currency. It adds to the convenience if you don’t have to pay a currency spread to buy an ETF that trades in the currency from which you are paid. For example, if you are paid in USD, and VWRD has a USD priced option, buy that one.

        Despite the different currency listings, always remember that the results are identical, when converted into the same base (common denominator) currency. One reader didn’t know that. He recently emailed, thinking that he had to speculate on which currency would do better because he saw different posted results in the same ETF.


        • Royston says:

          Hi Andrew,

          Thank you for your prompt reply. Now I know this has been asked a lot of times over here and I have searched thoroughly through this page. Currently I have POEMS and SC trading accounts and I am considering opening DBS vickers too. Currently I have ES3 shares in POEMS account. I am wondering for All World Index Funds should I use SC or DBS, or should I stick to Philips Capital? Can you shed some light here?


  273. Kay says:

    Hi Andrew,

    I’m a single 30 year old Canadian, currently teaching at an international school in South Korea. I read both your books and finally got around to opening a TD International account, however, I’m a newbie in all of this and still having trouble figuring out which ETFs to buy. Right now I have about 15k in the account, but I’m looking to invest about 50-60k more. I log into the TD site and I’m overwhelmed at what/how to choose/where to begin. Can you provide a little more guidance/insight?

    Thank you. I really appreciate your help. 🙂

    • Hi Kay,

      How about the model portfolio in my expat book? The one that Ian Page uses. I used his story to show a strong model portfolio. You’ll find his story among the Canadian chapter, couch potato investing. I’m sorry that I don’t have the book with me right now. Otherwise, I would dig up the page for you.


  274. Royston says:

    Hi Andrew,

    I am looking at purchase FTSE All-World UCITS ETF (VWRD), S&P 500 UCITS ETF (VUSA) and/or FTSE 100 UCITS ETF (VUKE). Do you compare the Net Asset Value with the market value, as well as the P/E ratio of the ETFs before purchasing? If the price is above the NAV or the P/E ratio is too high, do you still go ahead and purchase regardless?

    Would gladly appreciate your help!

    • Royston,

      You are asking me whether I speculate. As mentioned in both of my books, I simply build a diversified, low cost portfolio of ETFs over time. I rebalance once a year. No speculation required. I buy every month.


  275. Raven says:

    Hi Andrew,

    I am a singaporean with already an allocation of my portfolio in ES3 and some bond index. I am looking to divisify further now with some global index. keeping it in mind about the US death tax penalty, what index would you recommend? (not too interested in emerging markets now. looking for one global index that covers mostly developed countries and one that covers only the US. what do you think and what are your recommendations?)

    Hope for your prompt reply and help!
    Much appreciated.


  276. Raven says:

    Thanks Andrew.
    By the way, i just finished reading both your books and they are great!

  277. Andrew says:

    Hi Andrew,
    I am a student currently and I have saved up 20k to invest. After looking through your website and advice, I have decided on:
    20% SG Bond Fund
    40% STI ETF
    20% VTI (would a vanguard s&p 500 etf be any different from VTI?)
    20% VEA

    By rebalancing 2-3 times every year, this would be long-term, sustainable investment strategy to generate returns?
    Rebalancing is a term used very often, does it simply mean to sell off the winning portion of your portfolio, and simultaneously add more funds to top up the worse-performing portions? Is the capital gain from your winnings used to fund the lagging portions? with the different being your net capital gain?
    Or is income from capital gain of this portfolio, only realised at the end of 30-40 years? With you not collecting any capital gains along the way?

    Would I enter now with all 20k and buy up this set of index funds? I have this 20k ready to invest anytime. I have read the comments and most imply that going in with large amounts of capital, all at once would help to reduce costs.

    I really appreciate your down-to-earth and simple investment approach that is easy to emulate. My broker, my friends all try to talk me into active investing, picking out stocks, in hopes of beating the market. I guess what they are saying is all hogwash?

    Thanks so much! Off to purchase your book today!

    • Andrew,

      I’ll do my best to answer your questions.

      By rebalancing 2-3 times every year, this would be long-term, sustainable investment strategy to generate returns?

      There is no need to rebalance more than once a year.

      Rebalancing is a term used very often, does it simply mean to sell off the winning portion of your portfolio, and simultaneously add more funds to top up the worse-performing portions? Is the capital gain from your winnings used to fund the lagging portions? with the different being your net capital gain?
      Or is income from capital gain of this portfolio, only realised at the end of 30-40 years? With you not collecting any capital gains along the way?

      Growth comes from dividends and capital appreciation. The ETFs that have grown more in market price should be sold to buy the laggards once a year, maintaining a constant allocation year-to-year. Don’t sell everything. Remember the allocation.

      Would I enter now with all 20k and buy up this set of index funds? I have this 20k ready to invest anytime. I have read the comments and most imply that going in with large amounts of capital, all at once would help to reduce costs.

      Studies show that you should invest as soon as you have the money. See my link above.

      I really appreciate your down-to-earth and simple investment approach that is easy to emulate. My broker, my friends all try to talk me into active investing, picking out stocks, in hopes of beating the market. I guess what they are saying is all hogwash?

      There are speaking hogwash, unfortunately, because we don’t learn this in school.

      Best of luck Andrew


      • Andrew says:

        Hi Andrew,

        Thanks so much for your reply! Just bought your book, Millionaire teacher, cant wait to start!


  278. Andrew says:

    Hi Andrew,

    I am Andrew Ong from Singapore, currently waiting for university to start this year. After reading your website, I have decided to invest all my 20k savings into:

    20% SG Bond Fund
    40% STI ETF
    20% VTI
    20% VEA

    Would this be wise? Going in with 20k all at once? And is rebalancing the portfolio, 2 or 3 times a year, all that is needed to maintain a sustainable, long-term return?


    • Hi Andrew,

      Yes, investing a lump sum then adding to it is a very good idea. See my two posts here. You should avoid U.S. estate taxes. And because you have CPF, you won’t need a bond ETF. https://assetbuilder.com/knowledge-center/articles/-invest-a-lump-sum-or-dollar-cost-average-just-ask-a-rat



      • Andrew says:

        Hi Andrew,

        Oh ok, since CPF has a comparable interest rate with SG bond fund, it would just make sense to split it (without bond fund):
        40% STI ETF
        30% VTI
        30% VEA

        I have read through the expat investor article, so in essence to avoid paying US estate taxes, I would need to invest in VTI and VEA via a non-US broker? Sorry I still find it quite confusing, but it seems for Singaporeans investing in US ETFs, Saxo Bank would be the broker to use? And by using Saxo Bank, or any other singapore-based broker, I wouldnt be charged US estate taxes?

        I currently use philips/poems as my broker.

        Thanks so much for your help:)

        • Andrew,

          If you use Saxo (based in Singapore) to buy a U.S. listed ETF, your heirs would be legally liable for U.S. estate taxes.

          • Andrew says:

            Hi Andrew,

            So I should totally avoid US-based ETFs such as VTI and VEA, and find their parallel index funds in the Canadian market instead?

            Is DBS Vickers a good broker to start, with an access to the Canadian market?

            So now that VTI and VEA are out of the question, a portfolio I am looking at now is:

            40% STI ETF – Singapore exchange
            30% VUN (exposure to US) – Canadian exchange
            30% VDU (exposure to world) – Canadian exchange

            Would this breakdown be suitable for a Singaporean? And by using DBS Vickers as my broker?

            Thank you so much!

          • Yes Andrew, this would work well.

  279. Royston says:

    Hi Andrew,

    I am kind of confused as to this point between index funds and ETFs. When you say invest in exchanged traded index funds, are you talking about index funds or ETFs? I have found out that it is better for retail investors to invest in index funds and for institutional investors to invest in ETFs considering the managements fees, tax and etc.

    Please do enlighten me what do you mean on your blog by index funds. Are you loosely saying it is an ETF?

    Thank you

  280. Andrew says:

    Hi Andrew,

    I have researched into VUN vs VFV, and the VFV seems to generate a larger return. Would choosing VFV over VUN be a better choice? VFV has a lower expense ratio, and a higher cumulative return.

    While searching for UK alternatives to the world index (VEA), I chanced upon VEVE/VDEV (Vanguard FTSE Developed world ETF), and this world index also invests in US. Would the purpose of the world index be to invest in all developed markets except US markets, so as to de-centralise your risks from the US market (such as VDU)? So that if your VUN or VFV falls in value, you still have the VDU to mitigate the fall?

    In that aspect, this means the UK equivalent for a world index would not be suitable? As it is also invested in the US index?

    Would there be a difference if you invested in VUSA, against VUSD? Would the difference, being your investment grounded in GBP or USD, make a lot of difference?

    Thank you!
    Andrew Ong

  281. Mario says:

    Hi Andrew,
    I am an Italian living in Malaysia, I would like to open a trading account in Singapore for Index Funds & ETFs.
    I read your book on Global Expats and you suggested DBS Vickers at that time as the best broker. Checking online it seems that Standard Chartered is offering cheaper commissions right now. For an expat that in the future will be moving to other countries and keep on stashing some savings in Singapore, would you still suggest DBS? Any suggestion on what I should look into when picking the broker (as I guess that switching often is not an option)?
    Thanks a lot in advance for your help,

  282. noel says:

    Hi Andrew,

    You recommended VXC for World Index ETF. But based on their website, it is showing 0.48% expense ratio and management fees. Would this be a concern for you? https://www.vanguardcanada.ca/individual/etfs/etfs.htm

    I am Singaporean investor which had bought 2 of your great books.

    Currently, could you find gaps I can potentially fill with my current portfolio of:
    – 50% ES3 (Singapore Stock index, in SGX)
    – 50% VCX (Global Stock index, in TSX)
    – Bonds (in CPF)

  283. Justin Tang says:

    Hi Andrew,

    I know you do not subscribe to market timing; but there is a current anomaly in the financial markets where both bonds and equities are at highs. Traditionally, they trade in opposite directions. What then would you advise someone with a pot of money looking to invest?

    Thank you


  284. Darren says:

    Hi Andrew,

    I am a Singaporean (aged close to 30) looking to start passive investing and read with interest on your above post. I have a query regarding the ES3 Singapore Stock Index and would be most grateful if you could advise pls.

    Understand that the STI ETF started in 2002. When I took a look at the historical share prices, I found that the prices range from SGD10+ to 30+ before 2008 but the price after 2008 is less than SGD5. (Google link: https://www.google.com/finance?cid=436313131969763) Should this be a cause of concern or have i missed out some important information? If we were to constantly invest in the ETF, by the time we were to retire, there would be quite a substantial amt of money invested in the ETF. Wouldn’t the drastic drop in prices result in a large reduction of capital?

    Looking forward to hear your view.