Expat Australian Investors in Singapore Offered More Options

Investment options appear to be getting better for Australians living in Singapore.

You can now build investment portfolios with low cost exchange traded funds (ETFs) while anchoring to your home markets.

International diversification is always important, but it’s also important to have a home country bias. After all, if you’re Australian, and planning to head home at some point, you’ll be paying future bills in Australian dollars.

For that reason, let me propose the following portfolio of exchange traded funds, which you could buy through Standard Chartered Bank’s online brokerage.

Purchase fees are lower than they are for DBS Vickers. 

Standard Chartered charges 0.25% commission on trades. This is especially good for people hoping to invest small, regular sums. Investing just $1000, for instance, would cost a commission of just $2.50 with the currency spread premium costing a further 0.04%.

If you invested $10,000, you would pay $25 in commissions, and a 0.04% currency charge, amounting to an additional $4.  If your portfolio is valued in excess of $200,000, or if you have a minimum $1 million mortgage with Standard Chartered (poor you) you will receive an even lower, preferential rate charging just 0.2% per transaction, with an additional 0.04% currency charge.

Unlike DBS Vickers, Standard Chartered offers direct access to the Australian stock market as well.

Here’s a sample portfolio for a 40 year old Australian:

But there’s a catch!

Brokerages in Singapore now require that you take a multiple-choice test, online, before ensuring that you are qualified to open a brokerage account.  Many of my friends have taken this test, and I’ve seen the questions.  They knew nothing about finance beforehand, but after studying for a couple of hours and retaking the test (when necessary) they have all passed.

Ironically, I’ve been investing in stocks and bonds my entire life (building a million dollar portfolio in the process) but the test questions are…to be charitable, somewhat bizarre.  Without taking an hour to study for the test online, I would certainly fail the test myself—and badly.  The test’s lack of relevancy is mystifying. 

However,  if you want to open an account, you’ll still need to pass this test.

Fill up the Customer Account Review Form. After you have completed the form, you will be directed to take the e-learning portal.

  1. You have to complete the whole e-learning course.  It takes about an hour. Once you have finished the course, you need to PASS the exam. There are 20 questions and the passing grade is 18/20.
  2. When you pass the test, SGX will send your test results to your email. You can attach this test result and send it to Standard Chartered.

 If you fail this silly test (and yes, it is a bit silly) then you can always take it again.





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 (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). 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. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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119 Responses

  1. Liz says:

    Hi Andrew, if this may help for those who want to open an account in DBSV.. they can take the exam as their last option. After they open the account in DBSVickers, there is an online declaration form in DBSVickers that you can just fill up and result is just a few seconds. If you're a graduate of Commerce, Economics, Finance, etc, you can click Yes and you are already qualified to buy ETFs. Another criteria is if you have an existing shares from other brokers or existing SIP, then you can click Yes on the 3rd question and you are then qualified to buy ETFs. If they don't meet any of those 3 criteria, then they must take the exam. I thought I have to take an exam, good thing I tried the declaration form first and met their 3rd criteria.

    • Thank you so much for this Liz! Much appreciated.

      If you don't have any qualifications, but you have traded shares before, I believe you have to tell Standard Chartered what brokerage you used and list your last six trades. Is that what you did Liz, or did you just have to click a single response suggesting that you have traded before?

      This makes it much easier, of course. But for those of you opening your first brokerage account, please be encouraged by the fact that you can still open an account if you follow this testing process first. It should just take an hour or two, at most. Good luck, and remember that you can re-take the test if you don't pass it the first time.

      • Liz says:

        Hi Andrew, when I sign up for DBSV, I did not declare that I have other brokers as my other online broker is still on pending status and it just got approved after a few days. For DBSV, got an approval after 1 month plus. When I logged in, there's a Review Form for SIP under Account Status. My status is not eligible or not yet declared for SIP. I click Yes on the 3rd criteria (that time, we already have shares on our other online broker), then I also choose the option that we will not receive any advise from DBSV. After I click submit, I got an eligible status to buy SIP.

        Btw, I also reviewed CAR and took an exam, but got 16/20. I will retake next time. 🙂 Thank you so much! You book is really amazing. I hope everyone read this and take action for their financial freedom.

  2. Urko says:

    Hey,

    So is everybody moving away from DBSVickers to Standard Chartered?

    I am set up with DBSVickers for more than a year now, and things are going well. I only trade 4 times a year, so about 12 trades per year at most.

    It sounds like quite a hassle, but I guess I should ask: is it worth it to switch? It would mean having an excuse to fly to Singapore 😉

    • Hi Urko,

      I certainly won't be switching. I can buy $40,000 worth of an ETF at DBS Vickers and pay just $30 in commissions. With Standard Chartered, I would pay $80 for the same purchase. But for those investing just $1000 at a time, it makes plenty of sense to switch. For Australians wanting to invest in their own market, it also makes sense.

  3. momo says:

    Hi Andrew,

    I'm afraid you got it wrong this time regarding Standard Chartered. I'm speaking from the point of an investor using SGD to purchase.

    For foreign trading currencies, you have to first convert SGD to the foreign currency (e.g. AUD) (and vice versa when selling the AUD-traded ETF). This alone incurs a significant loss due to the exchange rate offered by Standard Chartered. This results in a hefty effective commission paid.

    Of course, if the amount is small, then the loss due to FX rate is not large, and so the effective commission may still be lower compared to another brokerage house.

    • Thank you for your comment Momo. Are you suggesting that Standard Chartered is offering a "less than competitive" exchange rate, compared to the other brokerages? This is, of course, very possible. Some brokerages even make extra money by taking liberties with the bid/ask spreads on purchases, and some low cost brokerages have been proven to be much higher cost under these circumstances. But do you have proof that SG is offering exchange rate costs above that of DBS Vickers, Citibank, or any other online brokerage in Singapore? If so, how do you know? Thank you for sharing this. Please let us all know so we can confirm whether this is a raw deal.

      Cheers,

      Andrew

      • momo says:

        If you've got SCB internet banking, log in and go to Rates –> Foreign Exchange Rates.

        Take a look at a screenshot here:
        http://i47.tinypic.com/2r228o2.png

        Those are the rates that apply when you convert from SGD to USD/AUD/etc.

        • I'll admit Momo, those are very surprising spreads.

          • sreekanth says:

            Hi Andrew,

            If you buy an ETF traded in the US(the comission is 0.3% of traded prinicpal according to DBS website -http://www.dbsvonline.com/english/index.asp.
            So if you buy 40000 of an US traded ETF, it will cost 40000 x 0.3/100=120 dollars.

            How are you able to get it for 30 dollars?

            Please let us know, so that ppl who buy large amounts like yourself can take advantage.

            Thanks.

          • Not sure why I pay so much less than that. As far as I know, I haven't bribed anyone! A friend of mine recently suggested that he pays more as well. I had just finished buying off the Toronto market (my bonds) so we thought that perhaps, they had raised the rates for their U.S. market. So…I put a mock U.S. order through for just over $21,000 USD. I pasted it below. The commission comes to $26.75 USD.

            Order Details:

            Account: -Cash

            Order To: Buy (Cash)

            Quantity: 300

            Symbol: VTI

            Market: US-N

            Order Type: Market Order

            Order Duration:Good for Today Date:02/09/2012

            All or None

            Costs:

            Total Contract Value: USD 21,663.00

            Commission: USD 25.00

            GST: USD 1.75

            Total Commission and Fees: USD 26.75

            Indicative Total Proceed: USD 21,689.75

          • Jonathan says:

            SCB Singapore foreign exchange rate spread really is incomparable with other brokerages such as DBS. If I will be trading big SGD amounts to buy US Stocks/bonds index ETFs, then i would rather use DBS Vickers. But since i only trade $4,000 a month, the total fees (exchange rate spreads + commission) is still considerably less in SCB SG than DBS Vickers.

  4. Barry says:

    Hi Andrew

    Can expats living/working in Singapore not set up Etrade accounts or similar?

    It has a Singapore office and is registered with MAS

    Or is the tax advantages in Singapore not worth that hassle?

    Barry

    • Expat Americans with U.S. addresses certainly can. And expat Canadians can open something similar, based on Canada. But for Canadians, this could hurt their residency status issue. Plus, there's no capital gains to pay in Singapore for equities. That's worth more than the small savings in commissions.

  5. Colleen says:

    Hi Andrew,

    Great book, I love your philosophy. My husband and I have spent a few years trying to master technical analysis without much luck. While we managed to break even or only come out with small losses annually it was very frustrating and time consuming.

    My husband and I have decided to go indexing all the way. My questions is that we have an IB account and my husband is wondering if we should just move it to a major Canadian Bank rather than keeping it at a discount brokerage not associated with a major bank. The account would be larger than $120,000 so based on the example in the book I think discount brokerage is the way to go.

    Cheers,

    Colleen

  6. Matthias Kauer says:

    Hi Andrew,

    I have looked at DBSV again and I'm wondering about their dividend collection fee mentioned under Products & Services -> Fee Schedule on their page.

    Nominee Services

    Dividend Collection 1% of Net Dividend

    Minimum USD 4, Maximum USD 40

    This probably doesn't affect you a whole lot anymore, but for people just starting out the 4 USD at every dividend collection (the ETFs you suggest distribute quarterly) would eat up a big part of the dividend, no?

    My quick calculation says that in order to make the expense smaller than 1% of the net dividend, you need to invest:

    12 USD fee * 100 = 1200 USD dividend at 3% yield => 1200 * 100 / 3 = 40k USD

    I'll call them soon to find out how it works exactly.

    • Dissect any local bank brokerage, Matthias, and you'll find much the same thing. The banks will always try to squeeze us for something. The question is, what can we do about it? It's a frustrating reality of the financial system, especially in Singapore, where I find costs are very high, compared to North America. But….these options at Citibank, DBSV and Standard Chartered are likely the best options we have over here. I don't like it either. So I have to consult my inner Buddha. When you call the bank, they probably won't even know what you're talking about. You, my friend, now know more about their products than most of them do!

  7. Jonathan, I wonder if you could transfer U.S. dollars from a DBS account to an E-Trade account (where U.S. market trades are just $9.99) Then you get a lower commission and possibly a better exchange rate. I was recently speaking to an E-Trade rep here in Singapore who presented that as an option to those who aren't happy with Standard Chartered huge currency spreads.

  8. Rob Madrid says:

    A best selling author, blogger and to boot not living in Canada (or the US), Wow never thought I'd ever see that combination!!!

    As a fellow expat I face a lot of similar issues, but two questions jump to mind. (got loads more but will save them for another time)

    1. What currency do you invest in

    2. How do you avoid with holding taxes.

    A few years ago I actually changed all my DRIP stocks and my bank account addresses back to Canada. The 25% withholding tax is a killer, sure I pay no capital gains tax is great but I'm a long term buy and hold investor so that's really not an issue.

    The main problem I'm facing now is that my account has reached the size where I need to think about filing Canadian taxes, but since I have very little income I expect to come out ahead.

    Rob

    • Hi Rob,

      Most expat Canadians keep their money out of Canada to avoid jeopardizing residency status. I have not had to file Canadian taxes for a decade. As for withholding tax, there's no way to avoid it as an expat. As for currency, it's not much of an issue. If you are buying an international index on the New York Stock Exchange, you would be settling in U.S. dollars (and will likely pay a spread there) but after you settle, your index rides in accordance with the international markets. It's still quoted in U.S. dollars, but it isn't really in U.S. dollars, or the U.S. market.

      • Rob Madrid says:

        good or bad when we left 12 years ago we both filed for non resident status and for years it didn't really matter, we keep our bank account DRIP stocks and credit card (non Canadian address was no problem)

        It wasn't till I started building up my investment account that I began to rethink it the whole thing, so few years ago I begin to rethink the whole thing. So a few years ago I changed everything back to my parents address.

        Since all of my investments are dividend stocks (think banks and BCE) the withholding tax was a killer, and since you can earn u pto $75,000 minimal tax I see no reason to ever switch.

        This year I have to look into filing a tax return (me only not my wife) as my income is starting to creep. The real problem will be trying to figure out taxes from my end (Spain) that will be a pain.

  9. Raymond says:

    Hi Andrew,

    As a young graduate in Singapore who have just started working, I adopted your method of index investing and am doing monthly investment of about USD$450 via SCB platform.

    May I know based on your experience, will my returns suffer due to unfavorable currency fluctuations? Are there methods to hedge against this?

    Thank you.

    • I believe that's $9.99 per trade if the account value is above $50K, not if the trade itself is above $50K

    • Hi Raymond,

      Any method you use to hedge currency fluctuations will cost you money. Even some ETFs attempt this. In Canada, for instance, there are hedged and non hedged S&P 500 index ETFs. Those that are hedged somewhat to the Canadian dollar typically underperform by roughly 1% per year, on a long term basis. That's a lot, over an investment lifetime. If your portfolio is diversified enough, with a home country bias, you shouldn't have to worry about currency fluctuations.

  10. Buying ETFs with your account would likely be your cheapest option Colleen. I have a silly question though. What's an IB account?

    Many thanks for the kind words about the book. Let me know if you have other questions

    Andrew

    • Colleen says:

      Hi Andrew,

      Thanks for the reply.

      IB stands for Interactive Brokers (one of the popular and proably the cheapest of the discount brokerages). My husband is just worried since it isn't backed by a major Canadian bank that it may not be as safe. Please advise fi you think we need to make a change.

      By the way I originally happened upon your site when an article of yours showed up on MSN.ca about the value (or lack thereof) of an Ivy league University degree. The rest of your articles are great stuff and prompted me to pick up the book.

      Cheers,

      Colleen

      • Hi Colleen,

        I think brokerages like QTrade are just as safe as those at the big Canadian banks. In essence, you're buying the same products, if you're building ETF portfolios. The brokerage just gives you the platform to buy them.

      • Hey Colleen,

        Brokerages like RBC Action Direct and TD Waterhouse charge just $9.99 per trade. The low commission may still be dependent on account size. But of course, they're "big bank" brokerages. Perhaps your husband might feel more comfortable with them.

  11. Sam Devine says:

    Hey Mr. Hallam,

    I was wondering, how would this type of investing be any different then investing the same way in America? Or in Europe or anywhere else around the world? It just seems like this is somewhat the same as what we discussed for investing in the US or Canada. Also what were some of the odd questions the test asked?

    Thanks,

    Sam Devine

    (Going for the 10/10)

    • Hey Sam,

      You're right. This is very much like the methods of investing that we talked about in class. But here's the difference. In 1976, a super cool guy by the name of John Bogle founded an investment company called Vanguard. It's a lot like SAS in many ways. No outside person profits from it. Only the investors make profits. Americans can use Vanguard to invest, and they don't have to pay any commissions, ever! It's also incredibly easy. You can simply (if you want) buy funds called "Target retirement funds" which I mention in my book on page 107. Vanguard essentially rebalances a basket of index funds (with bonds) much like the couch potato concept that we studied in class. For your mom, this would be a very easy way for her to invest her retirement money. And for you, it would also be a great way to start building wealth. You need just $1000 to get it started, and after that, you could deposit as much or as little as you want (with a $50 deposit minimum). You would likely buy the Vanguard Target retirement 2040 fund and your mom could buy the Target Retirement 2015 Fund. They don't expire on the year mentioned. Your mom, for example, could hold the 2015 fund for years (It has about 45% in bonds). The 2040 fund has about 12% in bonds. As you age, the bond portions automatically adjust upward. These products are great. They allow you to ignore your investments, get on with the more important things in life, and they rebalance low cost indexes automatically, without you raising a finger.

  12. RJ says:

    Hi Andrew, I'd like to ask, do you have any recommended broker in New Zealand? We plan to migrate in NZ, is it still practical to buy ETFs here in Singapore? We just opened our DBS Vickers account, and we're thinking if you should start buying or not at all, and do it in NZ. Any advise from you will be greatly appreciated. Thank you so much! We love your book!

    • Hi RJ,

      I don't have a brokerage recommendation for New Zealand, but I'm sure you can find one. If you'll soon be leaving Singapore, not planning to come back, you should probably opt for the NZ brokerage.

      When you find a brokerage with decent market access and reasonably low costs, can you let me know? Others will benefit from that.

      Thanks RJ,

      Andrew

      • RJ says:

        Thanks Andrew! We did find top online brokers. ASBSecurities and Directbroking. I think we will go with directbroking as they have NZ and AU securities and under AU, we can buy US, international, sg index/ETFs. As for asbsecurities, they only have NZ.

  13. Terry says:

    Hi Andrew

    Attended your presentation and have read your book. Thanks. Have money in our DBS Vickers ready to invest. I am a 48 year old Australian who will return to Australia in the next few years but am now confused as to what to invest in????

    Can you you give me some direction.

    • Hi Terry,

      I think the SG option may be slightly better for Australians. But for the sake of convenience, if you already have an account open with DBS Vickers, keep in mind that the decision between the two isn't huge.

  14. Davo says:

    Hi Andrew, having a Standard Chartered cheque &investment accounts I did the Standard Chartered online application 2 months ago. I have now submitted the application twice. First time, I was knocked back because I used my FIN number and not my passport number. You must use the one they have on record. (It's a pity they don't request both, or even mention that the original is required in the application — it would save a lot of wasted time. ) Needless to say, they said that they couldn't change from my NRIC to passport number over the phone and that I had to resubmit the whole application. I logged into my account and went through the rigmarole again.

    This time, almost another 4 weeks later, I had still heard no word from them. I called again and was told again that I'd been knocked back — this time because I'm Australian citizen residing in Singapore and it's Australian tax law that Australian citizen's residing outside of Australia cannot trade in the Australian market.

    In the application I had said I wanted to trade in the AU ie my home market as suggested above in your post.

    Should I re-submit again (third time lucky:) to only trade in the SG market?

  15. Davo says:

    Hi Andrew, Well, well, surprise, surprise!

    I received a letter from SCB yesterday saying that my application had been accepted (without resubmitting for a 3rd time or doing the test)!

    Contrary to the advice I'd received around two weeks ago, I now have $AU and $SG trading accounts.

    (If you're wondering how I avoided the test, I was able to list my past trading experience.)

    So taking into consideration the S&C advice about about tax implications for Australian citizens residing offshore, and want to use SG dollars — what would you do if you were a 50 yo Australian living in SG?

  16. BB988 says:

    Hi Andrew,

    I was glad to have stumbled upon your blog. Very helpul and informative. I am an Australian citizen in my 30's living in Singapore. I have no investment portfolio as such – just some cash savings.

    Just wondering if you'd kindly share some advice. Something like the Vanguard fund, which you'd mentioned in a comment above, sounds just like what I need – a couch potato investment strategy which i can ignore, and just get on with life. Is there something like that which you can suggest in Singapore? Perhaps something AUD based?

    Also, I have recently opened a bank account with SCB in Singapore, and they tell me that it'd be next to impossible for me to get a credit card at SCB as an Australian citizen in Singapore – some new compliance issue? Do you know anything about this? Any other Australians here had similar issues with SCB or any other bank?

  17. Andrew says:

    I'm an Australian expat living in Vietnam and I'm looking for ways to invest in index funds.

    I contacted Vanguard in Australia. This was their response to me:

    Vanguard Investments Australia Ltd and its Funds are registered in Australia and are operated to comply with Australian laws.

    We regret to inform you that unfortunately Vanguard Australia can no longer accept applications from non-Australian residents which includes Australian citizens currently residing overseas.

    This policy is as a result of the US Foreign Account Tax Compliance Act (FATCA) and similar expected legislative changes in Canada, Europe and elsewhere which increases our compliance burden from accepting non-residents.

    So it looks like that option is not available if you are a non-resident for tax purposes.

  18. Ben says:

    Hi Andrew. Thanks for the info for Australian investors. I've been looking into this account with Standard Chartered and have some information that may be updated since this post was made.

    Firstly, the link above to the account isn't correct. Here's one that's working now http://www.standardchartered.com.sg/personal-bank

    Secondly, it seems that with Singapore's restrictions on beginner investors combined with the system that Standard Chartered use for their trading (they do it all in-house rather than going through the central trades organisation in Singapore), beginner investors cannot take advantage of this account. In order to open the account, you must have either studied something investment related (eg, commerce, accounting, etc), worked for an investment firm or made at least 6 trades in the last 3 years. Also, Standard Chartered will not accept a pass on the SGX test that you mentioned as enough to prove that you are ready to trade.

    So, newbies to investing cannot proceed with Standard Chartered (unless, as one of the bank workers suggested to me, you lie about your previous trading experience).

    If anyone other beginner Aussie investors in Singapore hear anything to the contrary or have success opening the account with Standard Chartered, please post a reply.

  19. David says:

    I'm also considering opening a Standard Chartered or DBS Vickers account.

    Are there any workarounds for a new investor to pass the CAR?

    • Ben says:

      Hi again. One of the CAR requirements can be to have had past trading experience (6 trades in the last 3 years), so my (long!) workaround will be to open a trading account with another broker (either DBSVickers or Citibank) to do some initial trades. Once these are done, I should then be able to go to SC and open an account with them.

      Sigh!

      • That quiz is required by all the local brokerages now, I believe. It certainly is required to open an account with DBS Vickers. It's not difficult to pass, however, if you study the material. Oddly, the material isn't even related to what you'll be doing when building a portfolio of ETFs. Yeah, it's ironic.

        • David says:

          An update on this one. I was able to open a DBS Vickers account as a beginner (no trading experience) without completing the quiz. Perhaps they’ve dropped this requirement.

          Anyway, I’ll start my trading with DBS Vickers. Not sure if its worth changing to S&C later due to the AUD account.

          The AUD has just gone through the floor and looks like it will continue downward (and probably stay there for some time), so might not be such an issue.

  20. Mandanna Daemi says:

    Hi Andrew,

    I teach at UWCSEA and it was fantastic to have the opportunity to hear you speak at our school the other night. I'm also reading your book which has been very educational on the matter of investing.

    I'm in the process of following your advice and investing in ETF's. I'm an Australian expat and was just wondering if you still recommend the 5 ETF's you have highlighted above as I'm keen to use whatever portfolio structure that you advise. The portfolio you recommended was:

    Here’s a sample portfolio for a 40 year old Australian:

    40% Australian composite bond index

    20% Australian stock index

    15% First world international index

    20% U.S. S&P 500 index

    5% Emerging market index

    Do you still endorse these ETF's? Any advice you could give me would be greatly appreciated! Thanks again for coming to speak to us at UWC – I came away feeling very inspired and motivated!

    All the best,

    Mandanna

  21. David says:

    Hi Andrew,

    You have two posts for Australian Expat investors recommending two sample portfolios, one for DBS Vickers and one for Standard Chartered.

    For Australian equities you recommend IOZ for Standard Chartered and EWA for DBS Vickers, which makes sense as IOZ is not available on the US market.

    However for bonds you recommend IAF for Standard Chartered and ISHG for DBS Vickers. Both are available on the US Market through DBS Vickers.

    For World Indexes you recommend IVE and IEMG for Standard Chartered and VT for DBS Vickers, all of which are available on the US Market.

    Do you have any particular reasoning why ISHG and VT are more suitable for Australian investors using DBS Vickers than IAF, IVE and IEMG?

    Thanks
    David

    • Hi David,

      Compare the expense ratios and go with the lowest cost options available through the brokerage you choose, as long as you are dealing with apples and apples. Keep in mind that IAF is not a bond index; it’s an equity index. IVE is a S&P 500 index, not a world index. A S&P 500 index tracks the U.S. market, but not a global one. IEMG is an emerging market index.

      VT combines the elements of IEMG, IVE, and VEA.

      Regardless of what you choose (there are many many options) be sure to own the world at the lowest possible cost. Once you’ve done that, your behaviour will determine how you perform over time, not the specific ETFs chosen. If you have discipline, you will do well. If you’re like most people, you won’t.

      Cheers,

      Andrew

  22. David says:

    Thanks Andrew, makes sense.

    Just for clarity though, IAF is a composite bond index. You might be mixing it up with IOZ?

    Also you’re correct that IVE is an S&P 500 index along with IVV. That did confuse me as well because in the same it’s labelled as “First World International Index”.

    These are the funds from the sample above. Regardless, the general advice makes sense, thanks for that.

    40% Australian composite bond index IAF
    20% Australian stock index IOZ
    15% First world international index IVE
    20% U.S. S&P 500 index IVV
    5% Emerging market index IEM

  23. Anze says:

    Hi Andrew,

    I am a fellow Canadian and have been based in Australia for the last 6 years. My partner is Singaporean and we are looking to move to SG for the next 4-5 years. Outside of my superannuation, all of our assets are in a AUD cash position. I’ve been meaning to setup a balanced ETF portfolio for some time. The question is do I do it in Australia or do I move my cash up to Singapore. My main concern is currency rates, is it possible to move the money and keep everything in AUD?

    Best,
    Anze

    • Hi Anze,

      If you do end up keeping everything in Australian dollars, you won’t be able to build a diversified portfolio. For example, if you bought a Canadian stock market ETF (whether in Singapore or Australia) you would be purchasing a product that reflected the Canadian market and currency. Buying an international stock ETF (whether in Australia or elsewhere) would mean that you are “selling” Aussie dollars to buy a global basket of stock markets and currencies.

      You could transfer your Aussie dollars to a brokerage like Standard Chartered, giving you access to the Aussie market, while allowing you to keep your money in AUD, until you actually buy something global.

      Cheers,
      Andrew

  24. Brett says:

    Hi Andrew,

    There’s some very good advice here.

    I have been buying stocks through an Australian broker but as a non-resident of Australia, I lose the ability to claim back taxes that the company has already paid known as tax credits or franking credits.

    Would buying these stocks through SG alleviate that problem?

  25. Brett says:

    I would think I’d still need to declare any capital gains I make and would need to pay taxes on that in Japan, wouldn’t I?

    • You would know Japan’s specific capital gains laws better than me Brett. However, if I’m working in France (for example) keep my investments in Singapore, and I’m a Canadian, then I won’t pay capital gains taxes to anyone on the profits made via my Singapore brokerage. I do wonder about Japan, because I have heard that it’s one of the few country’s where expat residents (despite being from another country) can’t open accounts with TD International, in Luxembourg. That said, those making the trip to Singapore have been able to do so with DBS Vickers, as threads on this blog suggest. Those investors haven’t had to pay capital gains taxes on their Singapore based portfolios. Is it tax evasion, according to Japanese law? I don’t know.

  26. Brett says:

    Thanks Andrew,

    It all depends on your ‘residency status’. Once you have lived in Japan over 5 years, you are automatically considered a resident of Japan regardless of the status stamped in your passport. Once you pass the 5 year mark, you are bound to declare all earnings from abroad. I’m of that unfortunate title so I feel I can’t legally avoid paying capital gains, so I will need to declare them at tax time.

    Taxes paid aboard are recognised in Japan as there are tax treaties among most of the affluent countries. So I think there’s not a lot for ‘permanent residents of Japan’ to gain from having a SG account. Those under the 5 years have nothing to lose though.

    Japan needs to raise their tax revenues and they don’t mind fishing among tadpoles to get their fill.

    Maybe some other long term residents in Japan can comment. If my understanding is wrong, I’d like to be corrected.

  27. Brett says:

    Thanks for your prompt replies Andrew.
    I currently have a US trading account with Charles Schwab and one in Australia too.
    I’ll look into the SG Saxo as you suggested as I think they offer better rates of exchange than what I can get in Japan.

    You’re right, there’s not a lot on offer for those of us in Japan. We’re pretty much limited to the Generali like bond products. I have been tempted, especially as the money can be repatriated back to Australia after 10 years of starting the bond without having to pay any capital gain taxes if I’m living there.

    Still it’s hard to justify the quarterly fees and commissions that are built into the products especially considering these costs will always be there even during the slow and negative market periods. If I could etch out a gain over 10% consistently year on year, it would make sense however I don’t have that confidence so feel sticking to pay taxes on gains is a more cost effective and flexible approach.

    • If you can legally evade taxes on those offshore pensions, you can do the same with a Singapore based account. There’s no difference, when it comes to tax. Each is based in a capital gains free zone.

  28. brett says:

    Hi Andrew,

    Just to follow up, I wasn’t able to open an account with Saxo in SG without a SG address. Thanks for suggesting it though.

    • Brett,

      You can do it with a notary note of identification, either using the Singapore branch or another. I don’t like it when telephone personnel don’t give accurate info. Keep pressing; you can absolutely do this.

  29. George says:

    HI, Andrew;

    How are you! I hope you are well.

    It is interested to see your Q/A on this web. I am not sure whether you could guide me on my case.

    I am Australian and wish open an account with stock broker. In the future, I would trade my long term portfolio through them. I am mainly trading stocks, futures in USA and Singapore market.

    Do you know which stockbroker offers the service to Australian?

    Have a great day!
    Cheers!
    George

  30. Shiqi says:

    Hi Andrew,

    I am a 25 year old Singaporean who is hoping to start my own investment portfolio through investing in ETFs. I am planning to do this choosing ETFs with a geographical or sector-specific focus (E.g. LATAM, or healthcare). However, I have been finding it difficult to obtain information on how to invest in such globally indexed ETFs in Singapore. Trying to find out which brokerage account would give me the widest range of ETFs alone has been difficult even without deciding to invest yet. So far, I have only managed to find one site by OCBC securities which is able to list out all the ETFs they offer. How should I go about doing this, and where do you suggest I begin?

    Also, would I need to pay any capital gains tax if let’s say I purchase ETFs listed on US stock exchanges?

    Would deeply appreciate your guidance on this. Sorry for so many questions cramped in 1 tiny box!

  31. Brett Evans says:

    Hi Brett,

    generally speaking when a Australian listed company pays a dividend if you are a resident of a country that has a Double Taxation Agreement with Australia (like Japan) then the share registry will deduct 15% Withholding tax from the dividend and pay you the remaining amount. If the company is also passing through franking credits with the dividend then the franking credit (which carries a 30% tax credit) will take care of the 15% withholding tax however you do lose the remaining 15% of the franking credit.

    Hope this helps

  32. Iggi says:

    Hi Andrew,

    Can you recommend cost effective Singapore brokers that offer access to ASX? Buying ASX stocks and holding long term. Thank you.

  33. Jarrad Brown says:

    We are thrilled to be partnering with Andrew to host a book launch for his new book on Wednesday 21st January. It will be a great opportunity for Australian and other expats to attend.

    Find out more and register here

  34. Martin says:

    Between DBS Vickers & Standard Chartered, which would you recommend for an Australian long-term resident in Singapore, with no near-term plans to return to Australia? I have both available to me. Thanks

    • Martin,

      As I mentioned in my book, The Global Expatriate’s Guide To Investing, you should ensure that you buy non-U.S. domiciled ETFs. If Standard Chartered gives you access to the Aussie market, go for it. Currency spreads will be higher than with DBS. But DBS won’t allow you access to non-U.S. domiciled funds, with an exception being those trading on the Toronto stock exchange. I think my book will help you a lot. Here’s the link: http://bit.ly/globalexpat

      • Martin says:

        Yep, have the book. It is excellent.

        OK, so after some consideration I’m planning for the following:

        35% bonds (15% global/USD, 15% Australia/AUD, 5% Singapore/SGD)
        40% world equity (USD)
        15% Australian equity (AUD)
        10% Singapore equity (SGD)

        That would give the following currency exposure:

        SGD: 20%
        AUD: 30%
        USD: 50%

        I do not wish for either an Australian or U.S. tax liability, either dividend/withholding or death. I can use either DBSV or SC.

        Where I’m still a bit confused is the specific funds I want. I think I want the following but would appreciate feedback:

        USD bond: IAF, ISHG or SHY
        AUD bond: VGB
        SGD bond: A35
        USD equity: VT
        AUD equity: IOZ, VAS or EWA
        SGD equity: ES3

        Should I be aiming to do this all through one bank/broker, or cherrypick across the two? And are my assumptions above even valid – e.g. can I buy Vanguard from here (e.g. via SC) yet not have a tax liability? How do I even know where something is ‘domiciled’?

        Appreciate the feedback.

        • Martin,

          In my expat book, I have a chapter for Australians. Some of the ETFs you mentioned here are U.S. domiciled. They are not the ETFs I mentioned in my book. Please look at the global stock indexes mentioned in chapter 18 of the Global Expatriates Guide To Investing.

          • Martin says:

            Thanks Andrew. So if I read you correctly I should be looking at:

            SGD bond: A35 (SGX/SGD)
            SGD equity: ES3 (SGX/SGD)
            AUD bond: VGB (ASX/AUD)
            AUD equity: VAS (ASX/AUD)
            USD equity: VTS (ASX/AUD)
            World equity: VEU (ASX/AUD)

            As these are mostly ASX-listed, there’s 30% withholding tax on dividend but no capital gains tax (for non-residents), right?

            Thanks again.

          • Martin,

            These are great. Also, consider looking at the Horizon ETF for your U.S. equity component, trading on the Canadian market. With it, you won’t have to pay any withholding tax (see my expat book on those products). Or, to broadly reduce with holding taxes, you could buy a global stock index off the Canadian exchange and pay just 15% dividend taxes, no capital gains taxes. Check this one out: https://www.vanguardcanada.ca/individual/mvc/detail/etf/overview?portId=9548&assetCode=EQUITY##overview

          • Martin says:

            I got an email notification from this forum with some useful suggestions from you, though I don’t see the actual post appearing here somehow (weird). In it, and with the goal of reducing dividend tax exposure (vs. ASX) in mind, you suggested doing something via the TSX (which is a great idea & something I myself would not have come up with). Thanks.

            I also note that Vanguard now has a S&P 500 ETF on the HKSX – unless I’m missing something, this would be the best of all options (for US market exposure specifically), right?

            For broader world exposure, if you had a choice between lower TER (VEU.AX at 0.15% but 30% on the dividend) or lower witholding tax (VXC.TX at 0.15% but with 0.25% TER), which would you take? Also, I note that VXC incl. a range of developing markets, which is arguable less desirable than their Mature Europe fund (also on TSX)?

            Thanks once again, learning lots here (and a great drill-down beyond the book, which I have now passed to my wife and encourage everyone to buy/read).

          • Hi Martin,

            If you’re looking for pure U.S. exposure, with no dividend taxes to pay, you could consider Horizon’s swap based S&P 500 ETF, which trades on the Toronto exchange.

            With it, you won’t have to pay dividend taxes.

            Either way, we are splitting hairs with all of these very good options. Odds are that your behaviour will have a much greater impact on your investment returns than whether you choose one low cost ETF over another. As I mentioned in my latest book, ETF costs also drop all the time. Today’s cheap fund will be usurped by another tomorrow. Just make your decision. And stick to it. Rebalance your portfolio with fresh purchases or at the end of the year. And hope that the markets drop, so you can add to your portfolio at excellent prices. These are, by far, the most important aspects of investing. Chasing the ever-changing expense ratios of ETFs is a bad idea. The options you listed are all excellent. But you can bet that their TERs will be different next year. Fortunately, they are likely to be even lower.

            Cheers,
            Andrew

  35. Jeff says:

    Hi,

    I am a 40 year old Canadian living in China for almost 10 years and I recently bought your book about Expat Investment. I feel damned that I didn’t read you book much earlier, it would’ve been a great way to invest my savings. On the flip side, I didn’t fall prey to all those schemes expats are often faced in China. Today, I have a bit of liquidity and I am looking to start investing on ETFs in order to retire in 15-20 years.

    Coincidently, I recently opened an account with Interactive Brokers in HK (https://www.interactivebrokers.com.hk/). I was thinking of investing on ETFs following your advices (Bonds + Canadian ETFs + World ETFs) but you don’t really seem enthusiastic about Interactive Brokers.

    Do you think I should like at DBS Vickers instead or is it safe (tax wise) to go with IB?

    Cheers
    Jeff

    • Hi Jeff,

      You would probably be fine with IB. The risk would be extremely low that your heir would get hit with U.S. estate taxes. But low doesn’t mean zero, so it’s up to you.

      Cheers,
      Andrew

      • Jeff says:

        Hi Andrew,

        Thanks for your reply ! I also have an option to open a DBS Vickers through my wife (she’s Singaporean) – would you recommend this as a better option ? The account would be under my wife’s name. Since she’s Singaporean, would there be any advantage or disadvantage ?

        Thanks
        Jeff

  36. Jeff,

    Whether the account is in your name, or your wife’s there is no advantage. In each case, capital gains taxes won’t have to be paid. Check out the Horizon ETFs that I mentioned in the Canadian section of my expat book. With these ETFs, you won’t have to pay capital gains taxes, nor will you have to pay dividend withholding taxes.

  37. Jeff says:

    Hi Andrew,

    Thanks – I’ll stick to IB then ! I checked out Horizons and it looks great. I was thinking of doing a split 40% HBB (since I am 40), 30% HXS and 30% HXT. What do you think ?

    I noticed there is a USD component (HXS.U/HXT.U), since my cash position is USD and I’ll deposit more USD in the coming months, does it make sense to get the USD version of HXS/HXT or it doesn’t really matter?

    Thanks
    Jeff

    • Hi Jeff,

      This portfolio looks great. If you can stick to the Canadian version of HXS, you might as well. Otherwise, you will have to convert your currency twice. Once when buying, into USD dollars and again when selling, from USD to CDN.

      If you just convert when buying (from whatever currency you earn to CDN) you don’t have to convert into CDN when you sell. This assumes, of course, that you are Canadian and you want your cash proceeds to eventually be in CDN.

      Cheers,
      Andrew

  38. Joe says:

    Hi Andrew,
    i am 20 years old and already have some money invested.With my career as a police officer lined up, i look to be in this for the long term. i have read your millionaire teacher book and have taken so much out of it. I want to get involved with index funds. I was just curious as to your opinion of what a good fund to start out with would be

    • Hi Joe,

      I listed products for Australians, Singaporeans, Americans and Canadians in my book, Millionaire Teacher. I don’t know your nationality, but if you fall within one of those nationalities, I have listed some very good, specific index funds that you can buy.If you don’t fall within one of those nationalities, please let me know.

      Cheers,
      Andrew

  39. David Benton says:

    Hi Andrew,

    I am looking for some case studies of earnings, or projected earnings, of a portfolio using something like a 70/30 index/bonds spread. I want to use this to convince any doubters!

    Do you know of anything that could be of use?

    Cheers!

  40. Adrian says:

    Hello Andrew,
    just read your book Expat Investing. A key message is to pick one of the 3 primary portfolio philosophies, couch potato, permanent, fundamental twist AND STICK WITH IT. As you say most of us are not ninjas. We have to fight against that feeling of regret and risk succumbing to the pressure of selling or buying those trending up. Would it not to reasonable to split your revenue into 3, or even just 2 of the portfolios? If one tracks down the other is tracking up and we are feeling pretty good overall and mitigate the feeling of regrets. It should not cost more if charges are based on percentages? I would appreciate you comment on this variation on you advice. Cheers and thanks for your book. Adrian

  41. Adrian says:

    Hello Andrew, just read your book Expat Investing. A key message is to pick one of the 3 primary portfolio philosophies, couch potato, permanent, fundamental twist AND STICK WITH IT. As you say most of us are not ninjas. We have to fight against that feeling of regret and risk succumbing to the pressure of selling or buying those trending up. Would it not to reasonable to split your revenue into 3, or even just 2 of the portfolios? If one tracks down the other is tracking up and we are feeling pretty good overall and mitigate the feeling of regrets. It should not cost more if charges are based on percentages? I would appreciate you comment on this variation on you advice. Cheers and thanks for your book. Adrian

  42. Adrian says:

    Hello Andrew, after reading many posts here is do not see any comments or suggestion of people investing in a permanent portfolio! I wonder why? Can you care to comment Andrew?

      • Adrian says:

        Thanks for the link Andrew. Indeed I missed that thread. Good discussion points. I too picked up on the hedged gold EFT in the Australian Portfolio. I liked the last comment by Steve November 11, 2015 at 9:54 pm on Saxo vs TDDII – both on my short list.

        After the book, reading your blogs, some other research I am close to opening two accounts (Brokers do bankrupt) and running a PP and Couch Potato Portoflio. I am considering ying and yang within and between the portfolios. Based on average life spans I have about 2 decades left. Thanks for sharing your insight.

  43. John says:

    Hey,

    I am an Australian living in Malaysia. I have recently contacted TD and DBS about opening an account. Both can open an account for an Australian living in Malaysia, but can not open or maintain an account for an Australian Resident. One of them informed me that they would be required to close the account (and sell/transfer my EFTs) if I were to become an Australian Resident again.

    Although I do not intend to return to Australia anytime soon I will one day, or may be required to due to unforeseen circumstances.

    Do you know of any brokers in capital gains tax free nations that accept Australian Residents? (IB do but I am concerned about estate tax).

    John

    • Hi John,

      No brokerage should allow an Australian resident to evade taxes in a capital gains free jurisdiction.

      Cheers,
      Andrew

    • Brett Evans says:

      Hi John,

      you can easily do this through an Australian brokerage account, the only difference between being a resident and a non-resident is the withholding tax considerations which you can manage using franking credits.

      Cheers,

      Brett

  44. Matthew M says:

    Hi Andrew,

    I’ve bought your book and read it cover-to-cover. I’m an Australian in Singapore currently putting together a Permanent Portfolio based on your teachings, but I’ve stumbled across a question I can’t answer:

    How can I purchase shares in the (1) Vanguard Australian Government Bond Index, (2) Vanguard Australian Shares Index, (3) Vanguard U.S. Total Stock Index, and/or (4) Vanguard All-World (ex U.S.) Stock Index, when the Vanguard website tells me: “Important Legal Notice – Offer not to persons outside Australia”?

    The Vanguard site seems to make it very clear that non-residents for tax purposes cannot purchase their ETFs, yet this is a fundamental component of your books advice on the Permanent Portfolio? What am I missing here?

    Regards,

    Matt

    • Hi Matthew,

      In my book, I didn’t say that Australian expats could use Vanguard Australia. Instead, you will have to follow the chapter for Australians and buy the ETFs that are suitable, from the brokers I listed. You might have read my book, Millionaire Teacher. I wrote this second book for expats. Details, of what you should be doing as an Australian expat, are very clear in this second book. http://bit.ly/globalexpat

      Cheers,
      Andrew

      • Matthew M says:

        Dear Andrew,

        Apologies, I wasn’t clear enough in my level of misunderstanding.

        In Chapter 18 of The Global Expatriate’s Guide (“Investing for Australian Expats”), the tables recommend Aussie Expats allocate assets with ETFs like the “Vanguard Australian Government Bond Index” and “Vanguard Australian Shares Index” amongst others (Tables 18.1 to 18.5). Aren’t these Vanguard products?

        I’m unclear on how a brokerage lets me invest in the products you have recommended in Chapter 18 when I’m not a resident for tax purposes and unable to purchase things like Vanguard products directly. How does an overseas broker let me do this when I can’t purchase the ETFs directly from Vanguard?

        Also, does Standard Chartered’s online brokerage services (recommended here http://andrewhallam.com/2012/09/expat-australian-investors-in-singapore-offered-more-options/) give me access to them?

        Again, sorry for the questions, I’m just trying to understand how this all works.

        Regards,

        Matthew

        • Yes Matthew,

          Standard Chartered’s online brokerage allows access to the Australian exchange. You can buy those exchange traded funds through them, online.

          Cheers,
          Andrew

    • Brett Evans says:

      Hi Matthew,

      the reason this disclaimer is there is Vanguard hasn’t registered the Product Disclosure Statement (PDS) in any other jurisdiction apart from Australia. As you could imagine if they did this in every jurisdiction the cost would be out of control.

      As an example Vanguard can’t be see to be promoting these to you in Singapore otherwise they’d have to register the PDS with MAS (Monetary Authority of Singapore).

      If you look at every financial services product in Australia now they all have the same disclaimer.

      Hope this helps,

      Brett

  45. Jessie J says:

    Hi Andrew,

    Just bought your book with my husband, and it’s been fantastic couples reading – however, we need you to clarify something for us. What is the difference between having our portfolio split like this:

    PORTFOLIO #1 – Couch Potato (4 ETF Split)
    35% Australian Stocks ETF
    30% Australian Bonds ETF
    17.5% US Stocks ETF
    17.5% International Markets Ex-US ETF

    And having it split like this:

    PORTFOLIO #2 (3 ETF Split)
    35% Australian Stocks ETF
    30% Australian Bonds ETF
    35% iShares (US Stocks + International Markets (All World)) ETF

    My hubby says #1 works better for capitalising on lower prices when rebalancing between two separate ETFs (ie. if the US dollar outperforms the All World Ex-US) but don’t global ETFs like iShares automatically do this? What’s the benefit of having our “international” split between two ETFs (US & All world Ex-US) over just one (US + All World)? What inside knowledge can you share so I can wallop him at the dinner table?

    • Hi Jessie,

      Nobody gets to wallop anyone else 🙂
      if you own the ETFs separately, you can rebalance the individual components of the different market ETFs. If you, instead, own the global market index, you can’t do such rebalancing.
      The global index is cap-weighted. As such, its components aren’t rebalanced. The weighting of the markets, within it, are based on how each respective market grows. Sometimes, such an index will beat the isolated (rebalanced versions) and sometimes it won’t. You’ll never know when one will outperform the other. That’s why each is as valid as the next. Do you want to see an example of what I’m talking about? Check out portfoliovisualizer.com. Track a portfolio with VT (it started in 2008) versus a portfolio comprised evenly of a U.S. and International stock index (2 indexes instead of one). If rebalanced, since 2008, you will see that VT would have beaten the isolated ETFs if the isolated ETFs were rebalanced. But if the isolated ETFs were not rebalanced, they would perform about as well as VT.

      That said, there are other time periods when rebalancing the isolated components would win. If the isolated components differ in performance by less than 4% per year, over a given period, then rebalancing will win. In other words, having isolated ETFs would win. But if those markets are further, in performance, than 4% per year over a designated time period, the global index, which weights based on global capitalization, would win.

      So it’s a draw. What should you pick? Flip a coin. Nobody has the answer. Either way, it will be close over your lifetime. That’s the time frame you should be most interested in.

  46. Andrew Also says:

    Hello Andrew,

    You made a comment above that alarms me:
    “Some brokerages even make extra money by taking liberties with the bid/ask spreads on purchase”
    I’m horrified. I’m no lawyer but, ethically, that’s plain, straight out fraud. Who would do such a thing?

    PS: Enjoyed your book “The Global Expatriate’s Guide To Investing” – good practical advice. I just wish I’d seen it earlier…

    • Andrew,

      That isn’t fraud. That’s how the banking system works. Every bank will take its cut, beyond the spot rate, when converting a currency. How much they take is determined by each respective bank. Some banks/brokerages take more than others, just like some stores will charge you more (or less) for a bag of carrots.

  47. David in Vietnam says:

    Hi Andrew,

    I am about to invest for the first time in my newly created Saxo Trader account, and so was hoping to use the suggested portfolio:
    Here’s a sample portfolio for a 40 year old Australian:

    40% Australian composite bond index
    20% Australian stock index
    15% First world international index
    20% U.S. S&P 500 index
    5% Emerging market index

    However, I cannot find the First world international index, they only have the USD fund with Saxo for some reason.

    Could you suggest a similar ETF please? I have searched, but do not know enough to recognise a good ETF!

    Also, I am only able to start with $3000… Should I spread this with the percentages you suggest, or start with just one of them at a time until I have enough to start balancing to these percentages? (I am in my mid thirties so looking to invest a few times a year for a few decades.)

  48. Alisha says:

    Hi Mr. Andrew,

    I read your book last summer and no longer have it. I wasn’t ready to invest then, but now I am. My current job requires our retirement be invested. I recall you mentioning a ton about index funds, but can’t remember everything. I am a 29 year old American educator. How would you suggest that I invest? Thanks

  49. Neil Lloyd says:

    Andrew, my wife just returned from this conference with your book. It’s a great read and we’re looking to invest her TpT surplus here in Canada. Just applied for our first TD account with the intention of building a Coach Potato “Assertive” e-series fund with 25% in US, Canadian, etc. Just had a question on the ethics of it all.

    Your book doesn’t bring up the ethics of investing and in general the index fund approach seems to dissuade excluding any particular stocks. I was just wondering if this is something that you consider when you designing your own portfolio, or have researched in the past. Are you a fan of funds like the iShares Jantzi Social Index fund (XEN)? I’m sure you’re aware of your fellow Canadian, Tim Nash, and his work on the “Sustainable Economist”. I must tell you that I see such investment strategies as a social signal rather than a deliberate attempt to shift production away from “unclean” sectors; that I believe is the responsibility of policy and regulation. Nevertheless, signals can be very powerful. Thoughts?

    • Hi Neil,

      When I speak to people who want to take socially responsible investing seriously, I usually suggest that they build a portfolio with 50 or so individual stocks of their choice. I don’t really believe in socially responsible funds. The big question, with such funds, is…”whose ethics are they based on?” Soft drink manufacturers and fast food restaurants have addictive qualities that cause huge health concerns. Yet, they (Coca Cola, McDonalds, Pepsico) are included in most ethical funds. Banks charge outrageous interest rates on credit cards (hence the fact that Muslims find investing in banks to be unethical) but they, too, are large components of most socially responsible funds. WalMart is stuffed with products that are often manufactured under deplorable conditions. Yet, WalMart is a huge holding in many socially responsible funds.

      There’s a huge marketing focus to ethical funds. But in my opinion, if you want to take such investing seriously, build a portfolio of your own stocks that aligns with your personal ethics. Your ethics will not be fully aligned with those of any fund manager’s. Ethics are very personal.

      Cheers,
      Andrew

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