As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
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Sunday, 7 April 2013

STI ETF. Passive??? Really??? No Free Lunch and Not Risk Free!!!



STI ETF

Passive???

Really???

No Free Lunch and Not Risk Free!!!


See an example from one of those FAQ on ETF found in Singapore broker's website

What's the difference between the market price and NAV of an ETF?

Net Asset Value (NAV) refers to a ETF's total assets minus its liabilities. It is calculated at the end of each trading day based on the last done price of each constituent stock of the benchmark index. An Indicative NAV (iNAV) is calculated periodically throughout the day.


How are management fees calculated in ETF?

An ETF charges a management fee which is calculated and accrued daily in the Net Asset Value (“NAV”) calculations. This fee will be directly deducted from the assets of the ETF regularly. Most ETF charged their management fees as a Total Expense Ratio (“TER”) which represents the all-in fee that the ETF will pay to the Manager. From the TER, the Manager will pay for all other fees and expenses, such as custodian fee, index-licensing fee and legal expenses, etc. Investors are advised to refer to the prospectuses of individual ETF for information on fees and expenses.



Read? STI ETF - Cost of substitution???

Read all? Rest of them


Ask Uncle8888?

After reading those past blog posts, do you still think that STI ETF really passive?

Not really passive; but affordable for retail investors to do diversification and/or wealth preservation.

Actually, you are just outsourcing your responsibilities for managing your own investment portfolio at costs. Costs over long term will definitely eat into your return.

Absolutely No Free Lunch!!!

Why???

Are you providing more than just lunch for management fee?

Read the above again until you become fully aware.


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5 comments:

  1. it is the method of investing that is passive. uncle cw, you seem to be very against passive investing and that only your methods will work.

    i think perhaps you can structure how to be a stock market master like yourself so that these people who really have no way of beating inflation now that passive investing is not a consideration any more can build their wealth.

    an ebook will be great about personal finance, timing the market, how to evaluate prospective stocks that you can sit tight for 20-30 years at the same time on a very hectic working life.

    ReplyDelete
  2. Actually it is not really completely passive investment. From time to time, some component stock in STI will be taken out and replace by another.

    ReplyDelete
    Replies
    1. And at this time STI ETF investors will usually lose out according to "DOG" in ValueBuddies.com

      Delete
    2. But for 10 to 30 investment horizon, STI ETF maybe a good bet if you are just content with meeting STI Bench Mark. And i think you can also do your own dollar value averaging rather just monthly dollar averaging. So maybe you can still beat the STI Bench Mark if you dollar value averaging "correctly".

      Delete
  3. I requested for an affrdable course by him so long already..
    But he might be busy now planning for his retirement.

    Would sure loved to learn more like what Drizzit suggested.

    ReplyDelete

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