Part 1 : Unit Trusts and Exchange Traded Funds

by **vision3001** on 08 Dec 2005, 21:12

Yes, I agree with what you have said.

That's why for global investor who are chosing a broker anywhere in the world, one have to be sure that the company itself is reliable.

For unlisted company, it's less easy to check. However, for listed company, it's much easier as more information are avaliable. My classic test of a diasterous listed company check is to monitor it's published insider transactions and take note the ratio of buys and sells at different price points. For Enron, you see a consistent SELLs from it's 3-digit price, all the way downwards. There was zero buy - that's super fishy to me.

There are probably a few other companies that are in this situation.

wilfredling wrote:vision3001,

A locally regulated entity provides the investor a cheaper legal avenue in the event of a problem with the party.

A locally unregulated entity provides the investor with NO legal avenue in Singapore. For the investor to pursue and enforce his legal rights, he has to pursue it in the foreign jurisdication which is very much more expensive in terms of legal fees and logistics such as frequenty travels.

Perhaps the sophisticated investor has no such concern but a retail investors may find his entire investment being wiped out due to legal and travelling fees alone.

by **yuen_tms** on 09 Dec 2005, 01:00

Hi, I was adware of the risk invloved. Just exploring the options of getting ETF. Heard you all mentioned about poems. Is there the same risk involved by opening a us brokage with poems to trade in AMEX, NSAD?

Was thinking if poems offers good choices of ETF. Currently, i only found iShares ETF for quite many different countries i think.

by **vision3001** on 09 Dec 2005, 08:33

Do check the commissions. Between maximising convenience / lowering trading expenses, I chose to focus on the latter - this is assuming that the brokers are comparatively well established, with good track record.

Is it in percentage or $ per trade (qty?).

yuen_tms wrote:Hi, I was adware of the risk invloved. Just exploring the options of getting ETF. Heard you all mentioned about poems. Is there the same risk involved by opening a us brokage with poems to trade in AMEX, NSAD?

Was thinking if poems offers good choices of ETF. Currently, i only found iShares ETF for quite many different countries i think.

by **jfc18** on 05 Mar 2006, 15:52

Hey... got a question on ETF...

I understand that most ETFs are in USD. For example, if i want to purchase S$5000 worth of USD denominated ETF via DBS Vickers, do i only need to pay S$5000 to Vickers, then they will minus the USD$29 (commission) and Forex fees from this S$5000 (similar to UT purchase)... or its S$5000 + USD$29 + Forex fees??

And... wats the usual Forex fees (in terms of percentage) charged by Vickers to convert the SD to USD??

by **wilfredling** on 05 Mar 2006, 17:31

jfc18 wrote:Hey... got a question on ETF...

I understand that most ETFs are in USD. For example, if i want to purchase S$5000 worth of USD denominated ETF via DBS Vickers, do i only need to pay S$5000 to Vickers, then they will minus the USD$29 (commission) and Forex fees from this S$5000 (similar to UT purchase)... or its S$5000 + USD$29 + Forex fees??

And... wats the usual Forex fees (in terms of percentage) charged by Vickers to convert the SD to USD??

Unliked Unit Trusts, you do not specify the exact amount of money to be paid. The amount of money to be paid to the broker is calculated by the market stock price X shares bought + brokerage fees and GST.

by **jfc18** on 05 Mar 2006, 23:57

wilfred,

then wat about the forex fee?? when u bought your ETFs... wats the forex fee incurred by vickers??

by **wilfredling** on 06 Mar 2006, 00:00

jfc18 wrote:wilfred,

then wat about the forex fee?? when u bought your ETFs... wats the forex fee incurred by vickers??

I do not know the exact bid-offer spread charged by the brokerage house. However you can always deposit your own USD into your trust account first and then pay the bill from there. There is no need to use the forex exchange from the brokerage house.

by **jfc18** on 06 Mar 2006, 00:35

wilfred,

thanks for the info, man!!

by **choozm** on 06 Mar 2006, 01:00

I called DBSVonline last week to check their indicative USD rate:
USD SELL : 1.6311
USD BUY : 1.6261

The spread is about 0.3%, very much lower than ~1.3% of local banks.
Of course the USD29 commission is very high, IMO.

by **jfc18** on 06 Mar 2006, 01:06

Hey... most of you only tok about equity ETFs... wat about bonds ETFs?? Any one bought a bond ETF before??

by **Drizzt** on 06 Mar 2006, 05:59

generally bond ETFs are tax inefficient due to its high capital distribution. i dunnno whether that is still the case right now. it is better to supplement that with local purchase of bond funds.

by **choozm** on 06 Mar 2006, 10:32

Drizzt wrote:generally bond ETFs are tax inefficient due to its high capital distribution. i dunnno whether that is still the case right now. it is better to supplement that with local purchase of bond funds.

yes... the 30% withholding tax on capital distribution will erode the return substantially since the main return from bond is capital distribution.

by **Drizzt** on 27 Mar 2007, 08:33

Hi was wondering if Wilfred has anything to add with regards to Estate duty for this article. I feel it is very important that such an important consideration be added to the article for newbies sake.

by **wilfredling** on 27 Mar 2007, 08:35

Drizzt wrote:Hi was wondering if Wilfred has anything to add with regards to Estate duty for this article. I feel it is very important that such an important consideration be added to the article for newbies sake.

I though the estate duty issue has been discussed so many times in other thread already?

by **Drizzt** on 27 Mar 2007, 08:46

hi wilfred, understand that, but shouldnt it be consolidated within one write up, or was it mentioned in other Parts of your write up?

by **wilfredling** on 27 Mar 2007, 08:48

Drizzt wrote:hi wilfred, understand that, but shouldnt it be consolidated within one write up, or was it mentioned in other Parts of your write up?

i got no admin rights to edit the articles. Can you add a footnote in all ETFs related articles about the estate duty problem?

by **Drizzt** on 27 Mar 2007, 09:37

ok sure. i will do that.

by **ScoobaPro** on 05 May 2007, 19:33

I have a question on brokers and custodial fees for non-SG shares. Which broker does not charge custodial fees, as I am interested in ETFs listed in HK?

Thanks.

by **pipi486** on 25 Sep 2008, 21:45

thanks, I had a good read

by **Hulumas** on 26 Aug 2009, 16:47

jfc18 wrote:Hey... most of you only tok about equity ETFs... wat about bonds ETFs?? Any one bought a bond ETF before??

Dear Jfc18,

How are you getting on so far ::?:

Part 1 : Unit Trusts and Exchange Traded Funds

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