Tuesday, 23 February 2016

Choice of ETFs

I thought about re-writing my posts but decided against it. Might as well summarise the content I have been covering so far and go forward from here. It's more fun that way! Exchange-Traded Funds (ETFs) have started to form a significant part of our investment portfolio. MoneySense has a good article on ETFs and I recommend it as an introduction to what they are. Basically, ETFs are open-ended investment funds listed and traded on a stock exchange, which track or replicate a specific index such as a stock index. Since ETFs are passively managed, their fees are usually lower than those of actively managed investment funds.

We have selected the following ETFs for our portfolio:
The first three ETFs are listed on the Singapore Stock Exchange (SGX) and the next eight ETFs are listed on the London Stock Exchange (LSE). The links provide information on the details and holdings of each ETF. The trading and dividend currencies of these ETFs are SGD, USD, EUR and GBP, which is a currency diversification strategy we use to reduce the foreign exchange risk of our portfolio. The holdings in some of the ETFs overlap but they largely cover the major equity markets - US, Europe (including UK), Emerging Markets and Developed Asia Pacific (including Japan). This is a global diversification strategy we use to reduce the concentration risk of our portfolio.

5 comments:

  1. Hello!

    Thanks for sharing these ETFs for us to consider.

    There is another ETF that I think is worth buying, which is the Vanguard Total Bond Market ETF (BND) in NYSE. This ETF covers quality long term bonds.

    In addition, I would prefer Vanguard FTSE Emerging Markets ETF (VWO) to your no.9 so as to be less exposed to the Pound (due to 'Brexit')

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  2. Hi Heidi,

    I have actually been considering adding an international bond ETF into my portfolio and the Vanguard Total Bond Market ETF (BND) in NYSE is a great recommendation!

    Agree with you on the exposure to Pound and I will definitely look to manage it.

    Cheers,
    TFS

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  3. Great ideas on the currency diversification strategy you had here! Thanks for the sharing.

    David

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  4. Hi,

    I'm a newbie to ETF so would appreciate if you could advise how to go about purchasing those overseas ETFs?

    Thanks,
    DT

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    Replies
    1. Hi DT,

      I use the Standard Chartered Online Trading Platform to purchase those overseas ETFs. Kevin at the Turtle Investor has a great post on how to purchase the domestic and overseas ETFs on that platform. You can refer to this link for the post: http://www.turtleinvestor.net/establishing-bogleheads-3-fund-portfolio-singapore/

      Cheers,
      TFS

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