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Whether it's about navigating the latest market events, unpacking a complex financial concept, understanding the various asset classes or simply sharing practical money tips you can use day-to-day, this is your chance to ask me anything (AMA).
If you have a question that you want to see answered in a future post, submit here.
What are the ETF holdings you would buy as a beginner passive investor?
For a beginner starting out, it really depends on their risk appetite. If we’re talking about stocks then having global exposure is one of the best first steps. That means buying an ETF that tracks global equities (i.e. stocks).
For me, you want what’s known as an “all-world” ETF that tracks an index that has both developed and emerging markets in it - basically meaning all investable countries.
One of the best options is what’s known as a UCITS ETF, which is basically a European-listed ETF. And in this regard, either the Vanguard FTSE All-World UCITS ETF (VWRA) or the Invesco FTSE All-World UCITS ETF (FWRA) are the best options.
As the name suggests, both ETFs track the same index (the FTSE All-World Index). The only difference is that the Invesco ETF is slightly cheaper (0.15% p.a.) versus the Vanguard one (0.19% p.a.) but the Vanguard ETF has a larger asset base and has been around a few years longer than the Invesco one.
Whatever you choose is up to your own personal preference but they both do a good job of tracking a global equities index, giving you diversified exposure to over 3,600 stocks worldwide.
I like a global ETF because you’re not making a bet on which country’s stocks will perform the best (like buying an S&P 500 ETF which is a bet on the US). With this, you still have large weighting in the US - at over 62% - but you also have a 38% diversified exposure to all the other countries too.
Finally, why a UCITS ETF and not a US-listed ETF? A couple of reasons. First off, if you’re not a US citizen then UCITS ETFs are much better from a tax-efficiency perspective (and this applies universally whether you’re a British/Australian/European expat or Singaporean Citizen).
This comes in the form of a preferential dividend withholding tax for UCITS stock ETFs of 15% versus a 30% dividend withholding tax for Singapore residents when they purchase US-listed ETFs.
Second, with “Accumulating” share classes for UCITS ETFs, you’re compounding your wealth at a faster rate given the ETF automatically reinvests the dividends (post-the 15% withholding rate being applied) for you.
That’s in contrast to US ETFs, which are typically “Distributing” in nature and pay out dividends to you (with the 30% dividend withholding tax being applied). By taking the decision - of what you do with the distribution - out of your hands, UCITS ETFs allow you to compound your wealth at a faster rate over the long term.
Finally, there’s the issue of US estate tax, which applies to any non-US resident/citizen who owns US-listed assets. With a low threshold of just US$60,000, anyone who does pass away (who’s not a US resident/citizen) faces a potential 40% estate tax on their US-listed holdings, whether it be stocks or ETFs.
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There are so many miles credit cards in Singapore (DBS, UOB, Citi, AMEX, etc) what’s the number one card you’d get?
If you only want one great miles card (that doesn’t make you jump through multiple hoops like minimum spends or sub-caps), start with the DBS Woman’s World Mastercard.
The name might sound misleading as anyone can apply, regardless of gender. You earn 4 miles per dollar on up to S$1,000 of online spend each month, with no minimum spend requirement.
The great thing about this is that pretty much everyone will spend something online month to month, whether it’s Grab rides, FoodPanda deliveries or just doing some basic online shopping on Lazada/Shopee.
Your rewards come as DBS Points, which can easily be converted into KrisFlyer miles at a ratio of 1 DBS point to 2 KrisFlyer miles. Do note, though, that the DBS points earned on the DBS Woman’s World Mastercard do expire after just one year.
A quick hack to mitigate the chance of forgetting to redeem expiring points? Get the DBS Altitude card and apply for the KrisFlyer Miles Auto Conversion Programme (which is only open to DBS Insignia, DBS Treasures Black Elite, and DBS Altitude cardholders).
This allows Altitude cardholders to pay an annual fee of $43.60 for their accumulated DBS points across all cards to be automatically converted into KrisFlyer Miles - in minimum blocks of 500 DBS points - at the start of every quarter (so 1 January, 1 April, 1 July, and 1 October).
Technically, DBS lists a minimum income of $80,000 a year, but anecdotally, many people have been approved with an income below the threshold. Between the strong earn rate, ease of use, and lack of hoops to jump through, this one sits firmly in my S-tier for miles earning cards.
Just make sure to apply for the World Mastercard version, not the regular Women’s Card — the basic version only gives you 2 miles per dollar.
It’s the perfect “set it and forget it” card for online spending in Singapore today.