Friday, 24 September 2021

STI ETF can be good for those who can't Cut-Loss


I'm not a fan of passive investing.

It just intellectually "weird" to me, to savour the pleasure of  getting rich, by not doing anything at all???

The analogue is like winning an Olympic gold medal by sipping pina colada while chilling in the shade on the beach...

But I must say there's one good thing about passive investing using the STI ETF - its great for those who can't bring themselves to cut-loss on losers.

STI will do it for you!

FTSE Russel and SPH do quarterly reviews on the STI component stocks. Any lemons/dead anchors that are dragging the STI down will be kicked out!

They will in turn add "hot" stocks of the season into the index. 

That's the secret sauce why stock indexes always go up!

How not to go up if we only include stocks that go up, and weed out stocks that go down?

Its never passive.

Can you imagine how bad it must be for SPH to ownself kick ownself out of STI?

The current STI ETF is still 3 banks and 1 telco (plus REITS & property if you pedantic). 

ZERO exposure to tech unicorns...

What about SEA Ltd? 

Oh! That's included into the MSCI Singapore Index.

Those who trade the SIMSCI futures will know. Wink.

I know what you thinking.

Is there an ETF for MSCI Singapore?

Yes, you can goggle iShares MSCI Singapore ETF. 

Its listed in the US.

But, but I already torn deciding which is better - SPDR or Nikko STI ETF?

Now I sharing another extra choice is not helping!

Don't worry. 

Just go back to the person who sold you on "passive" investing. He/she will tell you what to do.

Problem solved!

Snake oils love customers like you!


  1. Smol,

    "What about SEA Ltd? Oh! That's included into the MSCI Singapore Index."

    Is that why EWS has been doing slightly better than ES3 over the past few months? :P

    Sea now has about 10% weighting. It will go up to 30% (!!!) by next Feb ... DBS look out! LOL

    No wonder Sea share price is up 69% since the sell-the-news low in May. More room to grow as it moves from 10% to 30% weighting?

    So that's where they got the money to hire Jackie Chan to do Bollywood dancing. :P

    Probably another big price drop next Feb as MSCI finishes with scaling in Sea into the S'pore index. Hoho!

    Don't forget Grab ... if its SPAC launch goes gangbusters, then yet another consumer tech company into SG index.

    But 2 things I gotta disagree with you.

    1) Passive investing is probably still the go-to approach for majority. And by passive I mean mandatory, automated, & locked up ... like CPF-SA kekeke.

    The difference will come after 30 years.

    2) STI / S'pore ETF is terrible as a main passive vehicle. Singapore makes up only 0.6% of world GDP ... and you don't want all your eggs here when people finally accept that 95% of HDB will go to zero, or in the next Great Asia-Pacific War between China, US, Japan, Oz, India, UK.

    PS: 99% of people who buy passive ETFs aren't doing passive investing. ;)

    That's why gotta lock it up & compulsory for it to work.

    1. Spur,

      FTSE Russel and MSCI are "competitors".

      Let's see whether FTSE Russel will monkey see; monkey do?

      Or be "defensive" like some in our community when pointed out that our STI ETF has underperformed US indexes by quite a bit...

      "Look, STI is for conservative yield hog investors. We'll never include SEA Ltd. Wait it crash how?

      Cannot give our old fogey fanbase heart attacks! You think why we flooded the STI with REITS and other boring dividend stocks?

      Go away, don't disturb me! If you like high growth tech stocks and more volatility, go buy Nasdaq or Hang Seng Tech index lah!"

      Now to address your objections:

      1. Your "sales spin" won't work in Japan. A Charlie Brown Japanese passive investor who bought at the top, and diligently averaged down after all these years is still under water after 30 years. Pain!

      2. But if you are a mainland Chinese passive investor who come complaining to me about underperformance, I'll say exactly what you've said,

      "Don't worry. Stocks always go up one! Sure, sure! Look, you have only invested for 15 years!

      For passive investing to work, you need to stay the course for 30 years. Be patient! We only need to wait another 15 years. Trust! Have faith!

      Remember, we are "INVESTORS"; we are NOT speculators or traders!"

      After holding the client's hand and some reassuring pats on the back, quickly shoo the client out the office.

      The snake oil smiles to himself, "In another 15 years, I'll be retired. Catch me if you can!"

      And that's the biggest drawback of passive investing. You need 30 years to know whether it works for you or not...

      If it works, great! (The only fly in the ointment is you still have no clue when to SELL)

      If passive investing fails miserably... You have just lost 30 years... Try recovering from that!

      But one thing we have agreement on:

      99% of people who buy passive ETFs aren't doing passive investing ;)


  2. Hi SMOL,

    Maybe the idea is that it is too risky to lump in tech for the "mainstream" ETF on SGX since their prices can defy gravity and yet crash just as parabolically.

    Btw, SPACS coming. Will we one day see tech ETF on SGX? It will be a wonder.

    1. Rainbow girl,

      I find it "interesting" why would retail investors be "excited" with SPACs coming to Singapore?

      Never mind what happened in the US...

      We don't even know what company we are investing in!!!???

      Its just giving a blank cheque to a empty shell company and hope they can acquire some tech unicorns that will perform?

      Of course if I'm bringing SPACS into Singapore and selling them to speculators and bei kambings, I would be excited!


      As would startups looking to sell themselves to SPACS. I mean its a lot easier than doing the IPO themselves ;)

      Money is made through SELING.

      I thought we have seen this movie before with S-chips?

    2. Hi SMOL,

      SPACs in the US have left bitter taste in the mouth for some.

      Ya, not too hopeful about SG ones. Haha.

    3. Rainbow girl,

      Looks like somebody is doing her own - Trust but Verify!


  3. Smol,

    My 2 points above are meant to be taken together. :)

    For real passive investing & to be locked up for 30+ years like CPF, it has to be asset allocated into global ETFs, some REIT ETFs, some aggregate bond ETF (even though bonds are hated worse than Covid now), and some commodities/gold ETF, together with annual rebalancing.

    Single-country funds, sector / thematic funds, or even regional ETFs by themselves are too risky for all-in buy-and-forget over 30-40 years.

    My prediction is that eventually CPF will probably go this route.

    When GIC & Temasek were generating 10%-20% per annum, yeah they could support the Holy Trinity of growing the reserves, supporting the budget, and paying CPF members 4%-5%.

    But now with average CAGR of 7%, they can barely support a single one of them. Maybe 2 if you're willing to compromise.

    Regarding SPACs, the SEC really dropped the ball on this one when they went after Pershing Square Tontine Holdings & forced it to scrap the merger with Vivendi's Universal Music Group for being "too complicated".

    Since the scrapping of the deal in July, UMG IPO'ed independently 3 days ago in Amsterdam & shot up 36%. It's the largest music company in the world, with Lady Gaga & Taylor Swift under its belt. Tencent owns 10% of it.

    But don't feel too badly for Bill Ackman. He bought UMG shares for his other hedge funds. But PSTH investors are flaming mad & I don't blame them.

    The SEC had good intentions by going after a big, well known SPAC to cool the speculative fever, but it went after the wrong guy.

    Instead the SEC has turned a blind eye to tons of other SPACs who are pushing unprofitable & BS companies onto investors, with insiders & the SPAC pushers often holding warrants to cash out like Ali Babas' lol.

    So what to do when SPACs appear on our shores?

    Don't buy the SPACs.

    Buy SGX!

    (ok, you can speculate & put 1% or 2% into some lottery SPAC)

    1. Spur,

      I'm merely doing what a snake oil will do:

      1) Divide and conquer.

      2) Quoting out of context.

      3) Use examples that support my argument; conveniently have amnesia on those that invalidate my spin!


      We pretty much see eye-to-eye when it comes to passive investing. Although I'm glad we still have another disagreement!

      I'm a bull on Asia ex-Japan outperforming Europe and US for the next 30 years. So non of that global dilution/diversification for me ;)

      Any time frame longer I'll probably be dead... Even if alive, what can I do with the money when I'm in my 90s?

      As for SPACS, I guess they will be fun and profitable for those early adopters like in S-chips and cryptos. Newly born calves not afraid of tigers!

      Its great as a speculative bet; definitely not something for Buy-and-Forget...

      I think I'll give the CPF acolytes a break. I'll let you take over in "poking" them ;)

      Be gentle!

  4. Either we spend time and effort to DIY and polish up our craft or just outsource to fund managers. Outsourcing is BAU since most of organizations and individuals are doing that - outsourcing to save time or costs.

    1. CW,

      Even hawkers nowadays practice outsourcing!

      From washing of dirty plates, to chili, to fishballs, to even luncheon meat!

      This luncheon meat I discovered recently when the nasi lemak and economical bee hoon hawkers start selling luncheon meat at "consistent" thickness!?

      In the past, it was pure luck - sometime get a very thin slice, sometimes lucky get a thicker slice...

      Then I found out one enterprising company started supplying hawkers with PRE-SLICED luncheon meat!!!


      The trouble with outsourcing is one must be good at "reading" people.

      And work with these money managing "shepherds" from a landowner perspective.

      Most retail bei kambings just let these "shepherds" fleece and milk them...

      Talk and behave like sheep; no shortage of shepherds will treat you like one!


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