facebookHow does investing in STI ETF works? What is the difference between SPDR STI ETF (ES3) & NIKKO AM STI ETF (G3B)? Also, for a beginner, would a lump sum investment or monthly investment be more suitable? - Seedly

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Jared Ho

Jared Ho

18 Apr 2019

Random

How does investing in STI ETF works? What is the difference between SPDR STI ETF (ES3) & NIKKO AM STI ETF (G3B)? Also, for a beginner, would a lump sum investment or monthly investment be more suitable?

Discussion (3)

What are your thoughts?

I am going to break up your question into a few parts.

1) How does investing in STI ETF works?

If you mean the procedure, it is the same as investing in a stock. You need to open a CDP account with SGX and a brokerage account with any stock broker. Then, through your stock broker, buy into STI ETF. Some useful links:

Opening a CDP account: https://dollarsandsense.sg/step-step-guide-open...

Comparison of stock brokers: https://blog.seedly.sg/the-ultimate-cheatsheet-...

Buying into STI ETF means you are buying into the top 30 companies listed in SGX. You can refer to a clearer explanation here: https://blog.seedly.sg/how-to-sti-etf-a-simple-...

2) What is the difference between SPDR STI ETF (ES3) & NIKKO AM STI ETF (G3B)?

Essentially, they are managed by different fund houses, namely SPDR and Nikko AM. Although the fund idea is the same, which is to buy into the top 30 companies listed in SGX so that the fund replicate the index as close as possible, the similarity ends here.

Since different fund houses manage the fund differently, returns, dividends distribution, management style vary. Choose a fund house you are more confident in and you will be fine.

3) Also, for a beginner, would a lump sum investment or monthly investment be more suitable?

Depends on your budget. Some people have the budget to do lump sum while some have the money to do monthly only.

But is also depends on other factors too. Alvin from Dr Wealth has mentioned that historically, lump sum performed better but monthly investment is the best during economic downturn. All in all, I personally feel that it depends on your cashflow, although I would strongly advise monthly investment.

By setting up automated monthly investment plan, you will put in money automatically, regardless of the market condition. This automated action helps you to be disciplined and reduces the need to keep monitoring stock prices.

Hope this helps!

Jay Liu

Jay Liu

18 Jul 2018

Accounting and Finance at ACCA

The difference is the funds managed are by different managers SPDR & Nikko AM. Difference in the expensive ratio, fund size, inception date and annual returns.
Do monthly investment aka dollar cost averaging. You buy more units when price is lower, buy less units when price is higher. Good for low capital and want to start investing.

Start with DBS rsp aka Nikko Am STI ETF. Easy to set up just use ibanking. For every transaction you do, they will mail you a physical letter.

Kenneth Lou

Kenneth Lou

16 Jul 2018

Co-founder at Seedly

Hey Jared!

The Straits Times Index, Exchange Traded Fund (STI ETF) was designed for passive ...

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