I've seen many comments that the STI ETF is 'trash'. But I don't really understand why? I invested in this via Unit Trust Funds via DBS a couple years ago. Right now I have $7k inside... Any advice?

Your portfolio reflects your view of the future. A person holding predominantly Singapore based equities generally holds the belief that the returns from Singapore will exceed international equities.

Considering your short time frame, you need to manage your expectations and start doing your numbers and your financial goals. Manage your cash-flow, manage your expectations, and find a plan that suits your objectives.

Robos are good due to the low cost of entry and automated systems in place to ensure that risks are mitigated. It is a great starting point for many people who do not want the hassle of managing their investments. And one which I highly recommend to most people starting out their investment journey.

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Hi Anon,

The STI ETF has very limited growth potential compared to other indexes like the S&P500. The STI ETF is heavily focused on banks, and these banks have very limited potential for growth. The main returns that you would expect to receive is via dividends.

For the S&P500, it is more focused on tech stocks. There is a huge growth potential for tech stocks. Moreover, most S&P500 companies are multinational companies which really shows the growth potential of these companies compared to those in Singapore.

It is definitely enticing to invest in foreign stocks. However, there are 2 main things you need to consider:

1. Foreign currency exchange risk

2. Taxes on returns (e.g. dividend withholding tax and estate tax)

These may eat into your returns, but overall I still feel that the gains you earn is able to negate such risks.

However, I strongly encourage you to read up on these indexes and stocks first before diving in. You should only invest in stocks / indexes that you are able to stomach the risks when investing in them.