facebookMy first dive into the investment world at 30yo with IBKR. Thinking of etf portfolio consist of : S&P 500 ETF (VUSA or CNPX) 40%, STI ETF 40%, ABF Bond Etf 20% - Seedly

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Anonymous

18 Apr 2021

General Investing

My first dive into the investment world at 30yo with IBKR. Thinking of etf portfolio consist of : S&P 500 ETF (VUSA or CNPX) 40%, STI ETF 40%, ABF Bond Etf 20%

Any advise if this is a good combination?

On the side note, I am also still thinking if s&p500 etf or total world index etf better?

I hold back on total world index etf becos of the high expense ratio compared to s&p 500 generally.

Im on monthly DCA and plan to rebalance once a year.

Thanks!

Discussion (5)

What are your thoughts?

thefrugalstudent

thefrugalstudent

18 Apr 2021

Founder at thefrugalstudent.com

Hi Anon,

Personally, I think STI in itself is a fine investment, but 40% allocation to STI seems pretty high, is there a particular reason for that? I think I'd reduce that to something like 10-20% if you really want some exposure to SG stocks.

Between S&P 50 and a world index, I've actually been using a world index and am planning to switch to S&P. Not only is the expense ratio lower, but S&P has also seen more growth in general. So I think I'd go with that, plus a China/Asia ETF for better diversification.

Hope this helps & all the best!

Regards,
thefrugalstudent

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Chris

Chris

18 Apr 2021

Owner and Writer at Tortoisemoney.com

Between world and S&P 500 only, perhaps you would wish to consider world index despite the higher expense ratio. This opens up your exposure to other regions as well. Moreover, world index ETFs are usually consisted of 55-65% US exposure anyways so you're still exposed to the US in that regard.

Also, regarding the STI, I understand that many Singaporeans like the STI due to familiarity with the names but personally, I wouldn't recommend it due to the nature of the companies in the STI. If you do really want to keep it though, I would reduce it to maybe 5-10% instead, becuase if you think about it logically, giving the STI a 40% weightage is essentially overweighting on Singapore's economic performance in your portfolio considering the size of Singapore's economy to the world.

Lastly, for bond ETFs, I guess it's the traditional advice to include a small portion of bonds into your portfolio. But if you have a higher risk appetite, I would advise you to just leave it out until you're closer to retirement when you need more stability (say 5-10 years out). Of course, if you wish to keep the 20% bond fund, there's nothing wrong with that either 👍​​​

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