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HL Low

24 Dec 2019

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General Investing

What is the best amount on single ETF stock if I would want to diversify my portfolio?

Hi all, currently I have about $5000 on Nikko AM STI ETF. $1000 on SPDR S&P 500 ETF and $500 on Singapore Airlines.

Not sure whether am I diversify the right way. As it seem like STI ETF purchase is more than other stock. Knowing that SPDR S&P 500 ETF is increasing should I top up to balance it?

What other advice would you guys can provide me?

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Hariz Arthur Maloy

24 Dec 2019

Independent Financial Advisor at Promiseland Independent

Hey Anon,

Right now you're concentrated on Singapore Equity with almost 85% of your portfolio.

To diversify globally, you need to hold positions in every developed market, and some emerging market. You can do this by either investing in a global fund, or buy individual specific country or region funds.

So it depends on what kind of diversification you're looking for. You're diversified in the Singapore Market because you hold 30 stocks, but you're not diversified regionally or globally. You're also not diversified sectorally because 50% of the STI index is in financial companies (mainly the 3 local banks), another concentration.

So understand a little more in asset allocation before you make decisions on your portfolio.

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