Asked by Anonymous

As a new investor, should I purchase ETFs using POSB invest-saver or using Robo-advisors (Stashaway/Smartly)? If I use robo advisors, will the returns be lesser/affected due to currency impact?

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    • Jay Liu
      Jay Liu, Diploma in Accountancy at KHEA
      193 Answers, 345 Upvotes
      Answered on 15 Sep 2018

      How about both? When you invest in robo-advisors e.g. Smartly, you are investing in US ETF too. So it depends on the market exposure you are looking at. For smartly it's converted to sgd on the site when you view it. There is also a currency impact portion where you can view it too. It changes everyday so when you feel that it's time to cash out, you can do so.

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    • Jasmine Tsoi
      Jasmine Tsoi
      12 Answers, 37 Upvotes
      Answered on 15 Sep 2018

      I think it depends on which market you want to start investing in! I use posb invest - saver for the regular savings plan to buy STI index. But I use Autowealth to buy US ETFs which is something I will never be able to do myself without their platform. I think if you are a new investor, it might be good to diversify as well.. maybe start off with Singapore ETFs first because probably lower risk? The admin fees are also lower for posb as compared to roboadvisors I think!

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    Marcus Goh
    Marcus Goh
    26 Answers, 43 Upvotes
    21 Jun 2018

    Firstly, Congratulations on taking the first step to start your journey with ETF. It is a good starting and learning point!

    Secondly, It depends on the returns and the different markets that you want to be exposed to.

    There are mainly two types of fund that people invest with POSB invest-saver

    1) Nikko AM STI ETF (Sales Charge of 1%)

    2) ABF Singapore Bond Index (Sales Charge of 0.5%)

    Benefits

    • Low Charges in Fee
    • Provides diversification in Stocks and Bonds

    Downside

    • Predominantly in the Singapore Market, does not provide adequate diversification in overseas markets.

    https://www.posb.com.sg/personal/investments/investing-in-funds/invest-saver

    Robo Advisors (Stashaway, Autowealth, Smartly)

    Leveraging algorithms in order to access your risk profile be it low risk or aggressive.

    Benefits

    • Provides diversification in Global ETFs to different markets of stocks and bonds and does not limit to only local market (Singapore)

    Downside

    • Annual fee, Platform Fee and etc (Recurring costs which will erode your returns)
    • Robo advisor are heavily into US ETF which have a 30% dividend tax on US equity if vested
    • You will be subjected to USD conversion rates and incurring currency fees charged by the brokers

    https://blog.seedly.sg/singapore-robo-advisor-investment-comparison/

    https://dollarsandsense.sg/robo-advisors-in-singapore-what-you-need-to-know-before-investing/

    You can read more in the link above on the pros and cons of each and ultimate decide your choice based on returns, exposure to markets and fees charges. Hope this helps!

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