I am thinking of investing in RSP STI ETF via FSM due to low transaction fees. I heard that S&P500 is good as well, is Kristal.AI the best way to RSP for that? Or is lump sum better? - Seedly
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Anonymous

Asked on 05 Jul 2020

I am thinking of investing in RSP STI ETF via FSM due to low transaction fees. I heard that S&P500 is good as well, is Kristal.AI the best way to RSP for that? Or is lump sum better?

How to determine which ETF is faring well? Do i just look at the dividend yield trend? very new to this and advice will be greatly appreciated!

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For your question on how to determine which ETF is fairing well, you can look at the returns that can be found on the ETF website. S&P500 ETF will produce better returns than STI ETF even though the latter has higher dividend yield.

There are few reasons why I decided to use FSMOne’s ETF RSP instead of Kristal.AI even though the latter is free for the first US$50k are as follows. 

Firstly, you can buy fractional shares using FSMOne’s ETF RSP but not Kristal.AI. With FSMOne’s ETF RSP, you can buy into VOO with just $50. On the other hand, Kristal.AI requires a minimum amount of 1 share to start their Systematic Investment Plan. What this means is that if VOO is getting more expensive every month, with FSMOne’s ETF RSP you will receive less fractional shares while you have to fork out more capital to own that minimum 1 share of VOO with Kristal.AI. 

Secondly, even though Kristal.AI offers zero commission for the first US$50k which can be quite enticing for many, their commission structure is different from each other. Kristal.AI charges investors based on AUM while FSMOne charges based on trades commission. In the long run, once US$50k is hit, Kristal.AI will be more expensive as one has to pay more in fees when their portfolio gets bigger. On the other hand, for FSMOne, since investors are charged by the order amount, the cost will be cheaper in terms of percentage over the total capital outlay in the long run. 

You might argue that one should buy into Kristal.AI until it reaches US$50k and switch to other brokerages to continue their RSP but I believe in the long run and the convenience that one will have if they buy using FSMOne ETF RSP from the start. The deal breaker for myself is the minimum share of 1 for using Kristal.AI’s SIP in the sense that I have to fork out more capital if the share price goes up. I would rather own less of the shares than to fork out more cash.

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Question Poster

07 Jul 2020

Thanks! I understand for STI ETF it is better to DCA than to lump sum. Is this the same for s&p500 as well? For s&p500 will we be taxed on dividends? Was reading up about how we should get ireland domiciled s&P500 so we will get taxed 15.instead of 30 percent
Evaris Deepak Regis
Evaris Deepak Regis

7h ago

Hi Tan Wei, i realized that FSMOne doesn't allow RSP into ETF's which are not on their "list". For example, i was looking at ARKK which is available to buy but cannot RSP. Have you encountered this issue ?