Asked on 03 May 2020
Oh Yi Ning, Financial Advisor at AIA Singapore
Top Contributor (Sep)
Answered on 04 May 2020
Hey there! The STI ETF is very heavily concentrated on financials side of Singapore (ie. not very diversified). The returns, gauging from history, has been lacklustre too. If you are in for the long term, consider a S&P500 ETF instead. You can try the Irish-domiciled ETFs since the withholding tax is only 15% compared to the NYE stock market of 30%.
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Nikko Am STI ETF is one way for beginner to start investing. The upside is that there are less considerations to worry about, including withholding tax, foreign exhcnage risk, and custodian fees. However, due to the nature of Singapore's economy (which the fund invest in), the growth potential is severly limited. You may see growth in a few years, but it will not be a lot. One other way is to invest in foreign country's stock market where the chance for growth is higher. An example would be the US. investing overseas will be more complicated and I would advise reading up more about it first.