Asked on 05 Aug 2020
I am currently an NSF (ord in 9 months) and wish to start investing. I currently have a savings plan with AIA Pro Achiever, putting in $200/mth. I intend to invest some extra $200-$400. Is ETFs the right choice to go? I appreciate any advice given
AIA Pro Achiever is actually an Investment Linked Policy (ILP) even if it may be marketed as a savings plan as you've mentioned.
There's nothing wrong with getting an ILP if you don't really want to take as much risk and are not confident of doing better than the ILP's returns. I personally don't like having my money locked up for such a long period of 13 years under AIA Pro Achiever.
ETFs are no doubt an easier route to go as you're provided with diversification as well as some capital appreciation and dividends. You can gain access to it either by investing in ETFs directly or through a roboadviser. I would recommend the latter as roboadvisers provide features such as rebalancing of portfolio and fractional shares (some, not all).
Lastly, if you don't mind taking on more risk and don't have any financial liabilities in the medium term, then you can consider getting into equities.
ILPs are generally not worth it if as compared to passive investing in an ETF. I personally agree with Frankie's answer (his article is long, but please read and understand what he wishes to convey) so you can then digest and decide if you wish to continue with the ILP.
Yes like what ATJY said, AIA pro achiever is actually an ILP. You should talk to your financial advisor about it as i really don't recommend someone buying an ILP due to its high costs. They will charge you around 2.5% per annum just to help manage the fund. Additionally, the money is being locked up too.
If you are new to investments, you can try out robo advisors like stashaway or syfe. They will help you diversify your portfolio at a low cost!
Additonally, if you are more adventurous, you can also invest in ETFs on your own. Do use the regular savings plan option in FSMone to adopt dollar cost averaging. If you need the referral for stashaway so we can both get 6 months free management, do let me know!
Cancel the AIA Pro Achiever if you just started, the trade-off is just not worth it.
I'd suggest 2 things for DCA
Regular Savings Plan - I personally like FSMOne due to their wide selection of ETF, POSB Invest Saver and OCBC BCIP are very Singapore-centric imo
Robo-advisor - my personal favourite is StashAway, of course you can research on others too such as Syfe, EndowUs, etc
I generally feel ILP has more disadvantages than advantages as the returns are not really guaranteed & sometimes after 10years... negative returns :/ or just low returns in general :x there’s better place to invest :))
If you’re a beginner, try using Robo Advisor like StashAway/ Syfe -> higher returns and can withdraw your money anytime!!! 🌟
ETF is always the right way to go for retail investors.
Those AIA plans are complex 'structured products' that are difficult to understand and leading as an investment to inferior performance when whole life is an underperforming product generally.
Better advice for ultra-longterm investing would be to open a Singapore online brokerage account (f.ex. TD Ameritrade Singapore branch since a few days has zero trading fees on the U.S. markets) and periodically buy (&hold) an MSCI World ETF or ticker VT.
here are mentioned some more things to avoid (but also do not follow my own riskier investing ideas mentioned there!):
Hi. Will you be paying for your own tuition? If yes, you’ll have to side aside those funds accordingly. As you’ll need the funds in the short term, you definitely should not take that monies to invest.
Else if your tuition and university living expenses is settled, and you have remaining funds to invest then you should look into investing into a portfolio with more equities as you are still young and have the time horizon to ride out market lows.
If you are not a very financially savvy and don’t know how to pick your own stocks, then ETFs is a good idea. You can also consider roboadvisors like Stashaway or Syfe.
For example, you may pick a brokerage like FSMOne and dollar cost average into Vanguard S&P500 ETF which is an etf which tracks the S&P500 index hence sometimes referred to as an index fund.
Personally Im also NSF and investing in STI ETF using POSB Invest Saver because they had a promotion on sales charge a while back as well as Syfe REIT+ because they pay dividends quarterly. But once the promotion for POSB Invest Saver end, Im thinking of investing into Equity100 with Syfe with a 20-30 year horizon.
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