What is the difference between buying STI ETF from creating an account from DBS Vickers itself and just buying from Funds in the DBS Page? - Seedly

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Asked by Anonymous

Asked on 10 Mar 2019

What is the difference between buying STI ETF from creating an account from DBS Vickers itself and just buying from Funds in the DBS Page?

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Richard Woon Tian Jun
Richard Woon Tian Jun
Top Contributor

Top Contributor (Apr)

Level 6. Master
Updated on 07 Jun 2019

If you are buying into Funds on the DBS page, you aren't purchasing stocks yourself - fund managers are doing it for you. You essentially are transferring your investment capital to be managed by a professional, and you will incur management costs. You technically don't "own" the stock, since the fund manager and his fund is the one that owns it, but essentially you will earn the dividends and returns from his investments for you, minus costs of course. There is also a large variety of funds you can choose from that fits your investment horizon or risk appetite.

Buying STI ETF from brokerage accounts like DBS Vickers or SAXO capital markets, on the other hand, is different. ETFs trade like stocks, but traditional mutual funds don't. ETFs basically track a certain index performance, can be the broad market index like S&P, can be very narrow like only EV companies in US. But hardly do ETFs do individual stock picks, because their role is to track performance of a index, not outdo it. Since ETF trades like stocks, you can speculate in it, but it is very difficult to do so for funds, which may have exit costs and entrance loads.

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Question Poster

10 Mar 2019

So if I am buying ETFs directly from DBS Vickers, I will have to create a CDP account then? For the dividends to be credited.
Richard Woon Tian Jun
Richard Woon Tian Jun

10 Mar 2019

A CDP account will be created along with your DBSVickers account, because it is a requirement to do so. So you don't have to worry about needing to create a CDP account seperately, since the person who helps you open the account will help you create the CDP also. However, if you are getting certain brokerage accounts like SAXO or Stand. Chart, then they will have their own nominee accounts where these shares are held in.