STI ETF versus other Singapore Unit Trust

We always say that due to their low cost, failure of active managers to consistently perform well, the STI ETF is the way investors should choose if they want to build wealth in the Singapore context.

I decide to tabulate this data where the annualized returns of the SPDR STI ETF, with dividends reinvested are measured against the Singapore focus unit trust I can find on Fundsupermart.

Annualized 1 Year Result

STI ETF versus other Singapore Unit Trust Aj2ndNQ

STI ETF on a 1 year basis was found to be at the bottom half of the unit trusts.

Annualized 3 Year Result

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On a 3 year annualized basis, the STI look so bad at the bottom. All the unit trust did better during this period where markets was pretty sanguine.

Annualized 5 Year Result

STI ETF versus other Singapore Unit Trust G0xCOQ2

On a 5 year basis, other than Shenton HIF Dividend Singapore Equity, STI ETF trounced most of the unit trusts. This was a period from 2009 onwards. Perhaps this goes to show what happens when an index is fully invested in the market versus the unit trust, which is likely to be holding larger amounts of cash.

Annualized 10 Year Result

STI ETF versus other Singapore Unit Trust dge3O7A

On a 10 year basis, only 4 unit trust have a 10 year history. I was surprised United Singapore Growth Fund, Schroder Singapore Trust, Nikko Shenton Thrift did not have a 10 year history. STI ETF did rather close to JP Morgan and DWS Singapore’s fund despite being in the bottom half.

Some of my conclusion

The problem is that it is rather unsafe to conclude anything from this because the sample size is just too small. When the sample is too small we get more extreme results. Perhaps this is more telling at the 3 year and 5 year result.

On this basis if you are a long term investor, cost doesn’t seem to factor highly here. Perhaps, if you are thinking that, by paying a much higher expense ratio for the unit trusts you should expect a much higher performance, the 3 year result would show it, not the rest of the time period. We also cannot draw a conclusion that cost attribute to poorer performance here.

2 funds look rather good based on hindsight, that is the Aberdeen Singapore Equity and the Shenton HIF Dividend Singapore Equity.

No matter which fund, your wealth would be much better than 10 years ago, 5 years ago, 3 years ago or 1 year ago.

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Good Advices from Bad People and Critical Thinking

Two events that happen recently that I thought are good lessons here.

The first one, which I brought to readers attention here on Tony Robbin’s new book on something similar to the all weather portfolio. In the article Barry Ritholtz goes back in time to take a look at some questionable forecasts that he made on the stock market in public interviews (long story short his advice would have cause folks to miss a great bull run in the SP500’s history)

The second one, was what I link to my friends on my Facebook on an inspirational Russian born US guy Anton Ivanov,  who shares on his blog and Yahoo Finance how he amassed $1 million dollar by 27 years old through the things that he has done. Some how he was exposed by colleagues in the army and friends questioning how the heck he can have $1 million so fast. Turns out, a large part of it is down to inheritance. He has since taken down his blog.

While I feel that both situations are a bit different, but they largely has a negative tilt to it. In the case of the Robbin’s situation it is to show that public people might not make the best market oracle and basing your wealth building on that can be rather detrimental. The Anton situation is that he has betrayed a lot of people’s trust. To such an extend that a few blogs allow him to guest post on their blogs.

What is similar in both cases, to me, is this:

The materials provided are generally fundamentally sound. They do more good than harm. If you have listen to the two of them, you get more closer to the destination than the starting point. And its not going cost you an arm and a leg considering they are pretty cost focus.

What clouds the two situation was that emotions and character comes into the question. I have no reason to defend them cause I am no friend of them, but at times when you come across something, no matter how much you hate the writer, the group, its good to build up the system to critically think, and be able to reason effectively. I was able to look at a lot of people’s investment that I disagree with and see how I could have missed out certain subtle things. 

Its not gonna be easy to do that but reading things you disagree with also guard against confirmation bias or endowment effect.

The opposite is also true. How many times we taken advice from someone who we connect very well with, very well meaning but their advice and instructions are just unsound? If the person is the most pleasant person in the world does that mean he provides sound advice?

The last point that is similar amongst the two is that, they write about this, but you realize that Robbins probably don’t build his wealth or preserve his wealth this way, and that sine majority of Anton’s wealth comes from inheritance, what he has now might not be due to what he writes.

Does this mean we should trust what they put out less? Thinking along this line, wouldn’t Kyith be a hypocrite if he has written so much on passive investing yet if you look at where he puts his money, its more actively manage!

This last one seem to be liken to your doctor. You go for him or her for advice and help, but that doesn’t mean the doctor have your problem.So should we trust the doctor less because of it? We should trust the guru who recovered from cancer and trying to sell how she got better than your western doctor?

Sometimes I think we get spammed by too much Facebook inspiration, myth debunking and helpful tips that we accept them too much and stop exercising our brain muscles. While we go to such social medium to take a break from work and not to put more pressure on the brain, these ‘information’ does have a profound impact that might adversely affect how we view the world in an unsound manner.