rakuten trade foreign equity trading account

Rakuten Trade Foreign Equity Trading – What we know so far (+FREE 1 US Share when you apply!)

Soon, you can trade the foreign stock market (starting with the US market) via locally regulated Rakuten Trade starting 27th January 2022!

Rakuten Trade has been talking about the launch of foreign stock trading since last year, and I am excited that it is finally coming to fruition.

Why? Because Rakuten Trade will be, hands down, the most affordable Malaysia-regulated platform to trade the US stock market.

p

5 key highlights of Rakuten Trade Foreign Equity Trading account:

Here are 5 things we know so far about the soon-to-be-launched Rakuten Trade Foreign Equity Trading account:

  • Starting from 27/1/2022, Malaysians can trade both Malaysia & US stocks on locally-regulated Rakuten Trade Cash Upfront account, 100% online.
  • Commission from RM7 – RM100, which is the same fee structure as Rakuten Trade’s existing Cash Upfront account. This is the lowest yet among Malaysia-regulated platforms.
  • Use MYR to trade the US market at a competitive exchange rate*. (*To be tested)
  • No charges for corporate action for both Malaysia and US stock trading.
  • Rakuten Trade is planning to offer access to the Hong Kong market starting mid-2022.

Rakuten Trade: Lowest commission to trade the US market among Malaysia-regulated platforms

In the past, I am usually skeptical about any local platforms that try to offer access to the US stock market.

Even with players like MIDF Invest or FSMOne trying to disrupt the brokerage business over the past year, I still think the offerings are rather expensive.

However, it seems like Rakuten Trade has found a way to offer Malaysians an affordable way to invest in the US stock market, like finally!

Rakuten Trade Foreign Equity Trading Account Fees Comparison
Rakuten Trade Foreign Equity Trading Account Fees Comparison with MIDF Invest, FSMOne, and Maybank (as of 14/1/2022)

Comparing in trading value (RM) side-by-side, this is how much platform fee you’ll be paying using each Malaysia-regulated platform to buy US shares:

Rakuten Trade Foreign Equity Trading Account Fees Comparison
Rakuten Trade vs MIDF Invest, FSMOne, Maybank (as of 14/1/2022)

As you can see, for most scenarios, Rakuten Trade offers a more flexible and affordable fee structure for investors to invest in the US stock market without incurring heavy commissions.

For me, I think Rakuten Trade’s fee structure is game-changing among local brokers. Now, investors can access the US stock market at fraction of a cost, especially for beginner investors with small capital.


How to sign up for Rakuten Trade Foreign Equity Trading Account

From 27/1/2022 onwards, Rakuten Trade users can start trading the US stock market.

That said, you can already apply & activate your Foreign Trading account today! Even better, from 14/1/2022 – 26/1/2022, you can get 1 FREE US share when you activate your Foreign Trading account via Rakuten Trade!

Rakuten Trade Foreign Trading Promo

How to sign up for foreign trading if you are new to Rakuten Trade:

Step 1: Sign up for a Rakuten Trade Cash upfront account.

If you are new, you'll have to sign up for a Rakuten Trade Cash Upfront account.

Consider using my Rakuten Trade referral link by clicking the button below, and you'll get 500RT points (RM5) which can be used to offset your brokerage fee! 

Open a Rakuten Trade Account Today!

If you need help, click HERE for my step-by-step guide to open a Rakuten Trade account. 

Step 2: Get your Rakuten Trade account within 2 working hours

Your Rakuten Trade account will be activated within 2 working hours. 

Step 3: Log in to your Rakuten Trade account and apply for Foreign Stock Trading

Log in to your Rakuten Trade account either via the website or Rakuten Trade's iSpeed app. You can locate the Foreign Trading activation button easily within the Rakuten Trade platform.  

Activate Foreign Equity Trading Account on Rakuten Trade

Step 4: Submit your application for US stock trading

Spend 1 minute to share some info required to trade the US stock market. Then, submit your application. 

Activate Foreign Equity Trading Account on Rakuten Trade

Step 5: Your Foreign Trading account will be enabled within 2-3 working days


How to sign up for foreign trading if you are an existing Rakuten Trade user:

If you are an existing Rakuten Trade user, just follow Step 3 to Step 5 above and you'll be good to go!


Rakuten Trade Foreign Equity Trading - Review Coming Soon!

So, what do you think about Rakuten Trade’s soon-to-be-launched Foreign Trading account?

Personally, I am excited to try it out when it is launched, so definitely stay tuned for my full review!

Meanwhile, if you are keen to trade the US stock market, feel free to open a Rakuten Trade account and activate the Foreign Trading feature today, and win 1 FREE US Share while doing so!

Open a Rakuten Trade Account Today!


Disclaimer:

This post contains affiliate links, which afford No Money Lah a small referral (and in return, support this blog) if you sign up for an account using my referral link.


Financial planner malaysia

My 2-year experience with a Licensed Financial Planner in Malaysia

For 2 years, I’ve been engaging a licensed financial planner to advise me on my personal finances.

Personally, it has been a fruitful journey as my finances have improved significantly compared to where I was 2 years ago.

But what is a licensed financial planner? How exactly does a financial planner help in your finances?

In this post, I’d actually like to share my financial planning journey with you in 2021. Doing so, I think you’ll have a taste of what I’ve learned, and perhaps, find out if you need a financial planner (or not).

OK, let’s get started!

p

Quick recap: What is a financial planner

So, what is a licensed financial planner, and who is qualified to be called a licensed financial planner?

Essentially, a licensed financial planner has in-depth qualifications, namely:

  • Capital Market Service Representative License, issued by the Securities Commission (SC): To conduct licensed financial planning in Malaysia – as such, be called a ‘financial planner’.
  • Financial Adviser Representative (FAR) License, issued by Bank Negara Malaysia (BNM): Allows a financial planner to recommend insurance products from any insurance company.

On the other hand, the qualification of most insurance agents would stop at the Pre-Contract Examination for Insurance Agents (PCEIA) & Certificate Examination in Investment-linked Life Insurance (CEILI) papers. These are the papers that insurance agents have to take in order to start offering insurance solutions for one particular insurance company.

In essence, a financial planner offers a complete service in all aspects of personal finance relative to an insurance agent.

Financial Planner vs Insurance Agent
The difference between a financial planner and an insurance agent

How it works

Personally, I have been working with my financial planners – Stev and Catherine from Wealth Vantage Advisory (WVA) for 2 years now. WVA is a licensed financial advisory firm in Malaysia.

Engaging a financial planner is a process that involves 3 key stages: Fact-finding, Implementation, and Follow-Up Review Meetings. I’ll explain more about each process in the following section.

Financial Planning Flow
The flow and progress for both FFP and MFP packages - which happens in a span of 1 year.

Depending on your needs, there are 3 ways you can work with a licensed financial planner from WVA, namely:

  • Comprehensive Financial Health Check (FHC): You’ll go through a comprehensive fact-finding process with your financial planner. Then, you’ll be presented with analysis and report of your overall financial state with recommendations for improvement. 
  • Modular Financial Planning (MFP): You’ll get everything from the FHC above. PLUS, you can choose to focus on EITHER Investment/Insurance/Estate Planning and your financial planner will support you in the implementation for 1 full year. 
  • Full Financial Planning (FFP): You’ll get everything from the FHC. PLUS, your financial planner will support you in the implementation of ALL aspects of your personal finances (Investment + Insurance + Estate Planning) for 1 full year. 

For me, I’ve opted for the MFP package (investment) back in 2020. You can read about my journey and takeaways HERE.

As for 2021, I have opted for the FFP package. This is where my financial planner, Stev and Catherine guided me in all aspects of my finances (investment, insurance, estate planning).


My financial planning journey in 2021

Engagement/Fact-Finding phase (October 2020):

My FFP journey actually started back in October 2020 as I do my 2021 financial planning with Stev and Catherine.

This is where I discuss my goals, and update my latest financial details such as my existing insurance coverage, financial commitments, financial figures with my financial planner.

[Useful Tip]: Back when I engaged Stev and Catherine for the first time, I felt a little uncomfortable sharing my financial figures with them. But they have been very professional and treated my information with utmost privacy.


Implementation – Financial Report Presentation + Cashflow & Investment (December 2020):

Before the end of 2020, I was presented with my full financial report. This is a 20+ pages financial report that gives me an overview of my financial state in 2020 as well as action plans for 2021.

Financial Review with Financial Planner
There is no need for physical meetings nowadays. An engagement with financial planners can be done online.

 

I am also shown my Wealth Vantage Score, a visual gauge of my financial state, and target progress for the year:Wealth Vantage Score - financial planning malaysia With the details provided during our engagement session, Stev and Catherine are aware of my financial context. Hence, they are able to provide advice/action plans that are customized to my situation. Several key implementations that I have to make for 2021 include:

  • Investment: Rebalance investment assets to more equities (I was too heavy on REITs)
  • Tax: Contributing to PRS for tax relief
  • Insurance: Patch insurance coverage shortfall: I was given several choices on the best insurance packages to choose from
  • Cashflow & emergency fund: Streamlining emergency funds

Implementation – Insurance & Risk (March 2021):

This quarterly follow-up is mainly about insurance & risk management.

In the previous meetup, Stev has suggested a list of best-in-value insurance plans for my current phase in life:

Financial planning malaysia - insurance

 

I got to choose which insurance packages to go for. Ultimately, I opted for:

  • Life: AIA A-Life Protect Term Life Insurance 
  • Medical: AIA A-Life Link 2 medical card 
  • Critical Illness: AmMet Life Healthcare Secure 

All in all, my insurance coverage would cost me around RM3,600/year, translating to RM300/month. Given my life circumstances, I think this is a decent all-around insurance package. 

Working with financial planners like Stev is a great thing, as they are not tied to a single insurance company. As such, they can recommend products from different insurance companies, ensuring the best-in-value coverage for clients.


Implementation – Estate Planning (June 2021):

This quarterly follow-up is mainly about estate management. Stev gave me an overview of estate management – will writing, trust establishment etc.

This session gave me an in-depth understanding of planning for the people that we care for upon our demise.

However, I was too caught up with work so I was unable to implement my estate planning in 2021.

Will definitely follow through with my estate planning implementation and will write about it in 2022.


Quarterly & Annual review (September & October 2021)

Towards the 4th quarter of the year, it’s time for an in-depth annual review. Several key highlights of our annual review include:

  • Analyze growth and progress for 2021 – how much my net worth has grown.
  • Anticipated changes in commitments in 2022, if any.
  • Planning + goals for 2022 – Is my current financial routine (eg. Investments, insurance) matching up with my goals, and if any refinement is needed in 2022.
  • Action plan for 2022:
    • Stev guided me on tax optimization (eg. EPF & PRS contribution amount) in line with the newly released budget.
    • Also advised me on shifting some of my current investment funds to better ones.
    • EPF nomination (which I’ve been procrastinating on)
    • Setting up a will and/or trust in 2022
Wealth Vantage Financial Planning
Annual Review with Stev, my financial planner.

My takeaways from engaging a licensed financial planner

  1. A licensed financial planner gives you direction & clarity in all aspects of your finances

A financial planner can (and is qualified) to answer all your questions about money & finances.

  • How can you maximize your tax reliefs in line with Budget 2022?
  • How can you better organize your investments for inflation?
  • How much % of crypto should you have in your portfolio (according to your risk preference)?
  • How can you better plan for your first property purchase?
  • And literally anything money-related.

In other words, a financial planner can tell you how exactly you can organize your money in the most efficient way.

In my time writing about personal finance, I noticed many people tend to just emphasize on investment. However, personal finance is more than investing.

There are things like insurance, estate planning, to making necessary adjustments to your overall finances as you transition to a different phase in life.

If you are looking for guidance for one or all aspects of your finances – certainly speak to a licensed financial planner!

p

  1. What a licensed financial planner won’t do

A licensed financial planner should not be recommending products from only ONE company.

Since they are not tied to a single company, they are able to filter through the market and customize deals that suit you the best. This applies to insurance or investment products like unit trust.

In addition, a financial planner should not force you to buy/sign up for something that you are not comfortable with.

p

  1. A good routine helps make the best use of your time with a financial planner

Having a good financial routine will help make each meeting with your financial planner more efficient.

As an example, I always track my finances every month (eg. Expenses, Assets, Liability). So, prior to a meeting with Stev, I’ll always update him with my latest figures. Moreover, if I have any questions, I’ll always take note of them ahead of our meeting.

Doing so, Stev is always kept up-to-date with my financials and hence, able to give me to most accurate guidance according to my life context.

Essentially, think of your relationship with your financial planner like a student and coach. Let's say you sign up for a guitar class but do not practice outside of the class. Every session, your coach will have to go through the basics again because you cannot recall what you've learned the previous week.

However, if you can prepare ahead by practicing, each class will be more fruitful and you’ll reap more benefit out of your time.

The idea is the same when you engage a financial planner. It takes two hands to clap.


The most helpful things in my time engaging a licensed financial planner

  • Insurance

As much as I like doing research on my own personal finances, insurance is one aspect that I have a hard time researching.

The jargon in insurance can be complex and this makes it hard for me to compare insurance products.

Guidance from a licensed financial planner is greatly helpful as they are not tied to a single insurance company. As such, they are able to customize the best insurance plan to fit the client’s needs.

  • Tax optimization

As a self-employed, tax is one of the personal finance topics that I need more guidance in.

With the help of a financial planner, I get to make the best out of the tax reliefs offered in each budget announcement.

  • Estate planning

Estate planning such as will writing is also a topic that I am not entirely familiar with. With the help from Stev, I get in-depth knowledge on what to do


Should you engage a financial planner?

In the past, I used to think I can handle my finances all by myself. And hey, it used to be alright.

But with time, there are many aspects of my life that require my attention:

  • Managing my career as a self-employed.
  • Taking up responsibilities in the family.

Over time, I realized that I cannot handle everything. Engaging a financial planner for the past 2 years has allowed me to use my time to focus on things that really matter to me.

Are you in a position in life where you have too much on your plate? In this case, a financial planner can be a massive help to keep your finances in place.

Moreover, I am confident that a financial planner will add massive value to you if:

  • You have tried DIY your finances but still feel overwhelmed.
  • You want to prepare your finances for the next phase in life (eg. marriage, retirement), but not sure how.
  • You need help to organize your finances in place (investments, insurance, estate planning etc).

Yes, there are charges to engage a financial planner. But trust me, this will be an investment that’ll give you returns and peace of mind in multiple folds.


Verdict: Is a financial planner worth it?

In the past 2 years, I have received my financial planning package, complimentary from Wealth Vantage Advisory (WVA), a licensed financial advisory firm in Malaysia.

WVA offers 3 financial planning packages, namely:

  • Comprehensive Financial Health Check (FHC): RM300
  • Modular Financial Planning (MFP): RM1,000
  • Full Financial Planning (FFP): RM3,000

Recap:

  • FHC offers a comprehensive report on your financial state with action plans for improvement.
  • MFP is essentially FHC + your financial planner will support you in the implementation in ONE aspect of your finance (insurance, investment, estate planning) for 1 full year.
  • FFP is FHC + your financial planner will support you in the implementation of ALL aspects of your finance (insurance, investment, estate planning) for 1 full year.

Would I still sign up for a financial planner if I have to pay for the service?

For me, it is a solid yes.

The past 2 years have been life-changing as I dedicate my time and energy to build up my career as a self-employed. Without the guidance from Stev and Catherine in multiple aspects of my finances, I wouldn’t have the confidence to pursue my career wholeheartedly.

Yes, it is not the cheapest service in the world. But the value and professionalism that I gained from my financial planning journey have been one of the main reasons why I can pursue what’s important in life without having to hold back.

I am sure it’ll add massive value to many of you too.

More on my journey as I step into Year 3 of my financial planning journey. Talk soon!


Get Your First Financial Consultation Session Today – FREE OF CHARGE!

If you are keen to explore what a licensed financial planner can help in your finances, this is for you:

I am working together with Wealth Vantage Advisory to bring a FREE Financial Consultation Session to all No Money Lah’s readers!

When you sign up for this FREE consultation session, you will learn more about your overall financial state. Not only that, you can gauge if a Financial Planner is going to add value in the pursuit of your financial goals.

Regardless, it is 100% FREE and you have zero obligations to take up the service if it is not suitable for you. Plus, you are doing your finances a favor for the year to come!

You can sign up for your FREE financial consultation session by clicking on the button below.

Sign Up for Your FREE Consultation Session Here!


Disclaimers

This article is made possible through a collaboration with Wealth Vantage Advisory. Special thanks to Stev and the team for making this collaboration such an impactful one.

Wealth Vantage Advisory did not receive copy approval rights on this article – that means they are reading this article for the first time, right alongside you. 🙂

p.s. This post contains affiliate links, which afford No Money Lah a small referral if you sign up for any paid services.


CSOP iEdge S-REIT Leaders Index ETF

CSOP iEdge S-REIT Leaders Index ETF: Invest in this ETF for stable dividend yield!

Are you looking to invest for stable & reliable dividend yield? If yes, I'm sure you'll like this post - read on!

For dividend investors, REIT has always been a solid choice due to its nature of consistent dividend pay-outs and lower price swings relative to normal stocks.

In particular, Singapore REIT (SREIT) has always been well received by investors. Why?

Singapore’s attractive tax conditions (0% withholding tax on dividends), coupled with SREIT being one of the largest REIT markets in Asia Pacific make SREIT a favorite among investors’ portfolios.

SREIT Growth over the past years
SREIT has experienced an 11% compounded annual growth rate (CAGR) over the past decade.

What if there is a way for us to invest in all leading SREITs at once? Wouldn’t it be amazing?

In this post, let’s explore CSOP iEdge S-REIT Leaders Index ETF, a REIT Exchange-Traded Fund (ETF) that allows you to invest in all leading SREITs at once!

Before this, here are some related posts that you may want to read:

p

Highlights of CSOP iEdge S-REIT Leaders Index ETF

CSOP iEdge S-REIT Leaders Index ETF

  • CSOP iEdge S-REIT Leaders Index ETF is a Singapore-listed REIT ETF that tracks the iEdge S-REIT Leaders Index. (SGD Stock Code: SRT | USD Stock Code: SRU)
  • With SRT/SRU, investors get to invest in a basket of most liquid SREIT listed in the Singapore Stock Exchange (SGX), with consistent dividends and relatively low volatility.
  • CSOP iEdge S-REIT Leaders Index ETF is a solid choice for investors looking for stable & competitive dividend yield, as well as investors looking to hedge against inflation.

Recap: An ETF is an instrument that tracks the performance of an index. ETFs can be bought & sold just like usual shares in the stock market.

ETF is an amazing investment choice for beginners and experienced investors alike.
ETF is an amazing investment choice for beginners and experienced investors alike.

What is the iEdge S-REIT Leaders Index?

Launched in 2014, the iEdge S-REIT Leaders Index is an index established to measure the performance of the largest and most liquid REITs listed in the Singapore Stock Exchange (SGX).

To ensure that the REITs tracked by the index are the most liquid REITs, the iEdge S-REIT Leaders Index employs a liquidity-adjustment strategy.

Essentially, what this strategy does is it'll only capture SREITs with high investors’ interest, fund flows, and REITs that are most relevant to the latest sector rotation.

In other words, the REITs tracked by the iEdge S-REIT Leaders Index are always the most relevant REITs according to the market condition.

iEdge S-REIT Leaders Index Methodology
Unlike conventional market-cap weighting approach, iEdge S-REIT Leaders Index liquidity filter is more agile to shift in investors' interest & market condition.

As an example, with the ongoing pandemic, industrial REITs become an important part of the index (>40%), considering the strong market interest with REITs involved with logistics, warehousing, and manufacturing.

In short, when compared to the conventional market-cap weighting strategy in other ETFs, the iEdge S-REIT Leaders Index is more robust and versatile to shifts in market conditions.

iEdge S-REIT Leaders Index sector allocation
With the pandemic, industrial REITs that deal with logistics, manufacturing, and warehousing business are able to thrive.

iEdge S-REIT Leaders Index Dividend Yield & Performance

So, how did the iEdge S-REIT Leaders Index perform over the years?

From 2017 to 2021, the iEdge S-REIT Leaders Index has been generating consistent annual dividend yield of 4.6% - 5.8%. 

Furthermore, it is projected to generate 5.4% and 5.6% yield for 2022 and 2023 respectively. In other words, the yield can be a great hedge against rising inflation as well. 

iEdge S-REIT Leaders Index Dividend Yield (2017 - 2023)

When compared to other REIT indexes, the iEdge S-REIT Leaders Index recorded the highest 5-year annualized return of 8.37%. In addition, it also has the highest expected dividend yield of 5.4% in 2022, with relatively low volatility.

In other words, the iEdge S-REIT Leaders Index is one of the most competitive REIT indexes in the market that takes into account of volatility. 

iEdge S-REIT Leaders Index performance vs other REIT indexes


Invest in the CSOP iEdge S-REIT Leaders Index ETF (SGD: SRT/USD: SRU)

As for all indexes, we cannot invest directly in them. Instead, we can invest in an index via ETFs that track the performance of the index.

Similarly, we can invest in iEdge S-REIT Leaders Index via the CSOP iEdge S-REIT Leaders Index ETF. 

The CSOP iEdge S-REIT Leaders Index ETF is listed in the SGX on 18/11/2021, in SGD (ticker: SRT) and USD  (ticker: SRU) respectively:

p

 CSOP iEdge S-REIT Leaders Index ETF
TickerSRT (SGD), SRU (USD)
Unit Price (9/12/2021)SGD 0.976 | USD 0.716 (minimum transaction of 10 units)
Ongoing Expense Ratio~0.60% annually
Fund SizeSGD 114 million
Dividend DistributionSemi-annually (in SGD)
ETF RebalancingSemi-annually (March & September)
Replication ApproachReplication strategy

Advantages of investing in CSOP iEdge S-REIT Leaders Index ETF vs individual SREITs

The iEdge S-REIT Leaders Index displayed several advantages compared to investing in individual SREITs. Here are 3 of them:

Firstly, investors get to diversify their REIT exposure with a small capital instead of just one or two.

This is a capital-efficient way to invest in a diversified REIT portfolio.

Invest in a diversified reit portfolio through CSOP iEdge S-REIT Leaders Index ETF
Invest in a diversified REIT portfolio through CSOP iEdge S-REIT Leaders Index ETF

Secondly, by design, the iEdge S-REIT Leaders Index filters & rebalances according to the most liquid SREITs in the market.

In other words, investors can invest passively and do not have to worry about which REIT to invest in. 

Lastly, the iEdge S-REIT Leaders Index also shows more stability compared to individual SREITs. 

iEdge S-REIT Leaders Index low volatility vs other individual SREITs
iEdge S-REIT Leaders Index low volatility vs other individual SREITs

 


Top holdings of CSOP iEdge S-REIT Leaders Index ETF (SRT/SRU)

csop iEdge S-REIT Leaders Index ETFAs of the time of writing, there are 28 SREITs that are made up of the ETF's holdings. Each individual REIT holding is capped at 10%.

Here are the top and notable REIT holdings of SRT/SRU: 

  • Capitaland Integrated Commercial Trust (CICT) [10.04%]

CICT is the first and largest REIT listed on SGX with a market cap of SGD 13.5b as of August 2021.

CICT owns and invests in quality income-producing assets primarily used for commercial (including retail and/or office) purposes, located predominantly in Singapore.

Notable properties: Plaza Singapura, The Atrium @ Orchard

Plaza Singapura (CICT)
Plaza Singapura
  • Ascendas REIT [9.90%]

Ascendas REIT is Singapore’s first and largest listed business space and industrial REIT with a ~SGD15.9b portfolio.

Its portfolio is diversified across 4 segments including business spaces, logistics and distribution, industrial properties, and data centers.

By geographical diversification, Ascendas REIT invests in properties across Singapore, Australia, the US, and UK/Europe.

ascendas reit
Ascendas REIT's business is spread across logistics, business spaces, and more. (Source: Ascendas REIT website)
  • Mapletree Logistics Trust (MLT) [9.39%]

MLT is Singapore’s first Asia Pacific-focused logistics real estate investment trust with an asset under management of SGD10.7b as of Jun 2021.

MLT invests in a diversified portfolio of quality, well-located income-producing logistics real estate in Singapore, Hong Kong, China, Japan, South Korea, Australia, Malaysia, Vietnam, and India.

mapletree logistics trust geographical breakdown
Mapletree Logistics Trust business geographical breakdown (Source: MLT website)

p.s. Click HERE for the most updated REIT holdings of CSOP iEdge S-REIT Leaders Index ETF


Risks of CSOP iEdge S-REIT Leaders Index ETF

Similar to all REIT investments, there are several key risks that you need to take note of while investing in CSOP iEdge S-REIT Leaders Index ETF:

#1 Interest Rate Risk

Since REITs are real estate businesses that make use of loans for financing, swings in interest rate can impact REIT to a certain extent.

Generally, an increase in interest rate will increase the operating cost for REITs due to a hike in interest repayment. As a result, this will reduce the underlying profit of REITs. 

#2 Income Risk 

REITs are also susceptible to changing market conditions. As an example, hospitality REITs that own hotels may thrive during holiday seasons, but could take a blow in their revenue during non-peak days. 

Fortunately, CSOP iEdge S-REIT Leaders Index ETF copes with this by adjusting its REIT holdings (semi-annually) with the most liquid and relevant REITs, which captures investors' interest and fund flows. 


Who should invest in CSOP iEdge S-REIT Leaders Index ETF

For who - CSOP iEdge S-REIT Leaders Index ETF

  • For investors looking to invest for stable, and higher than average dividend yield.
  • Investors looking to hedge against inflation.
  • Investors looking for a capital-efficient way to invest in a diversified SREIT portfolio with exposure to quality local & global real estate.

My Recommended Broker to Invest in CSOP iEdge S-REIT Leaders Index ETF:

Use ProsperUs by CGS-CIMB to invest in SRT/SRU!The CSOP iEdge S-REIT Leaders Index ETF is not listed locally. Instead, it is being traded in the Singapore stock exchange in either SGD (ticker: SRT) or USD (ticker: SRU).

As such, you’ll need a reliable stock broker with access to the Singapore stock exchange in order to invest in this ETF.

If you need a reliable stock broker, I’d highly recommend ProperUs to you. ProsperUs is a regulated broker from CGS-CIMB, with global access to 30+ different stock exchanges (US, SG, HK, China, Japan, Malaysia, UK, Canada, and more!).

In addition, with ProsperUs, you get access to a variety of instruments such as stocks, ETFs, mutual funds, futures, options, FX, and CFD!

Check out my full review on ProsperUs HERE.

p.s. From today till 31/3/2022, key in my exclusive promo code ‘MONEY20’ while you register, and get a FREE SGD50 cash top-up & up to RM300 e-wallet credits when you open a ProsperUs account! More details and T&C HERE.

Use ProsperUs to invest in SRT/SRU


No Money Lah’s Verdict

As a whole, the CSOP iEdge S-REIT Leaders Index ETF is a great option for investors looking to invest for stable and higher-than-average yield.

Considering SREIT being one of the most established REIT market in Asia, investors can diversify into a portfolio of quality real estate even with a small capital.

Do you have any questions on the CSOP iEdge S-REIT Leaders Index ETF? Feel free to let me know your thoughts & questions in the comment section below!


About CSOP Asset Management

I first discovered the iEdge S-REIT Leaders Index through CSOP Asset Management (AM).

If you have been investing purely in the Malaysia or US market, it is likely that you have not heard of CSOP AM before. However, CSOP AM is huge in the China & Hong Kong market:

Established in 2008, CSOP AM is the first offshore entity established by a regulated Chinese asset manager with Hong Kong’s Securities & Futures Commission (SFC) type 1 (dealing in securities), type 4 (advising on securities) and type 9 (asset management) licenses.

With this background, CSOP AM manages the biggest renminbi (RMB) equity & fixed income ETF listed in offshore China.

In 2019, CSOP AM sets up their office in Singapore, with the goal to bring their expertise closer to Southeast Asia’s investors (psst… that’s us).


Disclaimer

The purpose of this post is purely for sharing and should NEVER be taken as a buy/sell recommendation. Please do your own research AND/OR reach out to a licensed financial planner before making any investment decision.


How to invest in the S&P500 index - Ireland-Domiciled ETF for non-US residents!

How to invest in the S&P500 Index for non-US residents (via Ireland-Domiciled ETFs)

Are you looking for a (simple) investment that has proven itself over the past few decades?

How about one that makes money 76% of the time over the past 30 years?

S&P500 annual returns over the span of 3 decades.
S&P500 annual return over the span of 3 decades. (Source: Macrotrends)

The S&P500 index is perhaps one of the best testaments for simple, yet practical investment that has withstood the test of time (AND financial crises, AND Covid-19).

But what exactly is the S&P500, and how can you (as a non-US resident) invest in the S&P500 index?

In this post, let’s explore how you can invest in the S&P500, and the things that you need to know before investing in it!

Before this, here are some related posts that you may want to read:

p

What is the S&P500 Index?

The S&P500 index is a stock market index that has been tracking the performance of the top 500 largest US-listed companies since 1957.

Just like how the KLCI and STI are used to measure the performance of the Malaysian and Singapore stock markets respectively, the S&P500 is commonly used as a proxy to the US stock market.

In fact, since the US stock market is so dominant, the S&P500 is sometimes considered as THE stock market.

So, what are the key companies within the S&P500 index?

Apple, Microsoft, Amazon, Meta (formerly Facebook), Alphabet, Berkshire Hathaway, and JP Morgan – just to name a few.

Essentially, by investing in the S&P500, you’ll get exposure to the finest companies in the US stock market.

But is there more to the S&P500? In the section below, let me show you some surprisingly impressive feats about the S&P500 index!

S&P500 Component Companies
S&P500 is made up of 500 top US-listed companies.

Time-tested Performance: Why invest in S&P500

In 2020, Warren Buffett stated that “for most people, the best thing to do is to own the S&P 500 index.”

Personally, I think there are solid reasons to this statement. Here are 2 indications of why the S&P500 is a great long-term investment:

#1 The S&P500 produced gains 76% of the time over the past 30 years.

Over the past 3 decades (1992-2021), the S&P500 has ended up higher in 23 out of 30 years. This makes up to gains 76% of the time*! 

That, ladies & gentlemen, is just you investing your money passively without having to manage them at all! Not sure 'bout you, but I think that's a fantastic deal relative to the effort required!

*Important: Past performance is NOT indicative of future performance.

S&P500 annual returns over the span of 3 decades.
S&P500 annual return over the span of 3 decades. (Source: Marcrotrends)

#2 The S&P500 has grown by 1019%* over the past 30 years. 

This translates to an 8.38% in annualized return (ie. 8.38% yearly COMPOUNDED return over the past 3 decades!)

*1992 to 2021

S&P500 30 year chart (1992 - 2021)
S&P500 30 year chart (1992 - 2021)

Now, if #1 and #2 aren’t good enough, consider this:

Over the past 3 decades, the S&P500 has survived the dot-com bubble (2000), global financial crisis (2008), the Covid-19 pandemic crisis (2020), many other smaller crises – and STILL grown by 1019%!

In other words, the S&P500 has not just overcome the biggest financial and health crises of the past decades, but still managed to thrive coming out of them.

If you are looking for a simple AND reliable way to grow your wealth, I am pretty sure the time and crises-tested S&P500 could find its place in your portfolio. 

The S&P500 thrived through crises and pandemic
The S&P500 thrived through crises and pandemic

How to invest in S&P500 Index as a non-US resident

As an investor, we cannot invest directly in the S&P500 index.

Instead, the easiest way to invest in the S&P500 index is through investing in the S&P500 Exchange-Traded Funds (ETFs).

An ETF is an instrument that mirrors the performance of an underlying index. Similar to stocks, ETFs are also traded in the stock market.

In other words, you can buy/sell ETFs just like how you buy or sell stocks.

Before we proceed, as a non-US resident, it is not viable for us to invest in US-listed ETFs for the long-term due to tax reasons. More on why and what you can do about it in the following section.

ETF is an amazing investment choice for beginners and experienced investors alike.
ETF is an amazing investment choice for beginners and experienced investors alike.

RELATED READ: Guide to ETF Investing


Withholding & estate tax for investing in the US stock market

In the US, there are many popular S&P500 ETFs, such as:

  • SPDR S&P 500 ETF (ticker: SPY)
  • iShares Core S&P 500 ETF (IVV)
  • Vanguard S&P 500 ETF (VOO)

These ETFs are especially popular among US investors as they track the performance of the S&P500 index closely.

However, it is not recommended for non-US residents (eg. investors from Malaysia or Singapore) to invest long-term in the US-listed S&P500 ETFs (eg. VOO, SPY, IVV).

Why?

  • Withholding Tax on Dividends

As countries without tax treaty with the US, non-US residents investing in the US stock market are taxed 30% on dividends received.

So, let’s say you received $100 in dividends, you’ll only end up getting $70 due to withholding tax.

This is certainly not ideal if we invest in US-listed stocks or ETFs that pay out dividends.

Check the list of countries with tax treaty with the US HERE.

  • Estate tax

There is also a 40% estate tax in the US for foreign investors.

So, let’s say I pass away with $1 million worth of stocks, $400k will go to the US government, and only $600k will be received by my appointed nominee.


Ireland-Domiciled ETFs: The best S&P500 ETFs for non-US residents

Well, does that mean we are not able to invest in the S&P500 after all?

Not exactly. There are ways to go around this:

The easiest way for non-US investors (eg. Malaysians, Singaporeans) to invest in the S&P500 index is through Ireland-Domiciled ETFs.

Why?

Because Ireland-Domiciled ETFs benefit from the US-Ireland tax treaty of only 15% withholding tax on dividends. This is significantly lesser compared to the 30% withholding tax of US-listed ETFs.

(a) How many Ireland -Domiciled S&P500 ETFs are there?

The following are 8 Ireland-Domiciled S&P500 ETFs are ETFs listed in the London Stock Exchange (LSE) that tracks the S&P500 index.

Don’t worry, let me simplify this table and tell you which S&P500 ETFs are the best among all:

Ireland-Domiciled S&P500 ETFs
Ireland-Domiciled S&P500 ETFs (click to enlarge)

In the table above, there 6 things that you need to pay attention to:

(1) Trading Currency:

Most ETFs can be bought either in GBP or USD. Personally, I’d go for USD-denominated ETFs as USD is still the go-to global currency.

(2) Expense Ratio:

ETF providers charge a small annual management fee for their ETFs. In this case, all ETFs have a very low expense ratio so the difference is negligible.

(3) Fund Size:

In general, an ETF with a larger size fund size is a good indicator of the ETF’s durability as well as its popularity. Larger ETFs can also make use of economies of scale to lower their costs.

So, ETFs like CSP1 and CSPX are the obvious winner here. That said, other ETFs are also fairly respectable in size (billions) so you’ll be in good place regardless of which S&P500 ETF you select.

(4) Dividend Handling:

There are 2 approaches on how these ETFs manage dividends:

  • Distributing: Your dividends are redistributed to you.
  • Accumulating: Your dividends are reinvested automatically.

Choosing to invest in either ETF is your personal preference. Personally, I’d go for Accumulating ETFs as I want my dividends to be re-invested automatically, so I can compound my returns more efficiently.

(5) Unit Price:

Some ETFs are larger in terms of per unit share price. As an example, CSPX is USD 400+/share while VUAA is USD 80+/share.

If your investment capital is small, ETFs with smaller per unit price like VUAA would provide you more flexibility to invest in the S&P500.

(6) Trading Volume:

Here’s something that you may not know - the trading volume of an ETF has a minimal indication of the ETF’s liquidity.

Rather, it is the trading volume of the underlying component companies that truly affect the liquidity of an ETF (for S&P500 it’d be companies such as Apple, Microsoft etc.)

Hence, it’s okay to not put too much weightage into the trading volume of an ETF in our decision-making process.


(b) Which is the best Ireland-Domiciled S&P500 ETF?

The best Ireland-Domiciled S&P500 ETFs
The best Ireland-Domiciled S&P500 ETFs (click to enlarge)

Considering all the key factors, personally, I think CSPX or VUAA are the best Ireland-Domiciled S&P500 ETFs among all. Here are why:

  • Both CSPX and VUAA are denominated in my preferred currency, USD.
  • Both CSPX and VUAA have a very minimal expense ratio of 0.07%/annum.
  • Both CSPX and VUAA will reinvest my dividends automatically (accumulating).
  • Both CSPX and VUAA use a full replication approach. Meaning, I’ll get the most accurate representation of the S&P500 index when I invest in either of them.
  • CSPX is the larger ETF compared to VUAA, but it has a larger per-unit price. This makes it less flexible to invest in it with a smaller capital.
  • On the other hand, VUAA is a smaller ETF. However, it has a smaller per unit price, which is easier for investors to invest with a small capital.

Regardless, I think either ETFs are great for you to gain exposure in the S&P500 index.


Recommended broker to invest in Ireland-Domiciled S&P500 ETFs

To invest in Ireland-Domiciled S&P500 ETF, you’ll need to have a broker with access to the exchange where the ETF is listed.

In this case, all the ETFs that we discussed are listed on the London Stock Exchange (LSE).

For me, I use ProsperUs by CGS-CIMB to invest in Ireland-Domiciled S&P500 ETFs listed in the LSE. In fact, ProsperUs gives investors access to 30+ exchanges in more than 8 countries! (US, Hong Kong, China, Japan, UK, Singapore, Malaysia, Europe, and more!)

Personally, I love how easy it is to use ProsperUs to invest and I am sure you’ll like the ease of use and efficient customer support too!

RELATED READ: ProsperUs by CGS-CIMB Review

Exclusive ProsperUs Referral Code – MONEY20

 

ProsperUS referral code

If you are thinking to give ProsperUs a try, here’s something exclusive to No Money Lah readers – you will not find this anywhere else!

From today till 31/3/2022, key in my exclusive promo code ‘MONEY20’ while you register, and get a FREE SGD50 cash top-up & up to RM300 e-wallet credits when you open a ProsperUs account:

RewardsHow to qualify
#1 One-time top up of SGD20 into your ProsperUS accountInitial funding of SGD500 within 30 days of your account opening. To qualify, you should not withdraw the SGD500 for at least 30 calendar days.
#2 A further top up of SGD30 into your ProsperUS accountExecute at least 3 trades by 31/5/2022
#3 Up to RM300 in Grab or T&G e-wallet credits RM120: Initial funding of SGD1000 within 30 days of your account opening + 3 trades by 31/5/2022.

RM180: Initial funding of SGD3000 within 30 days of your account opening + 3 trades by 31/5/2022.

RM300: Initial funding of SGD10,000 within 30 days of your account opening + 3 trades by 31/5/2022.

To qualify, you should not withdraw the initial funding for at least 30 calendar days.
Note: A deposit in other currencies of equivalent value will also qualify you for the rewards. eg. Initial funding of ~RM1600 or ~USD400 is equivalent to SGD500.

p.s. Please check for the latest exchange rate accordingly.

 

Click HERE to view the full T&C of this referral reward. Personally, I think this is a great deal if you are planning to open an account to start investing globally!

Open a ProsperUs Account Today!


No Money Lah's Verdict

So, what do you think? Isn't the S&P500 amazing, given how it has withstood the test of time and crises?

For me, I genuinely think that the S&P500 is a great long-term investment, be it as a standalone investment, or being part of a long-term investment portfolio.

Remember, if you want to invest in Ireland-Domiciled ETFs, be sure to check out ProsperUs by CGS-CIMB for global market access at a competitive price! 


Disclaimers

This article is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.

This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.


ETF investing guide for malaysians

Malaysian’s Guide to Invest in ETF

Say you’d want to start investing, but you have a few concerns below:

    1. You do not have much time and commitment to actively manage your investment.
    2. You are not familiar with reading financial reports from companies.
    3. You do not have a lot of capital to start investing.

If you belong to one or more of the descriptions above, learning about ETF WILL make your investing journey much easier and fruitful! Afterall, in my opinion, more Malaysians should certainly explore what ETF can offer in their investing journey.

p

What is an ETF?

Exchange-Traded Fund, or ETF, is an investment vehicle that tracks the performance of a specific basket of asset classes such as stocks, bonds, and commodities:

  • As an example, the CSPX or VUAA ETFs are ETFs that track the performance of the S&P 500 index. Since investors cannot invest in an index directly, investing in the CSPX or VUAA ETF allows investors to gain exposure to the S&P 500 index – ie. The performance of the 500 largest listed companies in the US.
    p
  • An ETF is traded just like any stock in the stock market. This means that if you have a stockbroker, you can buy and sell ETF on your own during market hours.
ETF is an amazing investment choice for beginners and experienced investors alike.
ETF is an amazing investment choice for beginners and experienced investors alike.

Why Invest in ETF?

ETF is an amazing investing instrument for new and experienced investors alike, for several key reasons below:

#1 Diversified Exposure even with limited capital (vs individual stocks)

Unlike owning the shares of an individual company, ETFs hold a basket of assets mainly with the goal of tracking the performance of an index.

By doing so, ETFs allow investors to gain diversified exposure to the market even with a small capital.

As an example, say, an investor has a strong conviction towards the US stock market. Instead of buying up individual shares of companies like Microsoft, Apple, and Amazon (which can be capital demanding), one can invest in the CSPX or VUAA ETF instead.

This is because the CSPX or VUAA are ETFs that track the S&P500 index.

So, with 1 unit share of the VUAA ETF (~USD85.58/share as of the time of writing, equivalent to about RM360), an investor can now gain exposure to a basket of top US top listed companies.

S&P500 Component Companies
Investors get diversified exposure by investing in the S&P500

p

#2 Passive in Nature – ie. Less Commitment (vs individual stocks)

Investing in individual companies is no easy task. Doing so requires active commitment from investors to keep up with the progress and financials of the particular company.

Let’s say if you are holding the shares of 20 individual companies. Assuming you are a (rare) responsible investor, then you’d always have to be aware of the financials and updates of the 20 companies – that’s a lot of work if you have a full-time work and family commitment!

With ETF, investors can take a more passive approach towards their investment portfolio. Reason being, ETFs track the performance of an index (eg. S&P 500, KLCI). By nature, an index already has a set of selection criteria in place - where only certain companies can become a component of an index.

Hence, on a consistent basis, the index will rebalance itself by removing or adding new companies that fulfill the criteria into the component of the index.

As such, investors that invest in ETFs can take a more passive approach in their investing journey (and enjoy life) instead of having to keep up with the financials of individual companies.

S&P 500 Index's Selection Criteria: Not all companies can become part of the index. This makes index a stock filter by design, which is very beginner-friendly. (Source: S&P Global)
S&P 500 Index's Selection Criteria: Not all companies can become part of the index. This makes the index a stock filter by design, which is very beginner-friendly. (Source: S&P Global)

p

#3 Competitive Cost (vs unit trust)

Generally, ETFs have low annual management fees when compared to unit trusts. This makes ETFs more affordable to invest in and maintain in the long run.


Different kinds of ETFs (+ Which one is for total beginners?)

An amazing thing about ETF is there are many types of ETFs in the market. Hence, depending on your conviction or interest, you can always find the suitable ETF investment for you in the market:

Types of ETF
Types of ETF

 

#1 Index ETF

An index ETF is an ETF that tracks the major index in the market (eg. S&P500, KLCI index).

An index ETF is the most well-known and easiest to understand ETF in the market. In my opinion, an index ETF that tracks a major index, is the most suitable for beginners to get started with.

A good example of an Index ETF is the iShares Core S&P 500 UCITS ETF (CSPX), or Vanguard S&P 500 UCITS ETF (VUAA). Both CSPX and VUAA track the S&P500 index, which reflects the performance of the 500 largest listed companies in the US.

More tips on things that you need to know while selecting an ETF later in this article.

p

#2 Commodity ETF

What if you want to have exposure to gold and/or silver in your portfolio – but have no interest to hold physical gold or silver bars at home?

A commodity ETF can do just that because it tracks the price of a specific underlying commodity, such as gold, silver, crude oil, and more.

Some examples are the TradePlus Shariah Gold Tracker (0828EA), SPDR Gold Shares ETF (GLD), and iShares Silver Trust (SLV).

p

#3 Industry ETF

Industry ETFs allow investors to gain exposure to a specific industry. It can be a broad-based industry diversification (eg. Tech sector), to a hyper-niche business segment exposure (eg. Work from home technologies).

Examples of industry ETFs are:

  • Vanguard Information Tech ETF (VGT) – Exposure to the return of stocks in the information technology sector.
  • CSOP Hang Seng TECH Index ETF (3033) – Exposure to the top 30 listed Chinese tech companies in the Hang Seng stock exchange.p
  • Direxion Work From Home ETF (WFH) – Exposure to companies that stand to benefit from an increasingly flexible work environment. (eg. Cloud Technologies, Cybersecurity, Remote Communications)

p

#4 Style ETF

Style ETFs make it easy for investors to track a particular investment style.

Investment-style ETFs include value and growth. This is a great choice for investors that want to do a specific style of investing, but do not have time to study specific companies.

Examples of style ETFs are:

  • TradePlus DWA Malaysia Momentum Tracker (MY-MOMETF) - Provide investors access to Malaysian stocks with high momentum movement in terms of pricing.
  • Vanguard S&P Mid-Cap 400 Value ETF (IVOV) – Provide exposure to the US’s S&P MidCap 400 Value Index, an index made up of value companies from the S&P 400.
  • Vanguard Growth ETF (VUG) – Provide exposure to US’s largest growth stocks (eg. Apple, Microsoft, Amazon).
    p

#5 Bond ETF

Bond ETFs open up the opportunity for investors to invest in low-risk fixed-income assets like government or corporate bonds – even with a small capital size.

Examples of Bond ETFs are:

  • ABF Malaysia Bond Index Fund (0800EA) - Provide exposure to Ringgit denominated government and quasi-government debt securities.
  • Schwab Intermediate-Term U.S. Treasury ETF (SCHR) – Provide exposure to the low-risk US Treasuries with remaining maturities of 3 to 10 years.

p

#6 Actively Managed ETF

Unlike most ETFs which are passively managed (ie. Tracks an index), Actively Managed ETFs are ETFs that are actively handled by fund managers.

These ETFs are designed with the goal to outperform an index, but they also come with higher management fees as a result.

Examples of Actively Managed ETFs are:

  • ARK Active ETFs from ARK Invest (ARKK, ARKQ, ARKW, ARKG, ARKF) – These are very popular ETFs among investors because they invest in highly innovative and future-proof industries.

p

#7 Leveraged & Inverse (L&I) ETF

L&I ETFs are unique and risky ETFs that allow investors to make the most out of an upside or downside move:

  • Leveraged ETF like the Kenanga KLCI Daily 2x Leveraged ETF (0834EA) allows investors to make/lose around 2x the impact for every point that the KLCI moves.
  • Inversed ETF like the Kenanga KLCI Daily (-1x) Inverse ETF (0835EA) allows investors to profit when the KLCI index goes down (and lose money when the KLCI index moves up).

For this, the L&I ETFs use leverage and derivative products (eg. Futures) to achieve their outcome/goal. Out of all the ETFs, I’d recommend novice/beginners to stay out of the L&I ETFs until they understand how leverage and derivative works.


What Do You Need to Know Before Investing in ETF?

#1 Must-Know: How does an ETF track its underlying index?

As you start to explore the world of ETFs, you’ll start to notice that there are many ETFs out there that track the same index. (eg. Both CSPX and VUAA ETFs track the S&P 500 index)

But why? Why are there so many ETFs that are doing the same thing in the market? We’ll explore several reasons, but one of them is due to the way these ETFs track their underlying index.

There are 3 major ways an ETF could track its underlying index:

ETFs' index tracking strategies explained.
ETFs' index tracking strategies explained.

a. Full/Physical Replication Strategy:

An ETF with a full replication strategy directly holds all the securities of its underlying index. This means that if an index has a 20% weightage in Apple, then the ETF will hold an equal proportion of Apple shares in its portfolio.

As a result, this transparent approach ensures that the ETF tracks the performance of the index as closely as possible. However, ETFs with a full replication strategy would normally incur slightly higher fees.

p

b. Representative Sampling Strategy

An ETF with representative sampling strategy creates a portfolio using a limited number of securities to replicate the characteristics of the index.

This approach is normally used due to taxation reasons, or when there’s limited liquidity in individual companies, making it hard for a full replication.

Compared to a full replication ETF, a representative sampling ETF tend to have a bigger margin of tracking error to its underlying index.

That said, the fees involved are usually more affordable too.  

p

c. Synthetical Replication Strategy

Synthetic ETFs are handy when it is hard to directly gain access to the securities of a specific market. (eg. Developing countries’ stock market)

Instead of owning company shares directly, Synthetic ETFs use derivatives such as swap to track their underlying index.  The benefits from this are (1) an effective tracking of the underlying index, and (2) the cost of investing in them is also lower.

However, without going too technical, Synthetic ETFs are relatively riskier than the other ETFs mentioned above due to counterparty and derivative risks.


#2 Must-Know: Fees & Expenses (Expense Ratio)

While investing in ETFs, you have to be aware that there will be an additional annual fee involved aside from your usual brokerage fees and stamp duty while transacting in the stock market.

This fee is what we call an Expense Ratio. Usually expressed as a percentage (%), the expense ratio is a combination of management & operational fee required to maintain and rebalance the ETF.

That said, the expense ratio of ETF (0.05% - 1.00%) is usually lower compared to unit trusts (0.50% - 2.00%). Reason being, most ETFs are passively managed - ie. They track the index, hence there is no need for the fund manager to actively research or analyze stocks.

a. Another thing you need to know is how ETFs expense ratio is deducted:

As an example, let’s say an ETF has an annual expense ratio of 0.30. This means the ETF manager would deduct 0.30% from the ETF’s assets on an annual basis.

In other words, if the ETF’s total return during a year is 10%, then the net return for the investors would be 9.70% (or $3 for every $1,000 invested).

p

b. ETF Fees The lower the better

ETFs with the lowest expense ratio are not always the best ETF to buy. It is crucial for you to compare apples-to-apples.

For example, make sure you are comparing the ETF that tracks the same index. Also, do take note of the replication strategy used – a full replication ETF usually has a higher expense ratio compared to an ETF with representative sampling strategy.


#3 Must-Know: Read the ETF’s factsheet/prospectus before you invest

How can you find out if which replication strategy an ETF is using? Or what’s the expense ratio of the ETF? How about the latest stock holdings of the ETF?

To do so, the most straightforward way is to go to the ETF’s official website and download the ETF’s factsheet and prospectus.

A sample ETF factsheet breakdown shows us the key details of an ETF.
A sample ETF factsheet breakdown shows us the key details of an ETF.

How to Invest in ETF?

Method 1: Investing on your own

Investing in ETF requires you to have a stock brokerage account, because you can buy and sell ETFs in the stock market like any other listed company.

For Malaysia-listed ETFs, I’d recommend Rakuten Trade. Check out my full review on Rakuten Trade HERE.

Click photo to check out my Rakuten Trade Review
Click on photo to check out my review on Rakuten Trade.

For overseas-listed ETFs (eg. US, SG, HK), my go-to broker would be Tiger Brokers. Check out my full review on Tiger Brokers HERE

Click on photo to check out my review on Tiger Brokers.
Click on photo to check out my review on Tiger Brokers.

As for overseas-listed ETFs in the UK and Europe (eg. Ireland-Domiciled ETFs), I'd be using ProperUs from CGS-CIMB. Check out my full review on ProsperUs HERE

ProsperUs by CGS-CIMB Review

STEP-BY-STEP: How to invest in your first overseas stock via Tiger Brokers?

STEP-BY-STEP: How to invest in your first Malaysian stock via Rakuten Trade?


Method 2: Investing passively via Robo-Advisors

If you are tight on time, or are not interested to choose your own ETFs, then opting for robo-advisors like StashAway, Syfe, and Wahed are great investment alternatives.

Generally, robo-advisors invest utilize ETFs to help you construct your investment portfolio based on your risk profile. The good thing is once you set up everything then you can just deposit and let the platform does the investment on your behalf. The downside is you do not have much say over which ETF to buy after setting your initial risk profile.

StashAway is my go-to reliable robo-advisor. Click on photo for my full StashAway Review.
StashAway is my go-to reliable robo-advisor. Click on photo for my full StashAway Review.

READ: Wahed Robo-Advisor Review

READ: Syfe Robo-Advisor Review


Getting Started: Investing in Malaysia-listed ETFs

If you are just getting started with ETF investing, or are thinking to invest on a consistent basis, here's a list of ETFs to get you started:

At the moment, there are 20 ETFs listed in the Malaysian stock market. These ETFs allow investors to diversify to not just local stocks, but also foreign stock markets (US, China, ASEAN), as well as commodities like gold. For more information on Malaysian listed ETFs, click HERE

That said, for starters, consider finding out more on:


Getting Started: Investing in overseas-listed ETFs

There are hundreds and thousands of ETFs all over the world to choose from, and it can be overwhelming especially for new investors.

Hence, if you are new, I'd suggest starting out with index ETFs, such as ones that track the S&P500 index. Once you are more experienced, you can consider some other types of ETFs.


Who Should Invest in ETF?

  • New/novice investors looking to build a long-term investing routine, such as investing on a monthly basis. Index ETFs such as the CSPX or VUAA (Ireland-Domiciled S&P500 ETFs) are a great start.
    p
  • Investors that are bullish towards certain sectors in the market can look to Industry ETF to add exposure to their portfolio. (eg. Tech sector ETFs – VGT, QQQ, 3033)
    p
  • Investors with time constraints and would like to invest passively should definitely consider ETFs over individual stocks.
    p
  • Investors with a small investment capital can look to diversify their investments via ETF.

No Money Lah’s Verdict

So here you go! If you are totally new and would like to start investing, I hope this article has been helpful!

In my opinion, new investors should absolutely consider ETF (especially major index ETFs) as it is a great solution for investors to get diversified exposure to the investing world at a small capital.

Are you planning to invest in ETFs soon? Or if any, do you have any questions about ETF?

Feel free to let me know in the comment section below!


Disclaimers

This article is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.

This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.


ProsperUS FUNDING AND WITHDRAWAL GUIDE

ProsperUs by CGS-CIMB: Deposit & Withdrawal Guide

As a global broker from CGS-CIMB, ProsperUs is one of the most flexible brokers around that offers investors access to different markets and instruments.

In fact, it is my go-to broker to gain access to markets around the globe. As an example, I personally use ProsperUs to gain access to UK-listed ETFs. 

In this guide, we’ll see how you can fund and withdraw from your ProsperUs account:

Before this, here are some related posts that you may want to read:

p

Funding your ProsperUs account (foreign currencies)

As a whole, there are 2 ways for you to fund your ProsperUs account if you are investing or trading the foreign markets:

Method 1: Foreign Telegraphic Transfer (FTT) through a local bank account (Not Recommended)

The first method is to fund your ProsperUs account via FTT through local banks. That said, I do not recommend this method due to expensive intermediary banking fees (~SGD20/USD30, or more) per transfer.

Step 1: Log in to your ProsperUs account > Select ‘Manage Funds’ > Select ‘Deposit’

ProsperUS Deposit funds

Step 2: Select (i) the currency that you wish to deposit in & (ii) ‘Telegraphic Transfer (TT)’ as Payment Type.

At the same time, key in the amount that you want to deposit.

ProsperUS Funding via FTT
You’ll also get the bank details on where to transfer your deposits.

ProsperUS Funding

Step 3: Do the remittance from your bank via FTT.

Using details from Step 2, log in to your local bank account and initiate a Foreign Telegraphic Transfer (FTT). Please note that you have to transfer the funds using a bank account under your own name.

Upon successful FTT transfer, download the transfer receipt. In this receipt, you’ll get a reference number from your bank for the transfer. Keep the receipt and reference number for Step 4.

ProsperUS Funding: Reference ID provided by local banks
ProsperUS Funding: Reference ID provided by local banks

Step 4: Input the last 5 characters of your transaction reference number, and upload the screenshot/receipt of your transfer.

Then, Click ‘Next’

ProperUS Funding: Key in reference number & upload receipt of transaction
ProperUS Funding: Key in reference number & upload receipt of transaction

That’s it! If your deposit is successful, you’ll receive an email within 12 working hours and you can start investing/trading.

--

Note: For all FTT transfers, ProsperUs does not charge for the whole funding process. However, our local bank’s appointed intermediary will be charging a clearance fee (varies according to banks).

  • As an example, the total cost for an FTT transfer via Maybank is (1) Standard FTT fee of RM10 + (2) Clearance fee of ~SGD20 (SGD transfer)/~$30 (USD transfer). Again, this is NOT a fee from ProsperUs but a clearance fee charged by the banks.
  • As you can see, this is the reason why I do not recommend funding your ProsperUs account (or any legit foreign brokers, in this case) via local FTT.

Instead, I’d recommend for you to consider using a Singapore bank account to fund your ProsperUs account (Method 2).


Method 2: Fund your ProsperUs account via a Singapore bank account (CIMB SG)

READ: Guide - How to open a Singapore bank account online!

Funding your ProsperUs account via a Singapore bank account would be my recommended funding method. Reason being, it is faster and there are no clearance charges involved for SGD transfers.

If you are serious about investing in the global market, I’d strongly suggest you to open an SG bank account. For Malaysians, we can open an SG bank account 100% online via CIMB SG.

Step 1: Log in to your ProsperUs account > Select ‘Manage Funds’ > Select ‘Deposit’

ProsperUS Deposit funds

Step 2: Select SGD as your funding currency, and ‘FAST’ as payment type.

You’ll get the bank details and instructions to make the transfer.

ProsperUS Funding via CIMB SG

Step 3: Log in to your CIMB SG account > ‘Local Transfer’ > ‘To Other Bank’ > ‘Via FAST’

Under ‘Transfer To’, select The Hongkong and Shanghai Banking Corp. Please note that you have to transfer the funds using a Singapore bank account under your own name.

ProsperUS Funding via CIMB SG

Step 4: Key in details of the transfer.

Remember to mention your account number under ‘Message to Recipient’ or in the ‘Remarks’ section.

That’s it! If your deposit is successful, it’ll be reflected in your ProsperUs account within the same business day (for transactions done before 5pm), or the next business day for transactions after 5pm.

ProsperUS Funding via CIMB SG


Funding your ProsperUs account (MYR)

As a global broker, ProsperUs also provides users access to the Malaysian market. As such, you can also fund and withdraw MYR easily on ProsperUs.

The limitation is, MYR can only be used to trade Bursa Malaysia, but not other markets. As a restricted currency, we will not be able to exchange MYR to other currencies (eg. SGD/USD/HKD/EUR) within ProsperUs as well.

Step 1: If this is your first deposit in MYR, request for an MYR currency account by writing to ProsperUs (‘Help’ > ‘Contact Us’ > ‘Submit an enquiry’).

It’ll usually be activated within 1 business day.

Email Template to ProsperUs: “Can you activate my MYR currency account?”

ProsperUS MYR Currency Acount

Step 2: Log in to your ProsperUs account > Select ‘Manage Funds’ > Select ‘Deposit’

ProsperUS Deposit funds

Step 3a: Select MYR as your funding currency, and ‘Telegraphic Transfer/Bank Transfer’ as payment type.

ProsperUS Funding MYR

Step 3b: You’ll get the bank details and instructions to make your MYR transfer.

Use the details to make a normal bank transfer to ProsperUs via your local bank account. Since this is a normal bank transfer and not a Foreign Telegraphic Transfer (FTT), there are no fees or charges involved to deposit MYR.

ProsperUS Funding MYR

Step 4: Remember to key in the last 5 characters of your reference number + upload a screenshot of the transfer to complete the process.  

ProsperUS Funding: Reference ID provided by local banks
ProsperUS Funding: Reference ID provided by local banks

Withdrawal from your ProsperUs account 

There are 3 main ways to withdraw from your ProsperUs account:

Method 1: Direct withdrawal to a local bank account via Telegraphic Transfer (TT)

The first withdrawal method is via Telegraphic Transfer (TT) from ProsperUs to your local bank account.

I do not recommend this method as it’ll usually take longer. Moreover, there will be a handling fee of SGD30 for withdrawal to non-SG banks, as well clearance charges from our local bank:

  • Handling fee: SGD30
  • FX spread + Intermediary clearance fee from our local bank

As you can see, this is an expensive withdrawal method and I highly recommend you to use a Singapore bank account (Method 2) for withdrawal instead.


Method 2: Withdrawal of SGD from ProsperUs to a Singapore bank account (CIMB SG)

Withdrawal from ProsperUs is best done through a Singapore bank account as it is faster (within the same day). Furthermore, there are no charges on withdrawal in SGD.

Step 1: Log in to ProsperUs > Select ‘Add bank account’ if this is your first withdrawal attempt.

Otherwise, you can skip to Step 4.

ProsperUS Withdrawal - Add bank account

Step 2a: Key in the details of your CIMB SG account

Step 2b: As proof that you are withdrawing to your own account, you are required to upload your CIMB SG bank statement as well.

Log in to your CIMB SG account > 'E-Statement' > 'Deposits' > 'View Online Statements' > Download the latest statement and upload it on ProsperUs

ProsperUS Withdrawal - Add bank account

Step 3: Wait for ProsperUs to verify your bank account.

It’ll take about 1 to 2 business days for verification.

ProsperUS Withdrawal - Verification

Step 4: Under ‘Manage Funds’, Select ‘Withdraw’

Key in the amount of withdrawal and select the bank account to withdraw to. Then, submit your withdrawal.

ProsperUS Withdrawal via CIMB SG

Step 5: That’s it! Your withdrawal should be processed within 1 to 2 business days.

ProsperUS Withdrawal notification


Method 3: Withdrawal of MYR from ProsperUs to a Malaysia bank account

The way to withdraw MYR back to your local bank account is similar to Method 2 above. 

The difference here is you'd have to add your Malaysia bank account in Step 1-3 so you can withdraw your MYR to that account.

There are no fees involved for MYR withdrawal to your local bank account.


Exchanging SGD to other currencies in ProsperUs (and vice versa)

Let’s say you deposit your funds in SGD. Now, you want to use USD to invest in the US market, or EUR to invest in the European markets.

There are 2 ways you can go around this:

#1 Easiest way: ProsperUs will automatically exchange your SGD to USD when you execute your transaction.

As such, FX rates of the day will be taken during the exchange.

ProsperUS: Automatic currency exchange while taking a trade
ProsperUS: Automatic currency exchange while taking a trade

#2 You can also exchange your SGD to USD (or other currencies) ahead of taking a trade:

  • Step 1: Request for a USD currency account by writing to ProsperUs (‘Help’ > ‘Contact Us’ > ‘Submit an enquiry’). It’ll usually be activated within 1 business day.

Email Template to ProsperUs: "Can you activate my USD currency account?”

ProsperUS USD Currency Acount

  • Step 2: Go to Boost > ‘Account’ > ‘Deposit & transfers’ > ‘Sub-account Transfer’ and perform the currency exchange.

As such, FX rates of the day will be taken during the exchange.

exchange currency in Boost by ProsperUS


Exclusive ProsperUs Referral Code – MONEY20

ProsperUS referral code

 

Here’s a reward exclusive to No Money Lah readers – you will not find this anywhere else!

From today till 31/3/2022, key in my exclusive promo code ‘MONEY20’ while you register, and get a FREE SGD50 top up & up to RM300 e-wallet credits when you open a ProsperUs account:

RewardsHow to qualify
#1 One-time top up of SGD20 into your ProsperUS accountInitial funding of SGD500 within 30 days of your account opening. To qualify, you should not withdraw the SGD500 for at least 30 calendar days.
#2 A further top up of SGD30 into your ProsperUS accountExecute at least 3 trades by 31/5/2022
#3 Up to RM300 in Grab or T&G e-wallet credits RM120: Initial funding of SGD1000 within 30 days of your account opening + 3 trades by 31/5/2022.

RM180: Initial funding of SGD3000 within 30 days of your account opening + 3 trades by 31/5/2022.

RM300: Initial funding of SGD10,000 within 30 days of your account opening + 3 trades by 31/5/2022.

To qualify, you should not withdraw the initial funding for at least 30 calendar days.
Note: A deposit in other currencies of equivalent value will also qualify you for the rewards. eg. Initial funding of ~RM1600 or ~USD400 is equivalent to SGD500.

p.s. Please check for the latest exchange rate accordingly.


Click HERE to view the full T&C of this referral reward. Personally, I think this is a great deal if you are planning to open an account to start investing globally!

Open a ProsperUs Account Today!


Disclaimers:

Past return is not indicative of future performance.

This post may contain affiliate links/codes that afford No Money Lah a small amount of referral (and help support the blog) should you sign up through my referral code.


ProsperUS Review

ProsperUs by CGS-CIMB Review: One account to invest globally!

As an investor, the more markets and instruments that we have access to, the easier it is for us to participate in various market opportunities.

To do so, we need a broker that offers different markets, and, ideally, a brand that we all recognize.

Is there such a broker?

In this week’s post, let’s look ProsperUs by CGS-CIMB, a broker with one of the most complete offerings for investors!

Before this, here are some related posts that you may want to read:

p

ProsperUs by CGS-CIMB Highlights

  • ProsperUs is a brokerage service offered by CGS-CIMB (a joint venture of CIMB), a brand that many of us are familiar with.
  • ProsperUs offers access to a huge list of markets, from the US, HK, China, Singapore, Australia, Canada, Germany, Europe, UK, Japan & Malaysia.
  • In addition, ProsperUs users also gain access to a huge variety of products/instruments (stocks, bonds, ETFs, mutual funds, CFD, FX, futures, and options) at a competitive fee.

ProsperUS by CGS-CIMB


How is ProsperUs regulated + Safety of Funds

Being an offering from an established brand, ProsperUs is a well-regulated broker.

ProsperUs is regulated by the Monetary Authority of Singapore (MAS), with a Capital Markets Services License to operate a legal brokerage business.

This ensures ProsperUs is operating under the best practices and guidelines set by the Singaporean authorities.

In addition, ProsperUs takes the security of funds seriously. All users’ funds and assets (eg. Shares) are held in a trust account that is separate from ProsperUs’ business assets.

In other words, ProsperUs will not have access to your funds and assets, ensuring clear transparency to avoid fraud. This also ensures that if something happens to ProsperUs (eg. Bankruptcy), your funds & assets will not be affected.


Access to a huge selection of Products & Markets

You name it, you get it.

With one ProsperUs account, you get instant access to different markets and asset classes over a huge selection of countries.

As a start, with a ProsperUs account, you’ll get access to major markets, including:

  • North America: US, Canada
  • Asia: Malaysia, Singapore, Hong Kong, China, Japan, Australia
  • Europe & UK

Furthermore, ProsperUs offers a huge selection of instruments to invest or trade with, namely:

  • Stocks
  • Bonds
  • Exchange-Traded Funds (ETFs)
  • Mutual Funds
  • Contract For Difference (CFD)
  • Forex (FX)
  • Futures
  • Options

With this huge line of offerings, ProsperUs can certainly satisfy the needs of most investors and traders.

One ProsperUS account to access the global markets.
One ProsperUS account to access the global markets.

ProsperUs fees & commission

As for commissions/fees, ProsperUs offers 3 different fee tiers, namely:

  • Rookie: SGD19,999 and below
  • All-Star: SGD 20,000 – 50,000
  • Hall of Fame: SGD50,001 and above

Below, I’ll list the commissions charged for equities (stocks and ETFs) in all the markets offered by ProsperUs:

[Update January 2022] From 2022 onwards, ProsperUs has updated their pricing with minimum fee structure for all exchanges except for the US and Singapore stock market. 

ProsperUS commission for the Canada & US stock market.
ProsperUs commission for the Canada & US stock market.

 

ProsperUS commission for the Asian stock market.
ProsperUs commission for the Asian stock market.

 

ProsperUS commission for the UK & Europe stock market.
ProsperUs commission for the UK & Europe stock market.

In terms of fees, I think ProsperUs' commissions are highly competitive for investors looking to invest in the Singapore stock market.

As for the US market, I think the USD 5 flat commission is decent. Compared to what local brokers are charging for the US market, ProsperUs' fee is an absolute steal. 

In addition, ProsperUs also provide access to instruments such as Bonds, Mutual Funds, Futures, Options, CFDs, and Forex (FX). To check out ProsperUs’ full pricing list, click HERE.


Features (Boost and Build)

An interesting feature of ProsperUs is there are 2 different interfaces that you can choose from depending on whether you are investing or trading.

ProsperUS - Build & Boost

For investing, there is Build where everything is designed for the essentials of longer-term investing.

Through Build, you can easily search and filter for trade ideas not just in stocks, but also in ETFs, bonds, and mutual funds.

Build from ProsperUS: Easily filter for stocks according to your criteria
Build by ProsperUs: Easily filter for investments according to your criteria

 

Build by ProsperUS: Explore investment ideas easily.
Build by ProsperUs: Explore investment ideas easily.

Taking a position is also simple and straightforward.

Taking a position on Build
Taking a position on Build

As someone using ProsperUs to invest for the long-term, I think Build is really simple and straightforward to use. There is a very minimal learning curve and I believe most people would be able to find what they are looking for easily.

As for trading, there is Boost where it provides a slicker interface designed for quick trading actions and activities.

Through Boost, you get a more sophisticated interface for charting and execution compared to Build.

That said, since I do not take short-term trades on ProsperUs, I’ll have to reserve my opinion in a more detailed walkthrough and guide for Boost in the future.

Boost by ProsperUS
The Boost interface is designed for quick trading action and execution.

Customer Support

ProsperUs’ customer support is decent too.

If you have any questions, you can always submit an inquiry via email form when you are logged in (Help > Contact Us) or via [email protected].

From personal experience, all my inquiries got answered within 1 working day.

ProsperUS has decent customer support
Get help for your inquiries under 'Help' > 'Contact Us'

What I like about ProsperUs

As a whole, coming from an established and familiar brand (CGS-CIMB), I think investors and traders will appreciate the flexibility and huge access that ProsperUs has to offer.

  • One account to access all the markets:

Firstly, ProsperUs offers access to the global market and a huge variety of instruments.

From stocks, bonds, and ETFs, to derivatives like CFD, Futures, FX, and options, you can literally explore different market opportunities with just one single account – no hassle!

  • Decent commission structure:

If you are troubled by the expensive fees from local brokers to invest in the foreign market, ProsperUs will be a much more affordable choice, especially to invest in the US and Singapore stock market.

  • User-friendly:

Even with all the offerings, ProsperUs’ platform is especially easy to navigate around. The learning curve is minimal and beginners will be able to find what they need easily.


What can be improved

  • Live chat for Customer Inquiries

While the existing customer support channel is decent, but it'd be even better if ProsperUs has more options for customers to reach out to them.

Personally, I think it’d be great if there is a live chat feature available to resolve customers’ inquiries.


Who should open a ProsperUs account?  

Given the access to a huge variety of markets and instruments, ProsperUS is most likely going satisfy the needs of most investors. To be more specific, ProsperUs is suitable for:

  • Investors looking to invest in different markets and instruments with the convenience of one single account.
  • Investors that want their broker to be from a recognizable brand (CGS-CIMB) and regulated by proper authorities (MAS).
  • Investors looking to invest in certain markets that are not offered by many other brokers.  As an example, ETF investors (like myself) looking to invest in S&P500 ETF (eg. CSPX, VUAA) listed in the London Stock Exchange instead of the ones listed in the US due to tax reasons.
  • Investors/traders that are looking to explore instruments aside from the usual stocks and ETFs. ProsperUs also offer instruments like unit trust, CFD, FX, options, and futures for more sophisticated investing or trading needs.

Exclusive ProsperUs Referral Code – MONEY20

 

ProsperUS referral code

Here’s a reward exclusive to No Money Lah readers – you will not find this anywhere else!

From today till 31/3/2022, key in my exclusive promo code ‘MONEY20’ while you register, and get a FREE SGD50 cash top-up & up to RM300 e-wallet credits when you open a ProsperUs account:

RewardsHow to qualify
#1 One-time top up of SGD20 into your ProsperUS accountInitial funding of SGD500 within 30 days of your account opening. To qualify, you should not withdraw the SGD500 for at least 30 calendar days.
#2 A further top up of SGD30 into your ProsperUS accountExecute at least 3 trades by 31/5/2022
#3 Up to RM300 in Grab or T&G e-wallet credits RM120: Initial funding of SGD1000 within 30 days of your account opening + 3 trades by 31/5/2022.

RM180: Initial funding of SGD3000 within 30 days of your account opening + 3 trades by 31/5/2022.

RM300: Initial funding of SGD10,000 within 30 days of your account opening + 3 trades by 31/5/2022.

To qualify, you should not withdraw the initial funding for at least 30 calendar days.
Note: A deposit in other currencies of equivalent value will also qualify you for the rewards. eg. Initial funding of ~RM1600 or ~USD400 is equivalent to SGD500.

p.s. Please check for the latest exchange rate accordingly.


Click HERE to view the full T&C of this referral reward. Personally, I think this is a great deal if you are planning to open an account to start investing globally!

Open a ProsperUs Account Today!


Eligibility + How to open a ProsperUs account

Anyone aged 18 years old and above can open a ProsperUs account. 

That said, a quick note if you are between 18 to 20 years old:

For this age group, you’ll be classified under ProsperUs’ Young Investors Segment. Essentially, after you complete the steps below, you are also required to fill in a short additional form that’ll be sent to you via email & be given a walkthrough on the risks involved by the ProsperUs team.

So, here are the documents/details you’ll need to sign up for a ProsperUs account:

  1. IC/National ID
  2. Tax Identification Number (TIN), if you have one.
  3. Utility or telco bill as proof of residency

Step 1: Sign up for a ProsperUs account

Click the button below to sign up for your ProsperUs account. Similarly, you can install the ProsperUs app in Google Playstore or App Store. 

Open a ProsperUs Account Today!

Step 2: Select your country of residence & citizenship. This is where you can key in promo code 'MONEY20' for exclusive rewards.

ProsperUS Account Opening
Insert referral code MONEY20 for exclusive account-opening rewards!

Step 3: Key in your personal & employment details.

For the currency to invest in, select SGD for the ease of funding later. (p.s. You can always open a USD currency account later by writing an email request to ProsperUs)

ProsperUS Account Opening

Step 4: Key in your tax details.

Tax Identification Number (TIN) is your LHDN tax number. Let's say you are still studying and do not have a TIN, select ‘YES’ as well, and key in your IC number/National ID instead.

ProsperUS Account Opening
ProsperUS Account Opening

Step 5: Investment Product Experience

Fill in your education background, investment objective, and risk appetite. Based on this information, you’ll be given a list of products that you'll get exposure to.

Generally, instruments like futures, FX, and options are more complex and require you to have a certain educational background or investing experience.

ProsperUS Account Opening
ProsperUS Account Opening

Step 6: Agree to T&C and upload documents (IC & proof of residency such as Utility or telco bill)

ProsperUS Account Opening

Step 7: Create your user login details

Upon successful registration, you'll be notified to create your login username & password.

ProsperUS account activated
Create your login username & password

Step 8: Fill in W-8BEN Form to access the US stock market

*W-8Ben form: Filling in the W-8 Form is a requirement by the US Inland Revenue Service for account holders to declare that the beneficiary owner of the amount received from US sources is not of US origin. For investors who want to trade the US markets, they will need to complete this form.

Log in to your newly created ProsperUs account. You'll be prompted to fill in the W-8BEN form. Alternatively, you can submit the form by going to 'My Account' >  'W-8BEN Certification' > 'Submit Now'. 

ProsperUS submit W-8BEN form

While submitting the W-8BEN form, you are required to provide your Tax Identification Number (TIN). If you are a student and do not have a TIN number, tick ‘the account holder is not legally required to obtain a TIN’ section and give a reason why you do not have a TIN number (eg. You are a student).

ProsperUS: W-8Ben submission


How to Fund & Withdraw Funds from ProsperUs

Funding and withdrawing from your ProsperUs account can be done either via our local bank account or via a Singapore bank account (recommended).

Check out my step-by-step guide on how to fund your ProsperUs account, and how to withdraw funds from ProsperUs.

READ: The complete funding & withdrawal guide for ProsperUs


No Money Lah’s Verdict

So, are you looking for flexibility to access different markets from a broker backed by an established brand? If yes, definitely give ProsperUs by CGS-CIMB a try!

Regardless of your investment needs, I am almost certain that you’ll find a market or instruments that suit your preferences via ProsperUs.

Keen to give ProsperUs a try? Consider using my exclusive referral code ‘MONEY20’ when you register for your account! Doing so, you’ll get a free SGD50 top up and up to RM300 in e-Wallet credits!

Open a ProsperUS Account Today!

 


Disclaimers:

Past return is not indicative of future performance.

This post may contain affiliate links/codes that afford No Money Lah a small amount of referral (and help support the blog) should you sign up through my referral code.


How to use Tradingview

TradingView – The Ultimate Setup Guide for the BEST (& FREE) Stock Charting Platform!

Not all stock charts in your financial platform are made the same.

Some are barebone without any proper functions. Some look pathetic like they are built in the early 2000s. Even worse, many of these ‘meh’ charting services cost a fortune to use!

Well, at least that’s the case until TradingView joins the party.

Beginners or experienced investors alike, TradingView is one of the best charting platforms available in the market now. It is my go-to platform for all things chart – stocks, cryptocurrencies, ETFs, foreign currencies, and more.

In this comprehensive guide, let me guide you through how you can set up your charts on TradingView, and how to navigate around this amazing charting platform!

p

TradingView Highlights:

  1. TradingView is an extremely user-friendly & customizable web-based charting platform (ie. No downloads/installation needed).
    p
  2. It offers access to stock charts for various markets (eg. Malaysia, US, Singapore, Hong Kong, China, and more), cryptocurrencies, commodities, ETFs, foreign currencies, and more.
    p
  3. The Basic version of TradingView is FREE to use. That said, users can subscribe to unlock additional value & features from the platform.

 

How to Set Up TradingView for the First Time

To start, visit TradingView’s main site HERE. Then, click ‘Launch Chart’.

TradingView Homepage - Launch Chart
TradingView Homepage - Launch Chart

p

Step #1: Sign Up for a TradingView account by clicking ‘Join Now’.

Creating an account is important because it allows you to save your chart watchlist & setup later.

p

Click on 'Join Now' to open a TradingView account.
Click on 'Join Now' to open a TradingView account.
Sign Up for an account using the method your prefer.
Sign Up for an account using the method you prefer.

Step #2: Create a watchlist.

Once you got your account, the first thing you can do is to add some stocks to your watchlist:

Adding stocks to your watchlist.
Adding stocks to your watchlist.

p

Initially, the watchlist section may come with a list of stocks/securities that might not be useful to you. So, let’s clean that up first, shall we?

To do so, click on the 3-dot dropdown list at the top right corner (2a), and click ‘Clear List’ (2b).

Clean up the initial list in the watchlist section.
Clean up the initial list in the watchlist section.

Once this is done, click on the ‘+’ button to start adding stocks (or any other charts) to your watchlist:

Add stocks or any other charts to your watchlist
Add stocks or any other charts to your watchlist

Search for the stocks that you want, and click the ‘+’ button to add them to your watchlist.

Add stocks to your watchlist
Add stocks to your watchlist

p

Finally, click on any stock in your watchlist to open up the stock chart. From here, we’ll explore the main functions of TradingView that you can start using.

 

Open up your chart
Open up your chart

p

Key Features of TradingView

TradingView offers many neat and powerful features that investors of any level would come to appreciate. I’ll briefly go through some of the main features – feel free to explore them on your own!

Main TradingView features
Main TradingView features
  • Timeframe – Change the timeframe of your chart from the default Daily to Monthly/Weekly and even smaller timeframes like Hourly, and even Minutes!
    p

    View your charts in different timeframes.
    View your charts in different timeframes.

     

  • Candle Types – Modify your charts from the typical Japanese Candlesticks to other styles like Bar or Line charts, and more!
Customize the style of your charts
Customize the style of your charts

p

  • Compare – Want to put stocks with similar business models side-by-side? You can do just that on TradingView!
    p
    (a) Click ‘Compare’, then enter the name of the stock that you want to compare.

    Use the 'Compare' function to see if stocks are correlated to each other.
    Use the 'Compare' function to see if stocks are correlated to each other.

    p
    (b) Now you have the performance of 2 or more stocks on the same chart! This feature is especially useful if you want to see if there is any price movement correlation between the stocks.

    Now you can compare the price movement of stocks with clarity!
    Now you can compare the price movement of stocks with clarity!

    p

  • Indicators – If you are into technical indicators (eg. Moving Average, MACD, RSI), you can find a library of indicators in TradingView as well.

    There is a library of indicators to be used on TradingView. The question is - do you need them?
    There is a library of indicators to be used on TradingView. The question is - do you need them?

    p

  • Financials – Another amazing feature of TradingView is it allows you to display financial data on the chart. This could give investors an additional layer of perspective in their decision-making process.
    p
    A thing to note is the free version of TradingView can only display up to 5 years of annual data (and 2 years of quarterly data), where you’ll have to subscribe to unlock additional data. More details later in this article.

    Select the financial data that you need to be displayed on the chart.
    Select the financial data that you need to be displayed on the chart.

     

    Now you can look at the financial data of the company vs the price movement of the stock!
    Now you can look at the financial data of the company vs the price movement of the stock!

    p

  • Alerts – What if you want to wait for a better entry/exit price? What you can do is set an alert so you are notified when price crosses a certain level.
    p
    However, there is a limit of only 1 alert for the free version of TradingView. You’ll have to subscribe to enable more alerts.

 

Be sure to tick ‘Send Email’ if you are not always in front of the chart!
Be sure to tick ‘Send Email’ if you are not always in front of the chart!

p

Save Your Chart Setup

So, let’s say you are done setting up your charts. The final step is to save your chart setting so things will still look the same when you revisit the chart next time.
p

Save your chart setting
Save your chart setting

p

Additional MUST-KNOW Useful TradingView Tools/Features

Regardless if you are a new investor, or an experienced investor, there are many other neat little tools in TradingView that could help elevate your analysis:

#1 Stock/FX/Crypto Screener

TradingView comes with a handy Stock/FX/Crypto screener that you can tweak & customize to fit your preferences to filter for stocks.
p

TradingView comes with handy Stock, FX and Crypto screeners.
TradingView comes with handy Stock, FX, and Crypto screeners.

p

#2 Drawing/Measurement Tools

At the far-left corner lies the drawing/measurement toolbar for you to get your work done on the charts:

Drawing Tools on TradingView
Drawing Tools on TradingView

a/b/c: Line/Shape/Text tools - Draw lines or shapes and write text on the charts with these handy tools.

d: Predictive tools – Use these tools to help you do various forms of measurement on the charts. One of my favorite features here is called ‘Price Range’, where you can measure the % of price movement from Point A to B.
p

Predictive tools on TradingView
Predictive tools on TradingView

e: Enlarge – Zoom in to a specific section of a chart whenever needed.

f: Hide Drawings – Use this tool to hide the drawings on your chart.

g: Delete Drawings – Use this tool to remove all drawings on your chart.

p

#3 Connect to Various Brokers for Direct Execution

TradingView is not just a charting platform. It is also an execution platform for you to buy or sell – if you are using the right broker that can be connected to TradingView:

  • Step 1: Click ‘Trading Panel’.
    p
  • Step 2: Select the 3-dot button at the bottom right corner to open up the broker selection.
    p
  • Step 3: As shown below, there are many brokers that allow you to connect and execute your buy/sell orders directly from TradingView. One such broker is Tiger Brokers, my go-to stock broker for overseas markets such as the US, Singapore, and Hong Kong stock market.
You can connect your brokers and execute directly on TradingView.
You can connect your brokers and execute directly on TradingView.

p

#4 Take a Screenshot of Your Chart

You can take a nice screenshot of your charts by using the Alt+S keyboard shortcut.

p

Limitations on the Free (or Basic) Version of TradingView

At the end of the day, TradingView is not a charity. It runs on a paid subscription business model, with certain limitations imposed on the Basic version of TradingView, such as:

  • Ads of charts (kinda annoying, but understandable)
  • Limit to 1 chart per tab (ie. You cannot put 2 charts side-by-side)
  • Limit to 5 years of annual historical financial data on charts, and 2 years for quarterly financial data.
  • Limit to 3 indicators per chart.
  • Limit to 1 alert on chart and 1 watchlist.
  • No customer support.

Personally, even with these limitations, I think the Basic version of TradingView is enough to cater to the needs of most investors.

p

Should You Pay for a TradingView Subscription? (+Exclusive Referral Link!)

That said, for more sophisticated investors or active traders, I think it is worthwhile to consider paying for a TradingView subscription, which will unlock features that’ll improve your execution process.

There are 3 subscription packages for TradingView, which are Pro ($12.95/month*), Pro+ ($24.95/month*) and Premium ($49.95/month*). Briefly, the main highlights of what you’ll get with the cheapest Pro subscription ($12.95/month*) are:

  • No ads
  • Up to 5 indicators per chart
  • Up to 2 charts per tab
  • Up to 10 alerts and multiple watchlists
  • 15 years of annual financial data on charts, and 8 years for quarterly financial data.
  • Access to Volume Profile
  • Small timeframe bar replay (hourly, minutes, seconds) for traders – great for backtesting.
  • Customer Support
  • MORE DETAILS HERE

(*Pricing for annual subscription)

Essentially, the main difference here is you’ll get more of what each subscription offers as you level up from Pro to Pro+ or Premium. Regardless, feel free to try it out on a 30-day free trial by clicking the button below before making up your mind.

Try TradingView PRO plans today!

Eventually, if you decide to subscribe to TradingView, feel free to use my referral link HERE. In return, you’ll get TradingView Coins worth $10 (monthly subscription) or $30 (annual subscription), where you can use to pay to extend your subscription.

p

Important Note: Delayed Data for KLSE, SGX & SEHK

TradingView comes with live datafeed for the US stock market, FX, CFDs, and cryptocurrencies.

However, if you are investing or trading the market outside of US, it is important to note that the data that comes with TradingView is delayed data.

In short, if you are investing in markets like the Malaysian/Singapore/Hong Kong/Shanghai stock market, the price that you see on the chart is delayed by 10 minutes.

Reason being, these price data are under the authority of the respective stock exchanges (eg. Bursa), and users will need to pay a fee to access live datafeed.

Delayed datafeed is marked by initial 'D'.
Delayed datafeed is marked by initial 'D'.

This should not be a problem for long-term investors, but shorter-term traders may need to consider purchasing live datafeed for better execution.

To get your hands on the live datafeed, you’ll have to subscribe to TradingView’s paid plan. On checkout, you can select and pay for the market that you need live datafeed.

You'll have to subscribe to live datafeed to access real-time data.
You'll have to subscribe to live datafeed to access real-time data.

p

No Money Lah’s Verdict

So here you go – a detailed guide to set up your charts on TradingView!

Hopefully you are finding this guide useful, especially if you are looking around for a good charting platform!

In my opinion, TradingView is an amazing (and user-friendly) charting platform and nothing can really come close to offer what they are doing. Even with the Basic version of TradingView, you are getting massive value out of the platform!

Do you have any questions about TradingView? Feel free to leave your questions in the comment section below and I’ll do my best to help wherever I can!


ALSO READ: How to read stocks charts without indicators!

Disclaimer: This article contains affiliate link(s), which will reward No Money Lah with a small amount of fees when you make a purchase using my TradingView referral link.

If you use my referral link to subscribe to a paid plan, you’ll get TradingView Coins worth $10 (monthly subscription) or $30 (annual subscription), where you can use to pay to extend your subscription.

 


Best China ETFs in Malaysia

ETF: Best China ETFs in Malaysia!

Imagine investing in a country where the everyday people are spending almost 2x as much compared to the everyday people in the US.

How can you benefit from this massive spending power and growth?

In this post, let’s talk about how you can invest in China through 3 Malaysia-listed ETFs (TradePlus S&P New China Tracker, VP-DJ Shariah China A-Shares 100 ETF, Principal FTSE China 50 ETF) and their respective performances!

Before this, here are some related posts that you may want to read:

p

Context: China growing middle class (and massive spending power)

China is a country with a huge population. Of all, the Chinese middle class makes up half (50.8%) of China’s population.

Before you continue, I want you to take a moment, and guess how massive is the Chinese middle class.

Done?

China middle class as per total population
China's middle class makes up half of the population.

As of 2016, there is about 730 million middle class in China. For the record, that’s about 697x the whole Malaysian population!

Now, a random middle-class Chinese may not be able to spend much. But with 730 million of them (again, 697x the whole Malaysia), this creates a HUGE consumption power, and business opportunities.

In 2020, China's middle class recorded consumption of $7.3 trillion (12 zeros, you're welcome), which is almost double what the US's middle class has spent.

China middle class consumption 2020 vs other countries
China middle class consumption vs other countries (2020)

Here’s one more thing you need to know: China’s middle class is expected to keep growing, and reach about 1.2 billion in 2027!

So, how can you ride and invest in the growth of this huge consumption powerhouse?

Let’s find out with our very own Malaysia-listed China ETFs!

Huge population in China
When I say there is a lot of people in China, I mean it. (Photo taken in 2019 in a random street during my stay in Shanghai)

ETF #1 TradePlus S&P New China Tracker (CHINAETF-MYR)

TradePlus S&P New China Tracker (or CHINAETF-MYR) is a Malaysia-listed ETF that provides investors exposure to Chinese companies (listed in HK and US) within the consumption and service-orientated industries.

  • CHINAETF-MYR (Stock Code: 0829EA) was listed and started trading in Bursa Malaysia in 2019.
  • Underlying index: CHINAETF-MYR tracks the S&P New China Sectors Ex A-Shares Index through full replication strategy to ensure minimal tracking error.
  • Annual Fees: 0.59% of Net Asset Value (NAV)
    • Annual Management Fee: 0.50%
    • Annual Trustee Fee: 0.04%
    • Index License Fee: 0.05%

Sector exposure of TradePlus S&P New China Tracker

Essentially, investing in CHINAETF-MYR provides investors exposure to Chinese businesses that grow on increasing consumer spending.

Through CHINAETF-MYR, you’ll mainly gain exposure to companies from the consumer discretionary (43%), communication services (19%), and financial sector (15%).

Given the growth of China’s middle class, the CHINAETF-MYR can be an attractive opportunity for investors looking to ride on the growing consumer market.

Sector exposure of TradePlus S&P New China Tracker ETF
Sector exposure of TradePlus S&P New China Tracker ETF (Source: TradePlus)

Notable companies/holdings of TradePlus S&P New China Tracker

As of August 2021, the top 10 holdings of CHINAETF-MYR include companies such as AIA Group, Tencent, Alibaba, and Meituan Dianping.

Top 10 Holdings of TradePlus S&P New China Tracker ETF (Source: TradePlus)
Top 10 Holdings of TradePlus S&P New China Tracker ETF (Source: TradePlus)

Performance of TradePlus S&P New China Tracker

Since CHINAETF-MYR is listed in 2019, there is very limited historical data on the past performance of the ETF.

That said, the back-tested performance of the S&P New China Sectors Ex A-Shares Index (ie. The underlying index of CHINAETF-MYR) can be a good reference for us:

Over a 10-year period (2011 – 2021), the S&P New China Sectors Ex A-Shares Index has grown by roughly 200%, translating to an annualized return of 10.63%.

In other words, on average, your capital would have increased by 10.63% every year if you invested in the S&P New China Sectors Ex A-Shares Index since 2011.

S&P New China Sectors ex A-share
S&P New China Sectors ex A-share index performance (Source: S&P Global)

ETF #2 VP-DJ Shariah China A-Shares 100 ETF (0838EA)

The VP-DJ Shariah China A-Shares 100 ETF is a Malaysia-listed ETF that provides exposure to the top 100 largest & most liquid Shariah-compliant shares that are listed in China.

  • VP-DJ Shariah China A-Shares 100 ETF (Stock Code: 0838EA) was listed and started trading in Bursa Malaysia in 2021.
  • Underlying index: 0838EA tracks Dow Jones Islamic Market (DJIM) China A-Shares 100 Index through full replication strategy to ensure minimal tracking error.
  • Annual Fees: 0.70% of Net Asset Value (NAV)
    • Annual Management Fee: 0.60%
    • Annual Trustee Fee: 0.06%
    • Index License Fee: 0.04%

Investing in China A-Shares

Unlike TradePlus S&P New China Tracker that invests in Chinese shares listed in HK and US, the VP-DJ Shariah China A-Shares 100 ETF invests directly in Chinese stocks listed in the Shanghai and Shenzhen Stock Exchange (a.k.a. A-shares).

Generally, investing in China A-Shares reflects exposure to Chinese companies that are less well-known globally, and usually more domestically-focused in their business.

While China A-shares may not be as popular, the benefits can be interesting to certain investors.

As an example, A-shares tend to experience smaller impact from global risks (eg. Geopolitical, global pandemic) as most businesses generate revenues domestically.

With that in mind, China A-shares ETFs can be a good diversification vehicle for investors with exposure, especially in the US market.


Sector Exposure of VP-DJ Shariah China A-Shares 100 ETF

As a whole, 0838EA has a balanced and diversified exposure to sectors such as healthcare (21%), consumer discretionary (18%), technology (16%), and industrials (15%).

Sector Exposure of VP-DJ Shariah China A-Shares 100 ETF
Sector Exposure of VP-DJ Shariah China A-Shares 100 ETF (Source: Value Partners Malaysia)

Notable Companies/Holdings of VP-DJ Shariah China A-Shares 100 ETF

Investing in China A-shares can be unfamiliar to most investors as most companies are not as well-known globally. I’ll do a brief introduction to some of the notable companies in this ETF:

As of September 2021, the top 10 holdings of 0838EA include companies such as:

  • Contemporary Amperex Technology Co. (CATL): CATL is one of the dominant battery manufacturers in the EV industry, with association with big names like Toyota, Volkswagen, Volvo, and more.
  • China Tourism Group Duty Free Corp.: A Chinese company involved in travel agencies and duty-free businesses.
  • China Yangtze Power Co. (CYPC): CYPC is involved in the businesses of hydropower generation, power distribution & sales, and overseas power plants operation & management. With a total installed capacity of 45.495 GW, the company is the largest listed electric power company in China and the largest listed hydropower company globally.
  • Shenzhen Mindray Bio-Medical Electronics Co.: Mindray is China’s largest medical equipment manufacturer, with a presence around the world. It is a company that makes medical equipment such as patient-monitoring and life-support systems and ultrasound machines.
Top holdings of of VP-DJ Shariah China A-Shares 100 ETF (Source: Value Partners Malaysia)
Top holdings of VP-DJ Shariah China A-Shares 100 ETF (Source: Value Partners Malaysia)

Performance of VP-DJ Shariah China A-Shares 100 ETF

Since 0838EA is listed in 2021, there is very limited historical data on the past performance of the ETF.

That said, the back-tested performance of the Dow Jones Islamic Market (DJIM) China A-Shares 100 Index (ie. The underlying index of 0838EA) can be a good reference for us:

Over a 10-year period (2011 – 2021), the DJIM China A-Shares 100 Index has grown by roughly 157%, translating to an annualized return of 9.96% per year.

In other words, on average, your capital would have increased by 9.96% every year if you invested in the DJIM China A-Shares 100 Index since 2011.

DJIM China A shares 100 index
DJIM China A-shares 100 index performance (Source: S&P Global)

ETF #3 Principal FTSE China 50 ETF (CIMBC25)

Listed in 2010, the Principal FTSE China 50 ETF (or CIMBC25) is the longest Malaysia-listed ETF with China exposure.

  • CIMBC25 (Stock Code: 0823EA) tracks the FTSE China 50 Index either via full replication strategy or representative sampling strategy.
  • Through CIMBC25, investors get exposure to the 50 largest and most liquid Chinese stocks listed in Hong Kong.
  • Annual Fees: 0.72% of Net Asset Value (NAV)
    • Annual Management Fee: 0.60%
    • Annual Trustee Fee: 0.08%
    • Index License Fee: 0.04%

Sector Exposure of Principal FTSE China 50 ETF

Investors that invest in CIMBC25 gain exposure to 3 main sectors, namely Consumer Discretionary (33%), Financials (29%), and Telecommunication Services (12%).

In many ways, there is a huge resemblance between investing in CIMBC25 relative to TradePlus S&P New China Tracker that we discussed earlier. In short, both ETFs focus on sectors that is highly dependent on consumerism.

Sector Exposure of Principal FTSE China 50 ETF
Sector Exposure of Principal FTSE China 50 ETF (Source: Principal)

Notable Holdings/Companies of Principal FTSE China 50 ETF

CIMBC25 allows investors to gain exposure to the big names in China. As of August 2021, the top 10 companies held by the ETF includes Alibaba, Tencent, Meituan Dianping, Xiaomi, and more:

Notable Holdings/Companies of Principal FTSE China 50 ETF
Notable Holdings/Companies of Principal FTSE China 50 ETF (Source: Principal)

Performance of Principal FTSE China 50 ETF

Unlike the previous ETFs in this article, CIMBC25 is listed in 2010, which means we have enough historical data on the past performance of the ETF.

Looking at the chart, the CIMBC25 ETF has grown by 92% over the past 10 years (2011 – 2021). This translates to an annualized return of 6.64% per year.

In other words, on average, your capital would have increased by 6.64% every year if you invested in the FTSE China 50 ETF since 2011.

Performance of Principal FTSE China 50 ETF over the past 10 years
Performance of Principal FTSE China 50 ETF over the past 10 years (Chart from TradingView)

Which Malaysia-listed China ETF is the best?

So, which Malaysia-listed China ETF should you invest in if you are keen to ride on the huge potential of the China market?

Personally, I think there is no absolute ‘best’ ETF in this case. Rather, it is finding the ‘right’ ETF as per your investing goals and needs:

  • If you are looking to invest in China for the first time, the TradePlus S&P New China Tracker (CHINAETF-MYR) or Principal FTSE China 50 ETF (CIMBC25) can be a good start.

Both ETFs have similar resemblance where they have huge exposure to consumer-heavy industries (ie. Consumer Discretionary, Financials).

In addition, both ETFs are holding companies that most of us are familiar with, such as Alibaba, Tencent, and JD.com.

When it comes to annual fees, TradePlus S&P New China Tracker (0.59%) is slightly lower compared to Principal FTSE China 50 ETF (0.72%).

As for past performance, TradePlus S&P New China Tracker* displayed a better return (+200%) relative to Principal FTSE China 50 ETF (+92%) over the past 10 years (2011 – 2021).

That said, it should be noted that past performance is not indicative of future returns.

[*Backtested results of the underlying index]

  • If you have a deeper understanding of the domestic Chinese business environment, and/or looking for a relatively low-correlation diversification from a US-heavy portfolio, the VP-DJ Shariah China A-Shares 100 ETF can be a decent choice with exposure to China A-shares.

How to invest in Malaysia-listed ETFs?

Investing in ETF is similar to buying/selling stocks. You can invest in Malaysia-listed ETFs via stock brokers that allow access to the Bursa Malaysia stock market, such as Rakuten Trade.

Invest in China ETFs through Rakuten Trade
Invest in China ETFs through Rakuten Trade

If you do not have a brokerage account yet, consider using my Rakuten Trade referral link below and get the following when you open an account:

  • 500 Rakuten Trade (RT) points (equivalent to RM5 brokerage fee rebate!)
  • + 150 RT points when you deposit a min. of RM5,000 within 5 days
  • + 150 RT points when you transfer your shares from other brokers to Rakuten Trade
  • + 800 RT Points & a brokerage fee rebates when you place your 1st trade within 10 days after your account is activated.

Aside from that, Rakuten Trade users get +1 RT point for every RM2 brokerage paid!

Open A Rakuten Trade Account Today!


No Money Lah’s Verdict

So, there you have it – a detailed overview of Malaysia-listed China ETFs!

Personally, I think China is definitely going to grow in the coming future, despite regulatory risks from the Chinese government.

Moreover, I think this is where China ETFs shine compared to individual companies, as ETFs can help in reducing company-specific risk.

Regardless, what do you think? Will you allocate certain portion of your capital for exposure in China?

Feel free to share with me in the comment section below!


Disclaimers

This article is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.

This post may contain affiliate links that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.


malaysia dividend etf

ETF: Best Dividend-Paying ETFs in Malaysia

Are you looking to invest for passive income in the form of consistent dividends? Then this post is for you!

In this week’s post, let’s explore several Malaysia-listed Exchange-Traded Funds (ETFs) that focus on paying investors consistent dividends.

As a focus, I’ll talk about TradePlus MSCI Asia Ex-Japan REITs Tracker, Malaysia’s 1st REIT ETF launched to provide consistent, higher-than-average dividends for investors.

In addition, I’ll also briefly discuss several other locally listed dividend ETFs as well at the end of this article.

Let’s get started!

p

Why invest in ETFs instead of individual companies?

First, let’s briefly understand why one should invest in ETF instead of individual companies:

ETFs are listed in the stock market, and hence can be bought and sold just like any stocks. Since ETF tracks the performance of a basket of stocks, it presents 3 main benefits:

  • No individual company risks: Since ETF tracks a basket of stocks, a single company that is underperforming or faces regulatory issues has minimal impact on the performance of an ETF as a whole.
  • Filter for quality companies: Usually, when we say that an ETF ‘tracks a basket of stocks’, it means the ETF is tracking a specific index (eg. S&P 500, KLCI).
    p
    To become part of an index, listed companies will need to fulfill specific criteria.
    Hence, by design, this ensures the addition of qualified companies in an index, and the removal of unqualified companies.
  • Passive in nature: In general, investing in ETFs requires less work and commitment compared to individual stocks. Since an index already has a selection criterion in place, filtering of companies (ie. Rebalancing) is done on a consistent basis.
    p
    In other words, investors that invest in ETFs can take a more passive approach in their investing journey (and enjoy life) instead of having to keep up with the financials of individual companies.

Essentially, if you are busy with work and life, I highly recommend for you to check out ETFs over stocks for long-term investments.

ETF is an amazing investment choice for beginners and experienced investors alike.
ETF is an amazing investment choice for beginners and experienced investors alike.

READ MORE: Malaysian’s Guide to invest in ETF


ETF #1: TradePlus MSCI Asia Ex-Japan REITs Tracker (AXJ-REITSETF) Overview

Launched in July 2020, the TradePlus MSCI Asia Ex-Japan Reits Tracker (or AXJ-REITSETF) is Malaysia’s 1st REIT ETF. It aims to provide consistent and high dividends for investors through exposure to quality REITs:

  • AXJ-REITSETF tracks REITs that pay consistent and high dividends from the MSCI AC Asia ex-Japan IMI index.
  • In other words, when you invest in AXJ-REITSETF, you will get exposure to a basket of quality REITs from developed Asian countries (HK and SG), and emerging markets such as China, India, Indonesia, Korea, Malaysia, Pakistan, the Philippines, Taiwan, and Thailand.
  • Dividend payout is done on a quarterly basis (ie. 4 times a year)

READ MORE: What is REIT and why invest in them?


How are the REITs selected?

The REITs from AXJ-REITSETF are selected from the MSCI AC Asia ex-Japan IMI index, an index that tracks the performance of stocks across developed and emerging markets in Asia.

There are a few filtering requirements for a REIT to be selected:

  • Offers a higher-than-average dividend yield
  • Have a consistent track record of dividend payout
Tradeplus reit tracker - reit selection
AXJ-REITSETF has strict REIT selection criteria to ensure exposure to quality REITs. (Source: TradePlus)

Furthermore, to ensure the quality REIT selection, the following REITs will also be filtered out:

  • REITs with negative growth in terms of Distribution Per Unit (DPU) over 5 years will not be included.
  • For sustainability purposes, REITs whose dividend pay-out is extremely high or negative will not be included.
  • REITs without a historical track record of consistent dividend payment will not be included as well.

Filtering is a great feature of an index. Reason being, it sets criteria to automatically include qualified companies, and remove companies that do not meet the required criteria of an index.

Simply put, when investing in an index-tracking ETF, you’ll not need to worry about one specific company (or in this case, REIT) turning bad – they’ll simply be replaced once they do not fulfill the filtering criteria.


What’s in the TradePlus MSCI Asia ex-Japan REITs Tracker?

As of August 2021, the top 10 REIT holdings within the AXJ-REITSETF are mainly Singapore REITs. This is not surprising, given that Singapore is one of the most mature REIT markets in Asia:

TradePlus REIT tracker - top 10 holdings
The top 10 AXJ-REITSETF REIT holdings are Singapore REITs (Source: TradePlus)

 

TradePlus REIT tracker - REIT exposure by country
Nearly 76% of AXJ-REITSETF's REIT holdings are listed in Singapore. (Source: MSCI)

As for sector allocation, industrial REITs and retail REITs make up 58.1% of the overall allocation:

Tradeplus REITs Tracker ETF
Source: TradePlus

READ MORE: Introduction to Singapore REIT (SREIT) and why invest in SREIT?


Performance & Dividend Yield of TradePlus MSCI Asia ex-Japan REITs Tracker

Since AXJ-REITSETF is a newly listed ETF (July 2020), there is no historical data on the past performance of the ETF.

However, you can find the back-tested performance of its underlying index as a reference. Just remember that back-testing performance is not indicative of future performance:

TradePlus REITs tracker - price performance
The back-tested performance of the MSCI AC Asia ex-Japan IMI Index for REITs (Source: MSCI)

In my opinion, purely from the perspective of price returns (ie. Capital gains), AXJ-REITSETF is certainly not impressive. With 5-year and 10-year annualized returns of 1.66% and 7.13% respectively, this ETF is not ideal if you are specifically looking for capital growth.

That said, if you are looking for consistent high dividend payout (ie. Passive income) from your investment, AXJ-REITSETF can be a suitable choice:

 

TradePlus REITs tracker - dividend yield
The dividend yield of the MSCI AC Asia ex-Japan IMI Index for REITs (Source: MSCI)

As of September 2021, the underlying index of AXJ-REITSETF generates a dividend yield of 5.54%*, which is definitely higher than the average dividends payouts in the equity market.

In short, from my understanding of REITs, I am fairly confident that you can expect between 4 – 5% of annual dividend yield from AXJ-REITSETF.

*While it is not clearly specified in the document, I’d assume this is a rolling 12-month dividend yield


A word on the performance of dividend investing:

While approaching dividend investing, it is also helpful that you adjust your expectation to the returns of your investment.

As an example, by nature, as a real estate business, REITs generally have more moderate growth in price. Hence, you probably should not invest in REITs with the expectation of huge capital gains.

However, REITs pay stable and higher-than-average dividends, which can be attractive if you are building a passive income from your investment over the long term.

Understand your goals, and adjust your expectations accordingly.

Compounding growth of a 5% annual dividend when re-invested
Invest $12,000 annually and end up with $446,000 in 20 years.

How to invest in TradePlus MSCI Asia ex-Japan REITs Tracker? 

Investing in ETF is similar to buying/selling stocks. Below, you can find the details of this ETF:

ETF Ticker/Symbol Currency Annual Fees Min. Unit per Transaction
TradePlus MSCI Asia ex Japan REITs Tracker (AXJ-REITSETF) 0837EA MYR Management Fee: 0.50%

Trustee Fee: 0.04%

Index License Fee: 0.015%

Total: 0.555% of Net Asset Value

100

You can invest in AXJ-REITSETF via stock brokers that allow access to the Bursa Malaysia stock market, such as Rakuten Trade.

Invest in TradePlus REITs Tracker through Rakuten Trade
Invest in AXJ-REITSETF through Rakuten Trade

If you do not have a brokerage account yet, consider using my Rakuten Trade referral link below and get the following when you open an account:

  • 500 Rakuten Trade (RT) points (equivalent to RM5 brokerage fee rebate!)
  • + 150 RT points when you deposit a min. of RM5,000 within 5 days
  • + 150 RT points when you transfer your shares from other brokers to Rakuten Trade
  • + 800 RT Points & a brokerage fee rebate when you place your 1st trade within 10 days after your account is activated.

Aside from that, Rakuten Trade users get +1 RT point for every RM2 brokerage paid.

Open A Rakuten Trade Account Today!


Another thing that you need to know about TradePlus MSCI Asia ex-Japan REITs Tracker

AXJ-REITSETF uses a full replication strategy to track its underlying MSCI AC Asia ex Japan IMI / Equity REITs Custom High Dividend Tilted Capped Index.

Meaning, you are getting close to perfect replication of an index with the least tracking error.

ETFs' index tracking strategies explained.
ETFs' index-tracking strategies explained.

READ MORE: 3 different replication strategies in ETFs!


2 more Malaysia-listed ETFs that pay decent dividends

There are 2 more Malaysia-listed ETFs that pay consistent and decent dividends. That said, their past and potential dividend yield aren’t as attractive as AXJ-REITSETF, but feel free to explore further regardless!

ETF #2 MyETF MSCI Malaysia Islamic Dividend (MyETF-MMID/0824EA)

The MyETF MSCI Malaysia Islamic Dividend (MyETF-MMID) is an ETF that mirrors the performance of the MSCI Malaysia IMI Islamic High Dividend Yield 10/40 Index.

This is an index that tracks Shariah-compliant companies listed in Bursa Malaysia with higher-than-average dividend yields.

Below are the Distribution per unit (DPU) and Dividend Yield of MyETF-MMID over the 3 most recent financial years:

Financial Year (FY) Distribution Per Unit (DPU) (sen) Dividend Yield (%)
2017 2.81 2.37
2018 2.76 2.38
2019 2.96 2.57

 

READ MORE: What are distribution per unit (DPU) and dividend yield (DY)?


ETF #3 Principal FTSE ASEAN 40 Malaysia ETF (CIMBA40/0822EA)

The Principal FTSE ASEAN 40 Malaysia ETF (CIMBA40) is an ETF that mirrors the performance of the FTSE/ASEAN 40 Index.

This is an index that tracks the largest 40 companies by full market value listed on the stock exchanges of Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

Below are the Distribution per unit (DPU) and Dividend Yield of CIMBA40 over the 3 most recent financial years:

Financial Year (FY) Distribution Per Unit (DPU) (sen) Dividend Yield (%)
2019 6.85 3.59
2020 5.87 3.79
2021 6.18 3.86

 


No Money Lah's Verdict

So, there you have it – 3 Malaysia-listed ETFs that pay consistent and decent dividends!

If you are looking to generate passive income (dividends) through your stock investments, dividend-paying ETFs is certainly an option you can consider.

I hope you find this article helpful, and if you have any questions, feel free to let me know in the comment section below!


Disclaimer:

This article is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions. 

This post may contain affiliate links that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.