Gold Investment No Money Lah - What drive gold price?

2 SECRET reasons that move gold price! - Part 2

Gold is one of the most precious commodities in the world.

Not only gold is rare, but it is also very durable. It doesn't rust, it doesn't tarnish, and you can bury your gold and come back in 50 years (or 5,000 years) and it would still be unchanged.

However, in my previous post, I used past data to prove that gold is not an ideal hedge against inflation, nor it is a stable investment:

Gold can swing both ways when inflation is high.

That said, gold is an excellent insurance within an investment portfolio when major asset classes like stocks and bonds are tumbling. In other words, gold tends to hold up well when the market gets tough - just look at 2022:

2022 Gold vs Stocks vs Bonds

In this post, I want to answer an important question:

If inflation has minimal impact on gold's performance, what actually moves gold price?

If you are looking to invest in gold, this will give you a solid insight into why gold price behaves the way it does!

RELATED POST: Part 1 - Why you need to buy gold (not inflation)

2 underrated indicators that drive gold price

The market is a complex place and there are many reasons that drive the price of gold.

In this post, I want to break down 2 less-talked-about (yet crucial) indicators that move the price of this precious metal:

#1 The health of the banking sector

Banks are an important part of the economy, as they create capital (eg. loans) and provide liquidity to the market.

Therefore, a healthy banking sector indicates a healthy economy.

In this case, the banking sector has an inverse correlation with gold prices. This is because investors tend to flock to gold when there is a negative perception towards the economy.

Check out how gold price has a tendency to move in the opposite direction against the banking sector:

NASDAQ Banking Index (ticker: BANK) vs gold price

Whenever the banking sector suffers, it has had a positive impact on gold prices as investors are prepared for economic weaknesses.

The health of the banking sector is, therefore, a leading indicator of gold prices.

Try this on your own:

Using my preferred charting platform TradingView:

  • Firstly, search for the ticker for gold 'GLD'.

  • Next, click the '+' symbol, and search for the ticker 'BANK' which represents the banking sector in the US.

  • Right-click the price axis and change it from 'Regular' to 'Percent'.

RELATED POST: TradingView beginner's guide - my favourite charting platform!


#2 Real Yield

Real yield refers to the interest that government bonds pay to investors, minus the expected/actual inflation rate:

Real Yield = Interest from government bonds - Expected or Actual Inflation Rate

A positive real yield means the interest from bonds beats inflation. A negative real yield implies that the interest from bonds is not able to cover inflation.

In this case, real yield tends to have an inverse relationship to gold.

Why so?

  • Because when real yield is rising, there is an opportunity cost to investing in anything other than interest-paying assets like bonds.

  • Since gold DOES NOT pay interest, that makes the opportunity cost of holding gold much higher, thus suppressing the price of gold. 
Gold price drops when real yield is rising

  • Meanwhile, when real yield is dropping, the returns from bonds become less attractive.

  • As such, investors will be inclined to take more risks by investing in assets that do not pay interest, such as gold. This will usually push the price of gold in a positive direction.
Gold price rises when real yield drops

Try this on your own:

  • To start, click HERE to access data for the 10-year US treasury yield graph.

  • Select 'Edit Graph'

  • Under 'Customize Data', select '10-Year Breakeven Inflation Rate', then click 'Add'.

  • Under 'Formula', type 'a-b'. Then, click 'Apply'. You will get the graph I used in this post.

3 recommended ways to invest in gold

Below, let me recommend 3 ways to invest in gold without having to store physical gold:

Method 1: Invest in local gold ETF via Rakuten Trade

The TradePlus Shariah Gold Tracker (code: 0828EA) is a Malaysia-listed Exchange-Traded Fund (ETF) that tracks gold price.

This gold ETF is shariah-compliant and is backed by physical gold bars, ensuring that it tracks the price of gold with precision.

Rakuten Trade Gold ETF Malaysia

At a low annual fee of 0.56% (trustee, management, custody fees), it is one of the most convenient ways for Malaysians to invest in gold without having to store physical gold!

You can start investing in the TradePlus Shariah Gold Tracker (code: 0828EA) via Rakuten Trade.

Rakuten Trade US and Hong Kong Stock Trading Review and Referral Link

RELATED: Rakuten Trade long-term review

--

p.s. You can also invest in US gold ETF (Method 2) via Rakuten Trade as they also offer access to the US stock market!

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Method 2: Invest in US gold ETF via Interactive Brokers (IBKR)

You can also invest in gold ETF that is listed in the US, such as the SPDR Gold Shares ETF (ticker: GLD).

GLD is also backed by physical gold so it can reflect the gold price in the closest presicion.

Compared to Malaysia-listed gold ETF, GLD is quoted in USD and has a lower annual estimated fee of 0.4%.

If you prefer to have your gold investments in USD, GLD is the way to go.

You can invest in GLD via Interactive Brokers, my preferred platform to buy global stocks:

Interactive Brokers (IBKR) - Buy Gold ETF (GLD)

READ MORE: Interactive Brokers Long-Term Review

Method 3: Invest in gold ETF via Versa Gold

If opening a stock brokerage account overwhelms you, and you want a simple-to-use platform to buy gold, you can consider checking out Versa Gold from Versa.

With Versa Gold, you are essentially investing in TradePlus Shariah Gold Tracker from Method 1 above, but at a much simpler to use Versa app.

Versa Gold Review

In addition, Versa Gold requires a low minimum investment amount of RM100, which is very beginner-friendly if you want to try investing in gold.

Get RM10 when you sign up for a Versa account via my promo code

No Money Lah Verdict + Takeaways

I hope this post is helpful in showing you what kind of fundamental indication tends to move gold price!

Having this knowledge can help you understand why gold moves and responds the way it does - and it is highly insightful as an investor.

So, would you consider investing in gold? Why or why not?

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


Disclaimers

Any of the information above is produced with my own best effort and research. 

This post 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.


Why invest in gold no money lah

The REAL reasons why you need to invest in gold (not inflation) - Part 1

For the longest time, investors buy gold to preserve wealth as it is thought to be a stable investment.

In fact, when the Malaysian government granted users special withdrawals from EPF (our retirement fund) in the past few years, many Malaysians went on to - you guessed it - buy gold.

Source: RinggitPlus

The question is: Is gold a good investment (it depends)? Is gold really stable (nope) and protects your wealth against inflation (...and nope)?

In this post, let's debunk a few myths about gold, and why I think most investors would still be better off investing in gold!

RELATED POST: 2 SECRET reasons that move gold price!

Highlights

  • Gold is not a stable investment, and shows little signs that it is a good protection against inflation.

  • That said, gold is a solid diversification from assets like stocks and bonds due to its low correlation with these assets.

  • Holding gold in an investment portfolio helps with psychology as it helps reduce downside impact, and improve recovery time from a drawdown.

Interested? Slide down to learn more about why you need to invest in gold!


2 wrong reasons why people invest in gold:

Reason 1: "Because gold is a stable investment."

But is it really?

Check out the visual below where we compare the returns of different asset classes for the past 50+ years.

What can we learn from the visual:

  • It is not hard to see that gold is actually pretty volatile over the years compared to bonds and home prices.

  • If you observe closely, you'd also notice that gold tends to swing to the negative territory a lot more times than the S&P500 (US stocks), and Real Estate Investment Trust (REIT).

From this, we can debunk with confidence that gold is definitely not as 'stable' as most people assume.

How to invest during high inflation
Source of data: BullionVault

Reason #2: "Because gold protects my wealth against inflation."

Another common reason why people invest in gold is to protect themselves against inflation.

However, this perception is far from the truth in reality.

Below, check out how gold performed in the past when inflation in the US is over 4%:

From what you can see, buying gold to 'protect' your wealth against inflation depends largely on luck - because gold can fluctuate both ways EVEN when inflation is high.

So, what does this tell us?

Essentially, on its own, gold's performance is hardly impressive and it does not even protect investors well against inflation.

However, you should not dismiss gold because of the reasons above. In fact, when done right, investing in gold can help you sleep well at night - especially when things get tough.


2 REAL reasons why you (still) need to invest in gold:

#1 Low correlation

Generally, gold has a low correlation when compared to major stocks and fixed-income assets.

In other words, this means when stocks or bond prices tumbled in price, gold tends to hold its ground well, or is faster to recover.

2022 is a solid example:

Check out how gold correlates to equities (stocks) and fixed-income assets (eg. bonds) below:

The lower it is to 1.0, the lower gold's correlation is compared to the particular asset. (Note: As of December 2022)
The lower it is to 1.0, the lower gold's correlation is compared to the particular asset. (Note: As of December 2022)

#2: Gold as a portfolio diversifier

Why is gold's low correlation with other assets important?

This is because while gold does not produce impressive returns on its own, it is an excellent risk diversifier in an investment portfolio consisting of stocks and bonds.

Simply put, gold is highly effective in helping to reduce the downside risk of your entire investment portfolio.

Let's look at an example below:

Scenario: Gold as a portfolio diversifier in a 100% stocks portfolio

In this example, let's imagine yourself investing in a 100% stocks portfolio against an 80% stocks-20% gold portfolio from 1972 - Jan 2023:

We will invest $500 every month in each of the portfolios and see what happens:

Source: World Gold Council portfolio simulator

What can we infer from the table above?

  • Surprisingly, there is only minimal difference in the annual returns (CAGR) between each portfolio in the long run. (22.68% vs 22.3%)

  • However, having gold in a stock portfolio would help reduce the max drawdown you'd experience by a significant margin! (-50.57% vs -38.74%)

To give you a better perspective, check out how fast your investments would recover in the past 2 stock market crises (2007 - 2008, 2000 - 2002) if you have gold in your portfolio:

Source: World Gold Council portfolio simulator

For instance, in the Global Financial Crisis (2007 - 2009), a 100% stock portfolio would need about 3 years and 1 month to recover, while having 20% gold in the portfolio would take 1 year and 10 months to recover.

As an investor that has gone through a tough year in 2022, I'm sure you'll know how valuable a 15-month faster recovery means to your confidence and mental health.

In other words, having some gold in your portfolio can help you sleep better at night, especially during difficult times!


3 recommended ways to invest in gold

Below, let me recommend 3 ways to invest in gold without having to store physical gold:

Method 1: Invest in local gold ETF via Rakuten Trade

The TradePlus Shariah Gold Tracker (code: 0828EA) is a Malaysia-listed Exchange-Traded Fund (ETF) that tracks gold price.

This gold ETF is shariah compliant, and is backed by physical gold bars, ensuring that it tracks the price of gold with precision.

TradePlus Shariah Gold Tracker (code: 0828EA) is a Malaysia-listed Exchange-Traded Fund (ETF) that tracks gold price.

At a low annual fee of 0.56% (trustee, management, custody fees), it is one of the most convenient ways for Malaysians to invest in gold without having to store physical gold!

You can start investing in the TradePlus Shariah Gold Tracker (code: 0828EA) via Rakuten Trade.

Rakuten Trade US and Hong Kong Stock Trading Review and Referral Link

RELATED: Rakuten Trade long-term review

--

p.s. You can also invest in US gold ETF (Method 2) via Rakuten Trade as they also offer access to the US stock market!

Method 2: Invest in US gold ETF via Interactive Brokers (IBKR)

You can also invest in gold ETF that is listed in the US, such as the SPDR Gold Shares ETF (ticker: GLD).

GLD is also backed by physical gold so it can reflect the gold price in the closest presicion.

Compared to Malaysia-listed gold ETF, GLD is quoted in USD and has a lower annual estimated fee of 0.4%.

If you prefer to have your gold investments in USD, GLD is the way to go.

You can invest in GLD via Interactive Brokers, my preferred platform to buy global stocks:

READ MORE: Interactive Brokers Long-Term Review

Method 3: Invest in gold ETF via Versa Gold

If opening a stock brokerage account overwhelms you, and you want a simple-to-use platform to buy gold, you can consider checking out Versa Gold from Versa.

With Versa Gold, you are essentially investing in TradePlus Shariah Gold Tracker from Method 1 above, but at a much simpler to use Versa app.

Versa Gold Review

In addition, Versa Gold requires a low minimum investment amount of RM100, which is very beginner-friendly if you want to try investing in gold.

Get RM10 when you sign up for a Versa account via my promo code

No Money Lah Verdict + Takeaways

  • As an individual asset, gold's return is not impressive, and it does not protect against inflation.

  • However, thanks to gold's low correlation with assets like equities and bonds, gold can be a solid diversification in a portfolio.

In my opinion, investing in gold is a form of insurance for a portfolio. While assets like stocks may tumble in fear or market uncertainties, investors tend to flock to gold in such times.

In a way, owning gold as part of your portfolio keeps you sane in tough market conditions.

So what do you think? Would you consider investing in gold with this new perspective from now on?

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


Disclaimers

Any of the information above is produced with my own best effort and research. 

This post 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.


How to plan and review our finances and investments

[Sponsored] Guide: 8 steps I use to financially plan for 2023!

The new year is here and it is helpful for us to take this opportunity to plan our finances for 2023.

That said, how does one review and plan his/her finances? While there is no one standard approach, I’ve designed a review routine that is easy to follow.

In this post, I’d like to share the 8 steps that I follow to review my finances and prepare for the new year. I will also introduce how the sponsor of this post, KDI can help in streamlining our savings and investing routine.

I encourage you to spare some time over the weekend, go through the action steps and get a clearer direction of your finances for the new year!

OK, let’s get started!

p.

Part 1: Find out where I am now:

Step 1: Calculate my net worth

I’ll begin this step by calculating the value of assets that I own. Assets are things you owned that can be converted into money.

  • Examples of assets: Cash, investment properties, stocks, savings, EPF & PRS (or retirement fund equivalents).

Next, I find out how much is my liabilities. Liabilities are usually your financial commitments and debts.

  • Examples of liabilities: Mortgages, car loans, and any other form of debts.

With the value of my assets and liabilities available now, I can calculate my net worth:

  • My net worth = Total value of assets – Total liabilities

[Action Plan]

Find out the value of assets & liabilities that you own. Then, calculate your net worth by taking the difference between assets and liabilities.

KDI Content 2 Infograph pg2


Step 2: Find out my expenses & commitments

The previous year was a busy year for me. With so many things going on in life, it is inevitable that there might be new expenses/commitments that popped up throughout the year.

Hence, it is helpful to update how much, in average, am I spending every month.

To make things easier, I break down my expenses into 11 key categories:

  1. Food
  2. Groceries
  3. Insurance
  4. Travel (Petrol, Toll, Parking, Maintenance)
  5. Family
  6. Utilities (Phone bill, internet, electricity & water bill)
  7. Rent/Mortgage/Loans
  8. Entertainment (eg. Sports, Netflix, or Spotify subscription)
  9. Education
  10. Personal Care
  11. Others

[Action Plan]

List down the expenses & commitments that you have right now. Don’t worry if you do not have a record – an estimation is usually good enough.


Step 3: Figure out my overall cashflow:

Cashflow is what you have left after deducting your income from your expenses, and how much you need to save and/or invest:

  • Cashflow = Earnings (Salary or Income) – Savings & Investing Routine – Monthly expenses & commitments

Positive cashflow indicates that you have a surplus after taking into account of your commitments.

Meanwhile, a negative cashflow means that your income is not enough to sustain your current commitments.

[Action plan]

Find out your current cashflow condition.

If you encounter negative cashflow, try accommodating by adjusting your budget or seek to increase your income. Follow Part 2 as a guide.


Part 2: Adjustment & Action Plan + Questions to ask

After identifying the figures in the previous sections, I proceed to see if there are any adjustments required for 5 key aspects of my finances.

These 5 aspects are:

  • Budget & Expenses
  • Savings & Emergency Funds
  • Insurance Coverage
  • Investment
  • Estate Planning (will-writing)

As we go through the steps, I’ll guide you with several key questions so you can best reflect on your finances:

Step 4: Budget & Expenses

As we grow older, our life circumstances and priorities may change. Hence, it is helpful to explore if there is a need to adjust our budget for the new year.

Questions to ask:

Are there any changes to my daily/monthly spending this year? (Tips: Consider the impact of inflation on your everyday groceries.)

Are there any new priorities in the coming year? (Getting married? Starting a family? Taking a loan?)

Are there any unnecessary expenses & financial commitments that can be reduced/removed? (eg. Youtube or Spotify Premium)

Personal examples:

  • Utilities: For the past 3 years during the lockdown, I’ve been using a 1GB data plan – now I require a larger data plan as I am going out more often.
  • Health: This year, I am getting a 1-on-1 personal trainer to guide me in my workout. As a result, I have to adjust my budget to accommodate to the increase in expenses.
  • Traveling cost: With the reopening, I am out more often. This also means an increase in money spent on petrol/toll/parking fees.

[Action Plan & Reference]

Update/adjust your budget according to your lifestyle and/or income changes.

Meanwhile, consider using the 50/30/20 budget rule as a reference while building your budget. (50% on Needs, 30% on expenses, 20% on savings & investing)

Lastly, consider building a habit of tracking your key expenses in the new year. My go-to expenses tracking & budgeting app is MoneyLover, which I've been using for many years.

Consider using the 50/30/20 Budgeting Rule while designing your budget. (Image source: Kenanga Digital Investing Blog)

RELATED: The 50/30/20 budgeting rule from Kenanga Digital Investing (KDI) blogpost


Step 5: Savings & Emergency Fund

Having a healthy amount of savings and an emergency fund in place is a crucial part of personal finance.

In my financial review, I want to see if I have enough liquidity – ie. Cash (or savings products that can be turned into cash quickly should I need them).

Questions to ask:

Do I have enough savings & emergency fund in place?

How I approach my emergency fund & savings:

  • Emergency Fund: Ideally 6 months of monthly expenses (or more). (ie. 6 x Monthly Expenses)
  • Savings: Additional cash put aside for different purposes/expenses outside of my monthly commitments. (Holiday, Presents for family & friends, Down payment for future home/car, Education/books/courses)

[Action Plan & Reference]

If you are starting from nothing, focus on building your 6-month emergency fund first. Then, consider allocating extra savings for different purposes in life. Ideally, I'd like to keep my savings rate at about 20% of my income (or more).

KDI Save on everyday personal finance

Best place to save your emergency fund: Get 3.50% Effective Annual Rate (EAR)* with KDI Save! (*T&C applies)

When it comes to my savings and emergency fund, my preference goes to low-risk cash management funds such as KDI Save from Kenanga.

KDI Save Highlights
KDI Save offers a flexible option to save your money at a highly competitive rate. (Image source: Kenanga Digital Investing)

Why so? This is because:

  • Flexible: Unlike FD, there is no lock-in period for KDI Save. This means I can deposit & withdraw my funds anytime without penalties.
  • Attractive returns: KDI Save offers a fixed 3.50% Effective Annual Rate (EAR)*. This is on par with most FD offerings, yet without the restrictive lock-in period. [*T&C applies]
  • Free: KDI Save is FREE to use. This means zero management fees and no hidden expense ratio fees for KDI Save.
  • Fast withdrawal: Withdrawals from KDI Save will be reflected in your bank account within 1 – 2 working days.

KDI Save 3.5% EAR rate

RELATED: My KDI Save Review!


Step 6: Insurance 

Our requirement for insurance changes with life circumstances, so we need to constantly review our insurance coverage.

Questions to ask:

How much is my insurance coverage?

Is my insurance coverage sufficient?

Am I paying too much for my insurance plans?

3 key types of insurance plans + things to consider:

  • #1 Life insurance

Life insurance usually pays a lump sum of money to your beneficiaries when you pass away.

It is especially important if you have dependants in life that could not sustain themselves.

Considerations: Are you anticipating any changes in life circumstances? Consider getting/increasing your life insurance coverage especially when you have dependents/start your own family.

  • #2 Medical insurance 

Medical insurance (or medical card) usually covers the cost if you are hospitalized. 

Considerations: How long have you been holding your medical card? Is your coverage enough to cover the rising medical cost? Consider reviewing your medical card coverage on a routine basis as medical costs tend to increase with time.

  • #3 Critical illness coverage

Critical illness coverage usually helps in supplementing your income, should you encounter illnesses such as cancer and loses your ability to earn an income during recovery.

It is crucial to have critical illness coverage that is on par with your expenses. Personally, my benchmark for critical illness coverage is about 3 - 5 years of my yearly expenses.

Considerations: Have your life expenses increased over the years? If yes, consider increasing your critical illness coverage accordingly. (Ideally, 3 to 5 years of your yearly expenses)

[Action Plan & Reference]

Insurance terms and products can be overwhelming to deal with. I'd recommend getting help from a licensed financial planner to review your policies. As a benchmark, I suggest keeping your monthly insurance payment at <15% of your income.

RELATED: My experience with a licensed financial planner in Malaysia


Step 7: Investment review

Investment review is an important step in my annual financial review & planning.

Investing ensures that my hard-earned money works for me while I am focusing on my everyday life.

Questions to ask:

Am I investing consistently?

How much am I investing? If I am going to have a pay raise in the new year, should I contribute more to my portfolio?

How I invest:

Personally, I suggest treating investment as a routine.

By investing regularly (a.k.a. ‘Dollar-Cost Average) every month, I adopt a passive, long-term buy & hold strategy that allows me to focus on other important priorities in life.

Want to know why investing on a regular basis work in the long run instead of timing the market? Check out this blogpost from KDI for more info!

KDI Invest DCA vs Timing the market
Investing regularly vs timing the market - which one is better? (Image source: Kenanga Digital Investing blog)

[Action Plan & Reference]

Consider setting an amount aside for your monthly investing routine. Ideally, you'd want to invest at least 10% of your income (but feel free to adjust according to your own circumstance!).

Where and how to invest?

It is very easy to get started with investing, even if you are totally new to investing.

Consider checking out KDI Invest, a 100% AI-powered robo-advisor from Kenanga that manages your investments on your behalf while you can focus on important priorities in life.

Why KDI Invest?

  • 100% AI-Powered: KDI Invest is a 100% AI-powered robo-advisor that manages investments & risk on behalf of users. As such, there are zero human emotions (eg. fear, doubt) involved as all decisions are made based on pre-determined rules.
  • Global exposure: Gain access to globally diversified asset classes via Exchange-Traded Funds (ETFs) at low cost. In fact, your first RM3,000 invested with KDI Invest has ZERO management fee!
  • Low barrier of entry: Start investing with KDI Invest with just RM250 (and RM100 for subsequent deposits).
  • Regulated: Kenanga Digital Investing (KDI) is a financial initiative from Kenanga Investment Bank. It is regulated by the Securities Commission Malaysia (SC). This means KDI has to adhere to the best practices set by the local authority.
KDI Invest AI model
KDI Invest AI model adapts to market risks & volatility by rebalancing users' portfolio. (Source: KDI)

RELATED: Check out my real-life review on KDI Invest HERE.


Step 8: Estate Planning (Will-writing)

Estate planning such as will-writing is an important financial planning process.

Essentially, through a will, you get to legally appoint someone as an executor of your will to ensure that your assets go to the appropriate people when you pass away. Writing a will is especially important once you start your own family and/or own assets.

Questions to ask:

What would happen to all the assets (eg. stocks, properties) that I own if something were to happen to me?

[Action Plan]

Consider planning for your own will, especially when you begin to accumulate assets (eg. stocks, properties, cars).

RELATED: My will-writing experience - Writing my will at 28!


Other questions to consider:

Am I anticipating any additional changes in income and/or expenses in the new year?

Should I consider a side hustle? Am I expecting a salary increment?

Any new expenses coming up in the new year? (eg. Wedding preparation, family expenses)

Should I allocate some cash to travel, now that the world is reopening?


The best financial app to manage your savings & investments: Kenanga Digital Investing (KDI)

This post is sponsored by Kenanga Digital Investing (KDI).

Kenanga Digital Investing (KDI) is a powerful financial app built with both savings and investment features in mind.

  • KDI Invest is a 100% AI-powered robo-advisor that manages investments & risk on behalf of users. As such, there are zero human emotions (eg. fear, doubt) involved as all decisions are made based on pre-determined rules.
  • KDI Save is a low-risk cash management fund that offers a 3.50% Effective Annual Rate (EAR)*. With KDI Save, you can earn a competitive return on your cash, while enjoying the flexibility to deposit & withdraw anytime without penalties! (*T&C Applies)

Now, with the KDI app, you can streamline your savings and investment routine in one single app - making your financial routine super easy to manage in the new year!

KDI Invest Review

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KDI Referral Code: 101183

In collaboration with Kenanga Digital Investing, No Money Lah is bringing an exclusive deal for new users that are keen to start using KDI!

Use my dedicated KDI referral code – 101183, and you will get RM25 credited into your KDI Invest portfolio* when you successfully make a minimum deposit of RM250 on KDI Invest AND RM100 on KDI Save! Promo ends on 30/4/2023.

*Note: RM25 credit will be made within 60 days upon successful verification & deposit.

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No Money Lah's Verdict

So, there you have it: my 8-step routine to review and plan for my finances!

I hope this guide has been helpful in giving you a big-picture view of your finances, and a direction as we step into the new year.

As always, the best financial routine is the one that fits into your everyday life - one that you can consistently follow.

With that, I wish you the very best in the new year!


Disclaimers

This post is sponsored by Kenanga Digital Investing (KDI). 

Visual disclaimer:

This advertisement has not been reviewed by the Securities Commission Malaysia. This advertisement is for general information purposes only.

Content disclaimer:

This advertisement has not been reviewed by the Securities Commission Malaysia. This advertisement is for general information purposes only. It is not intended to constitute professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. Please also consider our risk warning and investment terms before investing with us.


SYFE USER REVIEW

Syfe Review: The most complete & customizable robo-advisor. Period.

Syfe is an established robo-advisor in Singapore that I’ve been wanting to try for some time.

From my research and time using Syfe, I can attest that Syfe is the most complete robo-advisor that I’ve come across so far. Regardless if you are a beginning investor, or one that requires complete control & customization, Syfe has something just for you.

In this post, let’s have a detailed look at Syfe, and whether it is a robo-advisor that you should be trying out!

Highlights of Syfe

  • Regulated: Syfe is a robo-advisor based in Singapore, regulated by the Monetary Authority of Singapore (MAS).
  • Unique offerings: Syfe offers a diverse selection of Exchange-Traded Fund (ETF) portfolios for different investors. Of all, Syfe’s Core Equity100, REIT+, and Select portfolios are truly unique and definitely worth checking out.
  • Flexible: Anyone 18 year-old and above can open a Syfe account. There is no minimum investment amount for Syfe. In addition, users can deposit & withdraw anytime without any fees and lockup penalties.

READ: What is ETF and how to invest in it?


Regulation & Security: Is Syfe safe?

  • Syfe is regulated by the Monetary Authority of Singapore (MAS). This ensures that Syfe is operating under the best practices and guidelines set by the Singaporean authorities.
  • In addition, Syfe takes the security of funds seriously. All users’ funds in Syfe account are held in a Trust Account in DBS Bank. Meanwhile, the investments are kept in a Custodian Account through Saxo Capital Markets.
  • Most importantly, all of these are held separately from Syfe’s assets. Meaning, Syfe will not have access to users’ funds and assets, ensuring clear transparency to avoid fraud.

Syfe Portfolios (& Which Portfolio Should You Choose)

In this section, let’s look at the offerings from Syfe:

#1 Syfe Core Growth, Core Balanced, Core Defensive

The first offering from Syfe is the Core Growth, Balanced, Defensive portfolios.

Essentially, these Core portfolios are made up of a combination of Equities, Bonds, and Gold.

From how I see it, the Core Growth, Balanced, Defensive portfolios are very similar to what’s usually offered by other robo-advisors like StashAway and Wahed.

Generally, the more risk you are willing to take, the more allocation will be placed on equities within the portfolio (Core Growth). On the other hand, lower risk portfolios (Core Balanced & Core Defensive) will have more allocation towards bonds.

Syfe Core Portfolios
Syfe Core Portfolios

(i) Core Growth Portfolio Overview (I am investing in this):

  • Higher allocation to equities (~69%). Key allocations to equity ETFs such as the QQQ (tracks the NASDAQ 100 index) and RSP (tracks the S&P500 index with equal weightage).
  • Mainly invested in the US market (~75%), followed by China (~9%)
  • For who: Investors that are looking to grow their investment, and is willing to withstand bigger fluctuations along the way.

 

Syfe Core Growth Portfolio Returns over the past 5 years (Source : Syfe)
Syfe Core Growth Portfolio Returns over the past 5 years (Source : Syfe)

(ii) Core Balanced Portfolio Overview:

  • A balanced allocation between equities (~39%), bonds (~50%), and gold (~11%). Key allocations to bond & gold ETFs such as TLT (US gov. bond) and GLD (tracks the price of gold).
  • Mainly invested in the US market (~73%), followed by China (~5%)
  • For who: Investors that are looking to grow their investment with less volatile swings in returns during the process.
Syfe Core Balanced Returns over the past 5 years
Syfe Core Balanced Portfolio Returns over the past 5 years (Source: Syfe)

(iii) Core Defensive Portfolio Overview:

  • Heavy allocation to bonds (~71%) to ensure stable returns. Key allocations to bond ETFs such as TLT and IEF (US gov. bonds).
  • Mainly invested in the US market (~71%), followed by Japan (~3%) and China (~2.5%)
  • For who: Investors that are looking to grow their investment consistently with the least fluctuations, but do not mind an overall lower return.
Syfe Core Defensive Portfolio Returns over the past 5 years (Source : Syfe)
Syfe Core Defensive Portfolio Returns over the past 5 years (Source : Syfe)

#2 Syfe Core Equity100 (I am investing in this)

The Core Equity100 portfolio is a unique offering from Syfe, as you get a portfolio with 100% allocation to equities.

This is truly different from other robo-advisors which, even at their most aggressive portfolios, still have some allocation to low-risk instruments like bonds and gold.

  • The Core Equity100 gives investors a 100% exposure to equity ETFs.
  • Key allocations to QQQ (tracks the NASDAQ 100 Index), RSP (tracks the S&P500 index with equal weightage), CSPX (tracks the S&P500), and more.
  • Mainly invested in the US market (~76%) and China (~13%)
  • For who: Investors that are looking to aggressively grow their investment, and do not mind taking bigger than usual swings in the market.
Syfe Core Equity100 returns over the past 5 years. (Source: Syfe)
Syfe Core Equity100 returns over the past 5 years. (Source: Syfe)

With the Core Equity100 portfolio, Syfe employs a smart beta methodology. This methodology optimizes for outperformance by considering different factors and risk elements.

Simply put, the Core Equity100 portfolio is the most aggressive (and risky) among all Core portfolios from Syfe.


#3 Syfe REIT+ Portfolios

REIT+ is another offering unique from Syfe. Through Syfe REIT+ portfolios, investors get to invest in a basket of Singapore’s Real Estate Investment Trusts (SREITs).

  • REIT+ tracks the SGX’s iEdge S-REIT Leaders Index, which measures the performance of the most liquid SREITs.
  • REIT+ invests in the 20 largest SREITs, such as Mapletree Commercial Trust and Ascendas REIT.
  • For who: Singapore’s REIT market is one of the most mature REIT markets in Asia. SREIT’s 0% withholding tax on dividends is especially attractive for dividend investors. In other words, investors that seek consistent passive income via dividends can consider giving REIT+ a try.

Another thing to note is there are 2 REIT+ offerings from Syfe:

(i) 100% REIT portfolio:

100% allocation on SREITs.

  • 2020 Dividend Yield: 4.5%
  • Performance from 2012 – 2021 (year-to-date)
Syfe 100% REIT Returns (2012 - 2021) (Source: Syfe)
Syfe REIT+ 100% REIT portfolio returns (2012 - 2021) (Source: Syfe)

(ii) REITs with Risk Management:

A minimum 50% allocation to SREITs, while the rest is being allocated to Singapore Gov. Bonds (Nikko AM's ABF Singapore Bond Index Fund) to cushion for market fluctuations.

  • 2020 Dividend Yield: 3.3%
  • Performance from 2012 – 2021 (year-to-date)
Syfe REIT+ with risk management portfolio returns (2012 - 2021) (Source: Syfe)
Syfe REIT+ with risk management portfolio returns (2012 - 2021) (Source: Syfe)

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

READ MORE: Introduction to Singapore REIT (SREIT)


#4 Syfe Cash+

Syfe Cash+ is extremely similar to the likes of StashAway Simple and Versa in Malaysia. It is a flexible alternative to conventional Fixed Deposit (FD), with a projected return of 1.5% per annum.

  • Cash+ is a portfolio made up of low-risk instruments like Money Market Funds and Bonds.
  • No management fee: Unlike other portfolios, Syfe does not charge a management fee to save your money on Cash+.
  • Automated Recurring Transfer: Through Cash+, investors can set up automated recurring transfers to & from other Syfe portfolios. This is very convenient for investors with a sum of money, but prefer to dollar-cost average instead of invest one-off into their Syfe portfolios.

#5 Syfe Select (Themes)

Syfe Select Themes allow investors to choose a portfolio around specific themes, namely:

(i) ESG & Clean Energy:

Invest in companies that are at the forefront of all environmental, social, and corporate governance (ESG) criteria. ETFs aligned to clean energy and water sustainability make up half of the portfolio.

  • Annual Returns over the past 5 years: 20.23%/year
  • Key Allocations: ESGE (exposure to large & mid-cap ESG companies in emerging markets), ESGD (exposure to ESG companies in developed markets), and more.
  • Risk rating: 4 (High)
  • For who: Investors looking to tap into the trending awareness towards ESG companies.
Syfe Select - ESG Portfolio 3Y & 5Y returns (Source: Syfe)
Syfe Select - ESG Portfolio 3Y & 5Y returns (Source: Syfe)

(ii) Disruptive Technology:

Invest in companies with leading-edge technologies such as AI, robotics, cloud computing, and more.

  • Annual Returns over the past 3 years: 25.22%/year
  • Key Allocations: ESPO (exposure to companies involved in video game & eSports development), BOTZ (exposure to companies involved in robotics & AI), and more.
  • Risk rating: 5 (Very High Risk)
  • For who: Investors looking to ride the huge growth potential of the disruptive tech industry, while do not mind taking larger risks.
Syfe Select - Disruptive Tech Portfolio 3Y returns (Source: Syfe)
Syfe Select - Disruptive Tech Portfolio 3Y returns (Source: Syfe)

(iii) Healthcare Innovation:

Invest in companies that are at the forefront of healthcare technologies such as genomics, biotech, and more.

  • Annual Returns over the past 5 years: 20.23%/year
  • Key Allocations: XLV (exposure to companies involved in healthcare equipment, biotech, and more), IBB (exposure to companies involved in biotech for new cures for diseases), and more.
  • Risk rating: 4 (High Risk)
  • For who: Investors looking to tap into the increasing demand of health/medical tech advancement.
Syfe Select - Healthcare Innovation Portfolio 3Y & 5Y returns (Source: Syfe)
Syfe Select - Healthcare Innovation Portfolio 3Y & 5Y returns (Source: Syfe)

(iv) China Growth:

Invest in the huge growth potential of China consumer & tech sectors.

  • Annual Returns over the past 5 years: 17.23%/year
  • Key Allocations: CNYA (exposure to domestic Chinese companies traded on Shanghai or Shenzhen Stock Exchange), MCHI (exposure to companies in the top 85% in market cap of the Chinese equity market), and more.
  • Risk rating: 4 (High Risk)
  • For who: Investors looking to tap into the huge growth potential in China, while also accepts the risks involved in investing in China.
Syfe Select - China Growth Portfolio 3Y & 5Y returns (Source: Syfe)
Syfe Select - China Growth Portfolio 3Y & 5Y returns (Source: Syfe)

(v) Global Income:

Invest in high-yield bonds for consistent income.

  • Annual Returns over the past 5 years: 5.01%/year
  • Target gross dividend yield of 4.25% per annum
  • Key Allocations: CEMB (exposure to emerging market corporate bonds), SHYG (exposure to US short-duration corporate bonds), and more.
  • Risk rating: 3 (Moderate Risk)
  • For who: Investors looking to generate consistent income from the market.
Syfe Select - Global Income Portfolio 3Y & 5Y returns (Source: Syfe)
Syfe Select - Global Income Portfolio 3Y & 5Y returns (Source: Syfe)

#5 Syfe Select (Custom)

If you are looking to 100% take charge of your ETF selections, then you are going to love Syfe Select Custom.

Essentially, you get to construct your own portfolio by choosing 8 ETFs out of 100+ ETFs offered by Syfe. In addition, you get to decide on the weightage/% allocation of each ETF in the portfolio.

In other words, this is as close as you can get to construct your own ETF portfolio without opening a broker!

You may be wondering: 

Why not just open a broker and build my portfolio myself? 

I've reached out to Syfe to inquire about this. Apparently, Syfe invests our funds into the institutional share class of the underlying funds, which retail investors do not normally have access to. Essentially, the institutional share class of these funds has lower management fees and expense ratios.

In other words, when you construct your portfolio via Syfe, your investing cost should be lower compared to buying your own ETFs via a broker. (according to Syfe)

Both Syfe Select Custom and Themes are new offerings from Syfe and they totally deserve an expanded discussion in my future articles.

Users can build their customized portfolio from the 100+ ETFs  & funds offered by Syfe. (Source: Syfe)
Users can build their customized portfolio from the 100+ ETFs & funds offered by Syfe. (Source: Syfe)

Syfe Pricing & Fees

Syfe pricing is clear and transparent: the more you invest, the more affordable it gets. These fees are deducted monthly from a small cash component set aside by Syfe when you deposit your funds.

Pricing Tier

Blue

Black

Gold

Private Wealth

Min. investment sum

< SGD 20,000

SGD 20,000

SGD 100,000

SGD 500,000

Management fee per year

0.65%

0.5%

0.4%

0.35%

Some other perks include:

  • No additional charges are needed to open a new portfolio.
  • No charges on deposits and withdrawals.
  • Dividends are automatically re-invested.

Aside from Syfe management fee, there are 4 other fees that you should be aware of. These fees are not charged by Syfe, but by 3rd parties (it’s the same for all other robo-advisors too):

  • ETF management fee by ETF providers (0.15 – 0.24%/year)
  • Currency conversion fees
  • US SEC charges during sell transactions
  • SGX clearing & trading access fees for REIT+ portfolios

3 things I like about Syfe

#1 Diverse selection of portfolios

One thing that’s truly unique to Syfe is you are almost certain to find something that suits your investing needs:

  • For beginners, or investors that would like to have a hands-off approach to investing, Syfe’s Core portfolios are a great start.
  • For investors looking to invest for passive income, Syfe REIT+ and Global Income thematic portfolios are perfect.
  • For investors with higher risk preferences, Syfe Core Equity100 and thematic portfolios can be a good choice.
  • If you are looking to have some or complete customization, you’ll like Syfe Select’s Theme and Custom portfolios.

Of all the robo-advisors that I’ve used and reviewed, Syfe is no doubt at the forefront when it comes to offerings and customizability.

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#2 Flexible & Low Barrier of Entry

With Syfe:

  • There is no restriction on the minimum investment amount. This means Syfe is especially beginner-friendly to investors with small capital.
  • Syfe is also extremely flexible. There is no lockup on your investments and you are free to deposit & withdraw at any time.
  • Furthermore, there is no limit on how many Syfe portfolios that you can open.

This gives great flexibility for users to invest or save for different financial goals using multiple portfolios on Syfe.

As an example, you may want to invest in a travel fund and also a car fund, but you do not want to mix these funds up. With Syfe, you can create multiple portfolios to differentiate the funds from each other.

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#3 Affordable fees

Investing via Syfe is affordable. The management fees charged by Syfe is much lower relative to conventional unit trusts.


3 things I wish Syfe could improve on:

As much as I like Syfe, it is not perfect. There are things that I hope they can improve on when it comes to convenience for Malaysian users.

#1 Malaysians can only open an account with a valid passport

Since Syfe is a Singaporean-based company, Malaysian users will have to use a valid passport to open an account (or Employment Pass (EP)/S Pass/Work Pass if you work in Singapore).

There is no option to open an account via a Malaysian IC (I hope they allow this in the future).

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#2 It’s expensive to fund Syfe with a local bank account (Use Wise/CIMB SG instead)

Funding Syfe account via local banks’ Foreign Telegraphic Transfer (FTT) can be expensive.

A typical FTT will incur FTT fees (~RM10), FX exchange rate (MYR to SGD), and intermediary banking fees (~SGD30-50), which is SUPER expensive and inefficient.

Nevertheless, I have come out with a guide on how you can fund your Syfe account via Wise, or a Singapore bank account, where you can skip the expensive intermediary banking fees.

READ: Detailed guide on how to fund your Syfe account via Wise or a Singapore bank account.

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#3 It’s expensive to withdraw from Syfe directly to a local bank account 

Likewise, withdrawing from Syfe directly to a local bank account is also expensive. FX exchange rate (SGD to MYR) and Telegraphic Transfer fees will be charged (SGD35 Cable fees + 0.125% commission), which is not a good deal by any means.

In addition, while it is possible to fund your Syfe account with Wise, it is not possible to withdraw funds from Syfe to Wise.

The only free alternative here is to execute withdrawal to a Singapore bank account, and if required, initiate a transfer back to your Malaysia bank account.

READ: How to withdraw your funds from Syfe to a Singapore bank account

READ: Detailed guide on how to open a CIMB SG bank account online


How to open a Syfe account in under 5 mins

Opening a Syfe account is simple and straightforward. To start, prepare the documents below to make the account opening experience smoother:

  1. For Malaysians, you’ll need a picture (front & back) of your passport (must be a valid passport)
  2. Utility bill (eg. Phone bill/water or electricity bill) as proof of residency.
  3. Tax Identification Number (TIN) (if you don’t have one you can justify why – more on this in Step 7).

Step 1: Install the Syfe app

Click HERE to install the Syfe app. Once you are done, open the Syfe app and you’ll be prompted to open an account.

Step 1: Install and create a Syfe account

Step 2: Start by selecting a portfolio of your choice.

Don’t worry if you haven’t made up your mind as you can still change the portfolio after that.

Step 2: Select a portfolio to start with. you can always change this later after you open your account.

 Step 3: You’ll be asked for your personal info (eg. Age) and investment preferences (investment goal).

Step 3: Select 'Foreign national residing outside of SG' if you are from Malaysia.

Step 4: You’ll be shown the details of your chosen portfolio.

Again, don’t worry as you can always set up a new portfolio after opening your account.

Syfe Account Opening Guide
Step 4: You'll be shown the details of your selected portfolio.

Step 5: Create an account and click ‘Sign Up’

p.s. Use my exclusive promo code 'NOMONEYLAH' and enjoy 100% off your management fees for the first 6 months!

Syfe Account Opening Guide
Use my Syfe promo code 'NOMONEYLAH' to enjoy 100% off your management fees for the first 6 months!

Step 6: Key in your personal details (name, address, employment status, income details)

Syfe Account Opening Guide
Since we are not from SG, we need to verify our identity manually.

Step 7: Upload documents & provide your Tax Identification Number (TIN)

Don't worry if you do not have a TIN number. Let's say you are a student, just justify that you are still a student and you are not required to have a TIN number.

Syfe Account Opening Guide
Upload the documents that you have prepared at the start as proof of your identity.

Step 8: Sign Customer agreement and W-8BEN* form

*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 clients who want to trade the U.S. markets, they will need to complete this form.

Syfe Account Opening Guide
Accept the customer agreement and W-8BEN form.

And that’s it! You have opened your Syfe account. In the next section, I'll share a step-by-step guide on how to fund your Syfe portfolio.


How to Fund & Withdraw Funds from Syfe

Funding and withdrawing from your Syfe account can be done either via your local bank account (not recommended), Wise (funding only), or a Singapore bank account.

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


Exclusive Syfe Promo Code – NOMONEYLAH

No Money Lah is now working with Syfe to bring the best deal for No Money Lah’s readers.

If you are keen to give Syfe a try, consider using my promo code ‘NOMONEYLAH’ to open a new account. Doing so, you’ll receive 100% off your management fees for up to 6 months!

[Disclaimer: If you use my promo code ‘NOMONEYLAH’, and make an initial deposit of SGD1,000 (or more) to your selected Syfe portfolio (Core/REIT+/Select/Cash+), No Money Lah will receive a small referral. This will help sustain the blog to keep producing quality content like this.

Of course, this is optional and you are free to use the promo code and deposit any amount you prefer.]

Open a Syfe Account Today!


No Money Lah’s Verdict

So, what do you think? Are you impressed by the offerings from Syfe? 

I sure do! As someone that has tried different robo-advisors in the past, Syfe is certainly the most complete robo-advisor when it comes to offerings and customizability.

Regardless of your investment needs & preferences, I am almost certain that you’ll find a portfolio that suits your need via Syfe. Personally, I am starting to invest a consistent amount into my Syfe portfolios (Core Growth and Core Equity100) monthly - so I will certainly follow up with any new updates moving forward!

If you don’t mind the slight hiccup with the funding and withdrawal process, I am sure you will find Syfe extremely flexible and reliable. 


Disclaimers:

Past return is not indicative of future performance. Materials are not and should not be construed as financial advice nor an offer to sell or the solicitation of an offer to purchase or subscribe for any products or services. All forms of investment carry risks and you should independently assess whether the products and services are suitable for you based on your specific financial situation. This advertisement has not been reviewed by the Monetary Authority of Singapore.

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


StashAway Simple vs Versa vs KDI Save vs T&G GOinvest

Best FD Alternatives: StashAway Simple vs Versa Cash vs KDI Save vs TNG GOinvest

Fixed Deposit (FD) has always been the go-to place for many Malaysians to save their cash.

However, most FDs require a high deposit, and they lock in your money for a long time (+charges a penalty on early withdrawal).

That said, over the past year, we are seeing the emergence of more money market funds, which is a flexible alternative to FD over the past year.

In this article, let's compare my top 4 Fixed Deposit (FD) killers: StashAway Simple, Versa Cash, KDI Save, and TNG GOinvest!   

p.s. This is a comprehensive comparison, so feel free to use the menu below to skip to the part you are interested in reading, enjoy! 

Overview of StashAway Simple, Versa Cash, KDI Save, TNG GOInvest & BEST Invest

  • StashAway Simple is a cash management offering from well-known robo-advisor, StashAway. It is part of the offering within the StashAway app. Check out my in-depth review of StashAway Simple.

  • KDI Save is a cash management offering. It is part of the offering within the latest Kenanga Digital Investing (KDI) robo-advisor app. Feel free to read my detailed review of KDI Save.

  • GOinvest is a newly introduced cash management feature within the Touch 'n Go e-Wallet in 2022. GOinvest allows users to save and get attractive returns easily within the app.

What is a Money Market Fund?

All the products we are comparing today achieve returns on-par or higher than FD by investing in Money Market Fund (MMF).

Money market funds (MMF) are funds that invest in a mix of (i) Fixed Deposits, (ii) bonds, and highly liquid, short-term cash equivalent instruments called (iii) Money Market Instruments.

Quick Intro: Money Market Instruments

Essentially, Money Market Instruments are short-term debts issued by banks in order to accumulate short-term cash-pile to make up for the shortfall in their daily deposit reserve.

  • Simply put, MMFs are lending money to banks when they buy these Money Market Instruments. 

  • These instruments are relatively low-risk as they are backed by banks. Moreover, they are highly liquid with short maturity periods.

  • Through regular redemption of matured Money Market Instruments, it allows MMF to provide a similar rate to FDs without having to lock up users’ capital.

In short, through StashAwaySimple, Versa Cash, KDI Save, and GOinvest, you can earn a similar rate to FD through low-risk MMF without having to lock up your funds, unlike typical FDs.

They are great options if you are looking for a competitive and flexible alternative to FDs.


Similarities: StashAway Simple, Versa Cash, KDI Save & GOinvest

What are the similarities or common traits when you place your money with these apps?

1. Regulated

All StashAway, Versa, KDI, and GOinvest are regulated by the Securities Commission (SC) of Malaysia. This ensures that these services are always operating in Malaysia as per the guideline from the local authority.

2. Flexible & Low barrier of entry

Generally, most FDs require a high minimum deposit to get started. Moreover, FDs lock in our funds for a period of time and charge a penalty for early withdrawal.

In contrast, every app in this article has a low minimum deposit of RM0 (Simple), RM1 (Versa), and RM10 (KDI Save, GOinvest). 

Furthermore, they do not lock in your funds as FD does. Meaning, you are free to deposit and withdraw anytime without penalty.

In short, with a small capital, anyone can start saving flexibly and enjoy rates that are on par with FD.

3. Competitive returns to FD

As a whole, all 4 apps provide returns that are similar and/or competitive to traditional Fixed Deposits (FDs).

I will go through a detailed comparison in the next section, but safe to say they are all great alternatives to FDs.

One thing to be aware of, is none of them guarantee returns. Even though they invest in low-risk MMF, returns are still subjected to market fluctuation.

4. Not protected by PIDM

Another thing to note is that none of the apps are protected under Perbadanan Insurans Deposit Malaysia (PIDM).

PIDM is an organization that protects deposits kept in banks and financial institutions that are a member of PIDM. Conventional FDs are usually protected by PIDM.


Comparison Part 1: Returns & Fees

In this section, let’s compare the returns and fees of these apps. I will assign a winner at the end of each section:

Each app has an underlying money market fund, namely:

  • AmIncome Fund for StashAway Simple
  • Affin Hwang Enhanced Deposit Fund for Versa
  • Proprietary Money Market Instruments from Kenanga for KDI Save
  • Principal Islamic Money Market Fund for TNG GOinvest 

Below, let’s compare the returns of these funds:

StashAway Simple Versa Cash KDI Save TNG GOinvest
Return 3.3% p.a. Projected Return (AFTER fees) 3.55%
(AFTER fees)
3.5% Effective Annual Rate (NO fees) 3.28%** p.a. Projected Return (AFTER fees)
Total Annual Fees* 0.5% 0.35% FREE 0.42%
Note: Info accurate as of February 2023 (*Annual Management + Trustee Fee)

From this comparison above, I think the difference in returns between each app is minimal. (**GOinvest markets its projected return to be 3.7% p.a. BEFORE fees, so I took 3.7% - 0.42% fee to get 3.28% of projected annual return AFTER fee)

However, some of these apps have their own ongoing promo:

Promo Versa Cash KDI Save
Returns 4% p.a. promotional rate for the first RM30k until 30/6/2023. 3.5% Effective Annual Rate is for the first RM50k only. Then, 3% thereafter until RM200k and 2.5% thereafter.

Winner: Versa Cash

In my opinion, Versa Cash's 3.55% p.a. Base Net Return (+ 4% promo rate for the first RM30k) still makes it the best offering among the others.

Versa Promo Code

In the next sections, we’ll explore an equally important aspect of these apps: User Experience.


Comparison Part 2: User Experience 

In this section, we’ll explore the overall user experience of these apps, from fees, how long it takes to deposit and withdraw, and so on:

(A) Interest Payout Frequency, Minimum Deposit

As for interest payout, KDI Save pays out users’ interest on a daily basis. Meaning, you’ll receive your interest payout daily from KDI Save.

This is followed by StashAway Simple, Versa Cash, and TNG GOinvest (monthly).

  StashAway Simple Versa Cash KDI Save TNG GOinvest
Interest Payout Frequency Monthly Monthly Daily (W) Monthly

(B) Deposits & Withdrawals

All 4 apps do not charge any fees on deposits and withdrawals. In addition, all of them have a low barrier for deposits, of which I think the differences are negligible.

As such, an important discussion here would be how fast we can receive our money in our bank account during a withdrawal.

Of course, the earlier we can receive our funds, the better:

  StashAway Simple Versa Cash KDI Save TNG GOinvest
Min. Deposit No min. deposit RM1 RM100 initial deposit (RM10 thereafter) RM10
Deposit Speed 2-3 business days 1-2 business days 1-2 business days 2 business days
Withdrawal fee & Speed No. 3-4 business days No. 1-2 business days No. 1-2 business days No. 2 business days
Min. Withdrawal Amount No. RM50 RM10 RM10

When it comes to speed, KDI Save and Versa Cash lead with 1-2 days withdrawal. That said, from personal experience, I'd give withdrawal speed to KDI Save as it usually processes withdrawals faster than Versa Cash.

Another less-talked-about comparison would be the minimum withdrawal amount. Versa has the highest minimum withdrawal amount of RM50, followed by KDI Save and GOinvest (RM10). Meanwhile, Simple does not have such restrictions in place.

In my opinion, there is no clear edge for either app in this comparison. That said, if you prefer that have access to your cash faster, KDI Save is the way to go.

2d. User-Friendliness

I enjoy using well-designed apps. For me, I genuinely enjoy using Versa and StashAway Simple as their navigation is straightforward and works as intended.

In particular, for cash management & saving purposes, Versa nailed it in terms of simplicity as it is a pure cash management app.

2e. Others (Shariah-Compliance)

In this comparison, only TNG GOinvest is shariah-compliant while the rest do not come with such compliance.

Winner: KDI Save and Versa Cash

KDI Save wins in its fast withdrawal speed and daily payout frequency, while Versa Cash wins in its superior user experience.


Comparison Part 3: Special features/promo

  • Limited-Time Promo: Get up to 3.5% on your savings (KDI Save)

For a limited time only, get 3.5% Effective Annual Rate (EAR) when you save with KDI Save!

Do note that the promotional rate of 3.5% EAR is tiered, as of below:

Deposit amount Rate
First RM50,000 3.5% EAR
> RM50k – 200k 3.0% EAR
> RM200k

2.5% EAR

KDI Invest Promo Code

  • Limited-Time Promo: Get up to 4% on your savings! (Versa Cash)

Looking to get more out of your cash? Until 30/6/2023, all Versa Cash users are eligible for a promotional rate of 4% on their cash!

How it works:

  1. Versa Cash's 4% promotional rate is applicable to all new & existing Versa Cash users.
  2. The promotional rate is automatically applied to the first RM30,000 in your Versa Cash account. Any subsequent balance above RM30,000 will continue to earn Versa Cash’s base net return rate of 3.55% p.a.
  3. Promotional period: Ending 30/6/2023
  4. Refer to the full T&C for more info.

I think this is GREAT news if you are looking for a higher rate for your savings! Remember, there is no lock-in period for Versa Cash and you are free to withdraw your funds anytime! 

Use my dedicated Versa referral code – VERSANML3, and you will get RM10 credited into your account* when you successfully make a minimum deposit of RM100 or more. That’s an instant 10% return on your investment.

Open a Versa account today!

  • Investment integration (StashAway)

One thing I love with StashAway is its seamless savings (StashAway Simple) and investment (StashAway) integration.

So, let’s say you have RM50,000 in cash and would like to invest them. However, you do not want to invest the whole RM50,000 at once and would like to spread it over time (dollar-cost average).

Through the StashAway app, you can place your funds in Simple (low-risk + earn stable interest), then automate a weekly or monthly transfer from Simple to your main StashAway investment portfolio.

I think this is a brilliant feature from StashAway, which is one of the reasons why it is my favorite go-to robo-advisor at the moment. 

SA Simple Transfer from Simple to main Portfolio
Users can shift funds flexibly from Simple to their main StashAway investment portfolio.

Verdict: Which FD alternative should you choose? 

Personally, I’ve been using all Versa Cash, Simple, KDI Save, and GOinvest. All platforms are unique in their own way. Question is, which one should you use?

#1 Versa Cash: For pure savings purposes

Versa as a pure cash management app offers a straightforward user experience. Its underlying low-risk money market fund is also a fantastic alternative to FD.

As a whole, if you are looking for a low-risk way to save your cash, I highly recommend Versa.

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#2 KDI Save & StashAway Simple: For savings & investing

StashAway and KDI are robo-advisors that offer both cash management (Simple & KDI Save) and investment services (StashAway & KDI Invest). 

Within both app, users can easily transfer money from their savings to investments, which is really convenient.

Furthermore, I think KDI Save and StashAway Simple are equally capable alternatives to FD for savings purposes. 

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#4 TNG GOinvest: If you need shariah-compliancy

TNG GOinvest is the only two shariah compliant fund among all.

While it is certainly not the best option, I think it still provides the benefits of low barrier of entry & flexibility to users looking for a shariah-compliant alternative to FD.


If you find this post useful, do consider using my promo codes/referral links to open your account(s)!

This will greatly help me in sustaining my blog and keep on working on quality content like this one: 

  • KDI Referral Code: 101183

Use my dedicated KDI referral code – 101183, and you will get RM25 credited into your KDI Invest portfolio* when you successfully make a minimum deposit of RM250 on KDI Invest AND RM100 on KDI Save! Promo ends on 30/4/2023. 

*Note: RM25 credit will be made within 60 days upon successful verification & deposit.

Open Your KDI Account HERE.

KDI Save and KDI Invest Promo Code

  • Versa Referral Code: VERSANML3

In collaboration with Versa, No Money Lah is bringing an exclusive deal for new users that are keen to start saving or investing with Versa!

Use my dedicated Versa referral code – VERSANML3, and you will get RM10 credited into your account* when you successfully make a minimum deposit of RM100 or more. That’s an instant 10% return on your investment.

Open Your Versa Account HERE.

Versa Cash promo code

  • StashAway Referral Link:

No Money Lah is working with StashAway to bring new users an exclusive 50% off your fees for the first RM100,000 invested for 6 months.

To be eligible for this deal, sign up for your account through my StashAway referral link HERE. (or HERE if you are from Singapore)

StashAway Simple Review - Get up to 3% p.a. on your savings with StashAway Simple!
StashAway Simple Review - Get up to 3.3% p.a. on your savings with StashAway Simple!

Disclaimers:

Investment in a money market fund is not the same as placement in a deposit with a financial institution. There are risks involved and investors should consult a financial planner before making any investment decisions.

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


2023 No Money Lah Freedom Fund Dividend Update

[Freedom Fund] 2023 Monthly Dividend Income (Jan Update!)

In this post, you'll see my monthly dividend income updates for 2023. 

My goal is to invest a portion of my funds to build a RM1,000/month passive income portfolio (and eventually RM4,000/month).

Through this journal, you'll see my progress month by month - and I wish you will find inspiration to start your dividend investing journey too! Let's go!

Related Post: If you like reading my journey, I'm sure you'll like the posts below as well:

If you enjoy following my dividend investing journey and would like to learn more, subscribe to my FREE newsletter and I'll be sending you the most updated content every week! 

January 2023 Dividend Income Update

For the first month of 2023, I received RM68.53 in dividend income, which is a decent increase over the RM10.88 that I received last year! 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.68
Harvest Tech Achievers Growth & Income ETF HTA CAD4.93 RM14.60
Purpose Bitcoin Yield ETF BTCY CAD1.79 RM5.69
Purpose Ether Yield ETF ETHY CAD1.96 RM6.23
Harvest Tech Achievers Growth & Income ETF (USD) HTA.U USD6.21 RM26.33
Total Dividends Received RM68.53

[Note] Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.24
  • SGD1 = RM3.23
  • CAD1 = RM3.18
  • HKD1 = RM0.54

Dividend breakdown by month & year:

Dividend breakdown by currency:

Jan 2023 Wrap-Up + Thoughts:

The new year has been very eventful thus far.

My grandma passed away the week before CNY (peacefully) and the unusually chilly weather of this CNY got me sick for the rest of the month.

In times like this, my conviction to build a low-maintenance dividend income portfolio (ie. my Freedom Fund) only grew stronger.

Why? Because life is full of unexpected incidents. With income automation, it helps relieve the stress and anxiety that I need to rush back to work during difficult moments in life.

Having choices in life is a luxury that one needs to intentionally prepare for as it does not come without prior effort.

Regardless, thanks for reading and I hope you'll continue following my journey and find value in my content!

p.s. You can check out my latest Freedom Fund portfolio HERE.

  • Dividend Income (Jan): RM68.53
  • Dividend Income (2023): RM68.53

Versa Cash Review: A Great Alternative to Fixed Deposit (FD)!

Fixed Deposit, or FD, has always been people’s go-to way to save or deposit extra cash. The problem is, it locks your money in for a long period of time, or requires a high initial deposit to start with.

In this article, let’s look into Versa Cash, a great alternative to FD in Malaysia. Personally, I’ve been using Versa Cash since 2021 and I absolutely love it! In this post, let’s explore if Versa is for you! 

[NEW: Get 4% promo return rate with Versa Cash, ending 30/6/2023! Find out more at the end of this post!]

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Highlights of Versa Cash

Established in 2021, Versa Cash is a digital cash management service that provides users competitive returns like FD, but without the troublesome restrictions:

  • Regulated: Versa is regulated by the Securities Commission (SC) of Malaysia.
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  • Competitive Return: Through Versa, users can earn a base net return of 3.55% per annum, which is on-par with the rates of Fixed Deposit (FD).
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  • Low Risk: The underlying fund of Versa is the Affin Hwang Enhanced Deposit Fund. It is a money market fund that invests users’ money in highly liquid & low-risk cash instruments.
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  • Flexible & Low Barrier of Entry: Malaysians aged 18 and above can start saving or investing via Versa from as low as RM1. Withdraw anytime without being charged penalty fees.
Versa Cash 4% promo rate
Get 4% on your savings with Versa Cash – limited time only!

How does Versa Cash work?

So, how exactly is Versa Cash able to deliver returns that are on-par with FD?

This is possible because Versa helps invest users’ cash into money market funds (MMF). MMFs are funds that invest in Fixed Deposits and highly liquid, short-term cash equivalent instruments called Money Market Instruments.

Essentially, Money Market Instruments are short-term debts issued by banks in order to accumulate short-term cash-pile to make up for the shortfall in their daily deposit reserve. Simply put, MMFs are lending money to banks when they buy these Money Market Instruments.  

These instruments are relatively low-risk as they are backed by the banks. Moreover, they are highly liquid with short maturity periods. Through regular redemption of matured Money Market Instruments, it allows MMF to provide a similar rate to FDs without having to lock up users’ capital.

For Versa, the underlying MMF that they invest in is the Affin Hwang’s Enhanced Deposit Fund. It is a low-risk MMF by Affin Hwang Asset Management.

In short, through Versa Cash, you can earn a similar rate to FD through low-risk MMF without having to lock up your funds, unlike conventional FDs. It is a great choice if you are looking for a competitive and flexible alternative to FDs.

Versa Homepage
Versa is a new digital cash management app that gives competitive returns on par with FDs. (Source: Versa’s website)

Is Versa Cash Safe to Use?

When it comes to regulation, Versa is regulated by the Securities Commission (SC) of Malaysia. This ensures that Versa is always operating in Malaysia as per the guideline from the local authority. 

As for the safety of funds, the cash deposits from users are held by a third party (trustee), which is HSBC (Malaysia) Trustee.

In other words, your deposits to Versa are separate from Versa’s company finances. As such, this ensures no deposits can be used for fraudulent purposes and you will always have full access and claim to them no matter what happens to Versa.


Versa Cash Fees & Charges

As a digital cash management platform, Versa Cash does not charge a fee to users. That said, the underlying MMF, Affin Hwang’s Enhanced Deposit Fund, does charge reasonable annual fees, as shown below:

% per annum
Management fee per annum

-0.30%

Trustee fee per annum

-0.05%

Base net return per annum (AFTER fees)

3.55%

Next question: Are there any fees on fund withdrawal via Versa?

Unlike FDs, there are no charges when you withdraw your funds from Versa. Withdrawals are expected to be reflected within 1-2 business days depending on the time of withdrawal (ie. before or after 2:30pm during business days).

At this point, perhaps a question that you have in mind is “So how does Versa make money?”.

Aside from Versa Cash (which is free to use), Versa also offers investment services via Versa Invest. Through Versa Invest, Versa will charge a small management fee which is their key income source. 

READ MORE: Versa Invest Review


3 things I like about Versa Cash

#1 Performance on par with conventional Fixed Deposits (FDs)

Through Versa, interests are compounded daily and interest payout is made every month, which is re-invested into user’s fund.

All of this combined, through its underlying Affin Hwang Enhanced Deposit Fund, Versa offers a base net return of 3.55% return per annum (AFTER fees) for users.

versa cash 3.55% base net return
Versa Cash offers a base net return of 3.55% p.a.

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#2 Flexible & Low barrier of entry

2 amazing features about Versa are:

  1. Low barrier of entry: You can start investing or saving with Versa from as low as RM1. Even better, using my exclusive referral code VERSANML3, you can get RM10 credited into your Versa account when you make a minimum deposit of RM100!
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  2. Flexible: There are no charges to open a Versa account. In addition, you can withdraw your funds anytime and there are no fees on withdrawal.

Combined, both these features make a compelling edge against conventional FDs. Reason being, FDs usually have higher minimum deposits & they tend to lock in users for a period of time (and charge a penalty for early withdrawals).

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#3 Simple & clean user experience (suitable even for my retired mom!)

Perhaps my favorite experience with Versa is their simple and clean user interface.

As a simple digital cash management platform, I enjoy the design of the app that clearly shows the capital invested and payout.

In fact, when my retired mom was looking for a better FD alternative to save her idle cash, I recommended Versa without hesitation. This is because I know she can totally navigate the app with clarity & confidence.

Versa UI 2
Versa provides a simple and intuitive user experience that anyone can understand easily.

Risks + What You Need to Know Before Investing in Versa Cash

In this part, let’s look at 3 things that you need to be aware of while investing your money with Versa:

  1. Market risk

While being a relatively stable investment, investing in Money Market Fund (MMF) via Versa still presents exposure to market risk.

One such risk is the fluctuation in interest rate. As an example, if Bank Negara Malaysia (BNM) increases interest rate, MMF is likely going to generate higher returns. On the flip side, if BNM reduces interest rate, it’ll also affect the returns of MMF as a result. 

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  1. Not protected by PIDM

While investing in Versa, it is important to remember that your fund is not protected by Perbadanan Insurans Deposit Malaysia (PIDM).

PIDM is an organization that protects deposits kept in banks and financial institutions that are a member of PIDM. Conventional bank FDs are usually protected by PIDM.

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  1. Not shariah-compliant

In addition, Versa’s underlying MMF, Affin Hwang Enhanced Deposit Fund is not shariah compliant.

Hence, this is something that you need to be aware of prior to investing with Versa.


Improvement: ONE Feature Versa HAS to Add

As a Versa user myself (also having opened an account for my mom), there is one handy feature that I think Versa Cash lacks: Automatic Scheduled Transfer.

Being a digital cash management platform, I think having the convenience for users to automate their deposits every week/month should be a fundamental feature.

While I enjoy using Versa, I think this improvement will make Versa a more complete financial app.


Eligibility + Is Versa Cash for You?

Versa is open to Malaysian citizens who are 18 years old and above with an NRIC/MyKad. This means that even young Malaysian adults can start building good financial habits by saving/investing from their phones – neat!

That said, is Versa for you?

To answer this question, it is best to first know what Versa is NOT:

  • Versa Cash does not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect mutual fund/robo-advisors-like returns.
  • Versa Cash does not guarantee returns. Even though it invests in low-risk MMF, returns are still subjected to market fluctuation.

Hence, in my opinion, Versa Cash is great for:

  1. People looking for a flexible alternative to FD & typical savings account for general savings
  2. People looking to save for a specific goal (eg. house, car, wedding)
  3. People with extra cash and want to save it for the short-term

Versa Promo Code: VERSANML3

In collaboration with Versa, No Money Lah is bringing an exclusive deal for new users that are keen to start saving or investing with Versa!

Use my dedicated Versa referral code – VERSANML3, and you will get RM10 credited into your account* when you successfully make a minimum deposit of RM100 or more. That’s an instant 10% return on your investment.

Open a Versa account today!

Versa Promo Code


How to open a Versa Account

Creating a Versa account is simple and straightforward:

Step 1: Click HERE to install the Versa app.

Remember to apply referral code ‘VERSANML3’ for an exclusive RM10 account-opening reward!

Open a Versa account today!

Step 2: Start your account opening process by keying in the necessary details such as a new display name, email address, and password. 

Versa Account opening
Versa Account Opening process is simple & straightforward

Step 3: You’ll go through a simple identification process where you’ll be asked to verify your mobile number, IC, and personal details. This is a required process by the regulators to make sure it’s the real you that’s opening an account.

Step 4: It’ll take about 2-3 business days to verify your account. Once that’s done, you can start investing in Versa by making your first deposit!

Versa Deposit
Once your account has been verified, you can start depositing funds to Versa!

Versa or StashAway Simple or KDI save?

In terms of offering, Versa’s closest competitor is certainly KDI Save and StashAway Simple. Both offer users flexible and low-barrier access to MMF that pays competitive FD-like rates.

I think this comparison deserves a full article on its own so I’ll attach a link HERE when I come out with a comparison article real soon! 

Personally, I use both Versa, KDI Save, and StashAway Simple to save for different purposes and I am happy with them as an alternative to FD (I think you will, too!).

READ: The Ultimate FD-Killer Showdown: StashAway Simple vs Versa vs KDI Save vs TNG GOinvest


[LIMITED-TIME PROMO] Get 4% return on your savings via Versa Cash!

Looking to get more out of your cash? Until 30/6/2023, all Versa Cash users are eligible for a promotional rate of 4% p.a. on their cash!

How it works:

  1. Versa Cash’s 4% promotional rate is applicable to all new & existing Versa Cash users.
  2. The promotional rate is automatically applied to the first RM30,000 in your Versa Cash account. Any subsequent balance above RM30,000 will continue to earn Versa Cash’s base net return of 3.55% p.a.
  3. Promotional period: Ending 30/6/2023
  4. Refer to the full T&C for more info.

I think this is GREAT news if you are looking for a higher rate for your savings! Remember, there is no lock-in period for Versa Cash and you are free to withdraw your funds anytime!

Open a Versa account today!

Versa Cash 4% promo rate
Get 4% on your savings with Versa Cash – limited time only!

No Money Lah’s Verdict

So there you have it, my review on Versa! If you are looking for an FD alternative to invest/save your cash, Versa is a platform that I can wholeheartedly recommend you to try.  

Personally, I enjoyed using the platform and I think you will, too! 

Open a Versa account today!


Disclaimers

Investment in a money market fund is not the same as placement in a deposit with a financial institution. There are risks involved and investors should consult a financial planner before making any investment decisions.

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


StashAway Simple Review - Get up to 3% p.a. on your savings with StashAway Simple!

StashAway Simple Review: The Fixed Deposit (FD) Killer?

Fixed Deposit, or FD, has always been people’s go-to way to save or deposit extra cash. The problem is, it locks your money in for a long period of time, or requires a high initial deposit to start with.

In this article, let’s look into StashAway Simple, a great alternative to FD. Personally, I’ve been using StashAway Simple since mid-2020, and in this post, let’s explore if StashAway Simple is for you! 

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Highlights of StashAway Simple

StashAway Simple (or ‘Simple’) is a cash management offering from robo-advisor StashAway. It provides users competitive returns like FD, but without the troublesome restrictions:

  • Regulated: StashAway Simple is regulated by the Securities Commission (SC) of Malaysia.
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  • Competitive Return: Through Simple, users can earn up to 3.3% interest per annum, which is comparable to the rates of Fixed Deposit (FD).
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  • Low Risk: The underlying fund of Simple is the AmIncome Fund from AmFunds Management Berhad. AMIncome Fund invests in a mix of money market funds and short-term corporate bonds.
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  • Flexible & Low Barrier of Entry: Malaysians aged 18 and above can start saving or investing via Simple. There is no minimum on how much you need to save with Simple. Withdraw anytime without being charged penalty fees.

[Update Feb 2023] With the increase in interest rate by the central bank lately, StashAway Simple has also raised the returns from 3% to 3.3% per annum. 

StashAway Simple Review - Get up to 3% p.a. on your savings with StashAway Simple!
StashAway Simple Review – Get up to 3.3% p.a. on your savings with StashAway Simple!

How does StashAway Simple work?

So, how exactly is Simple able to deliver returns that are on-par with FD?

All of this is possible because Simple invests users’ cash into money market funds (MMF). MMFs are funds that invest in Fixed Deposits and highly liquid, short-term cash equivalent instruments called Money Market Instruments.

Essentially, Money Market Instruments are short-term debts issued by banks in order to accumulate short-term cash-pile to make up for the shortfall in their daily deposit reserve.

Simply put, MMFs are lending money to banks when they buy these Money Market Instruments. These instruments are relatively low-risk as they are backed by banks. Moreover, they are highly liquid with short maturity periods.

Through regular redemption of matured Money Market Instruments, it allows MMF to provide a similar rate to FDs without having to lock up users’ capital.

For Simple, the underlying MMF that they invest in is the AmIncome Fund from AmFunds Management Berhad.

In short, through Simple, you can earn a similar rate to FD through low-risk MMF without having to lock up your funds, unlike conventional FDs. It is a great choice if you are looking for a competitive and flexible alternative to FDs.

StashAway Simple Review 2022
Get up to 3.3% p.a. on your savings via StashAway Simple.

Is StashAway Simple safe to use?

When it comes to regulation, Simple is regulated by the Securities Commission (SC) of Malaysia. This ensures that Simple is always operating in Malaysia as per the guideline from the local authority.

As for the safety of funds, your funds in Simple are held by a third party (trustee), which is Deutsche Trustees Malaysia Bhd. In other words, your deposits to Simple are separate from StashAway’s company finances. As such, this ensures no deposits can be used for fraudulent purposes and you will always have full access and claim to them no matter what happens to StashAway.


StashAway Simple Performance, Fees & Charges

StashAway Simple does not charge any platform or service fee to users. That said, the underlying MMF, AmIncome Fund, does charge reasonable annual fees, as shown below:

  % per annum
Annual Management Fee – 0.75%
Annual Trustee Fee – 0.05%
Net Annual Projected Return after fees & rebate 3.3%

A thing worth noting is that StashAway does get fee rebate from AmFunds Management, likely due to the size of capital that StashAway Simple can channel to the fund (p.s. just my opinion). As such, when AmFunds Management rebates StashAway, they’ll re-distribute this full rebate to users.

SA Simple Rebate
StashAway channels the fee rebate that they get from the fund managers back to the users.

Next question: Are there any fees when you withdraw your funds from StashAway Simple?

Unlike FDs, there are no charges when you withdraw your funds from StashAway. Withdrawals are expected to be reflected within 3-4 business days.


4 things I like about StashAway Simple

#1 Returns on par with conventional Fixed Deposits (FDs)

Through Simple, returns are compounded daily and interest payout is made every month, which is re-invested into user’s fund.

All of this combined, through its underlying AmIncome Fund, Simple projects about 3.3% return per annum (after fees) for users.

[Update Feb 2023] With the increase in interest rate by the central bank lately, StashAway Simple has also raised the returns from 3% to 3.3% per annum. 

SA Simple Projected Return
StashAway Simple Projected Return

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#2 Flexible & low barrier of entry

There are 2 things that I absolutely love with Simple:

  1. Low barrier of entry: There is no minimum amount to start using Simple. Meaning, you can start investing or saving with Simple with any amount you want.
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  2. Flexible: There are no charges to open a StashAway Simple account. In addition, you can withdraw your funds anytime and there are no fees on withdrawal.

Combined, both these features make a compelling edge against typical FDs. Reason being, FDs usually have higher minimum deposits & they tend to lock in users for a period of time (and charge a penalty for early withdrawals).

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#3 Integration with StashAway main investment ecosystem

Another reason why I enjoy using StashAway is its seamless savings (StashAway Simple) and investment (StashAway) integration.

So, let’s say you have RM50,000 in cash and would like to invest them. However, you do not want to invest the whole RM50,000 at once and would like to spread it over time (dollar-cost average).

Through StashAway app, you can place your funds in Simple (low-risk + earn stable interest), then automate a weekly or monthly transfer from Simple to your main StashAway investment portfolio.

I think this is a brilliant feature from StashAway, which makes it the most versatile robo-advisor at the moment. 

SA Simple Transfer from Simple to main Portfolio
Users can shift funds flexibly from Simple to their main StashAway investment portfolio.

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#4 Intuitive user experience

As an app catered for the general public, StashAway is really simple to use.

Even if you need any help, StashAway’s customer support is one of the best I’ve ever experienced when it comes to financial products.

SA Simple in the app
Simple can be accessed easily from the StashAway app.

Risks + What you need to know before investing in StashAway Simple

In this part, let’s explore 3 things that you need to be aware of while investing your money with Simple:

1. Market risk

While being a relatively stable instrument, investing in Money Market Fund (MMF) via Simple still presents exposure to market risk.

One such risk is the fluctuation in interest rate. For instance, if Bank Negara Malaysia (BNM) increases interest rate, MMF is likely going to generate higher returns. On the other hand, if BNM reduces interest rate, it’ll also affect the returns of MMF as a result.

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2. Not protected by PIDM

While investing in Simple, it is important to remember that your fund is not protected by Perbadanan Insurans Deposit Malaysia (PIDM).

PIDM is an organization that protects deposits kept in banks and financial institutions that are a member of PIDM. Conventional bank FDs are usually protected by PIDM.

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3. Not Shariah-Compliant

Futhermore, Simple’s underlying MMF, AmIncome Fund is not shariah compliant.

Hence, this is something that you need to be aware of prior to investing with Simple.


Improvement: 2 Improvements Needed for StashAway Simple

Having been a Simple user since its launch, I think there are 3 improvements needed for Simple to compete with competitors like Versa:

1. Automatic scheduled transfer

One thing that puzzled me with StashAway is, I can schedule a routine transfer to my normal StashAway investment portfolio from my bank account, but I cannot do so for Simple.  

I think having the convenience for users to automate their deposits every week/month into Simple should be a fundamental feature.

While I enjoy using Simple, I think this improvement will make StashAway a more solid financial app.

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2. Withdrawal speed

StashAway Simple has a 3-4 business days withdrawal speed. While this is reasonable, it falls behind competitors like Versa that has a 1-2 business days withdrawal.

I think this is a space that StashAway can improve on as well.

READ: Versa Review: A Great Alternative to Fixed Deposits (FD)!


Eligibility + is StashAway Simple for you?

The minimum age required to open an account with StashAway is 18 years old. Meaning, even young Malaysian adults can start building good financial habits by saving/investing from their phones – neat!

That said, is StashAway Simple for you?

To answer this question, it is best to first know what Simple is NOT:

  • Simple does not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect mutual fund-like returns.
  • Simple does not guarantee returns. Even though it invests in low-risk MMF, returns are still subjected to market fluctuation.

Hence, in my opinion, Simple is great for:

  • People looking for a flexible alternative to FD & typical savings account.
  • People looking to save for a specific goal (eg. house, car, wedding)
  • People with additional cash and want to save it for the short-term
  • People with a stash of cash looking to invest, but would like to spread the investment across time. (StashAway & StashAway Simple is perfect for this)

StashAway Simple or Versa or KDI save?

In terms of offering, StashAway Simple’s closest competitor is certainly KDI Save and Versa. Both offer users flexible and low barrier access to MMF that pays competitive FD-like rates.

I think this comparison deserves a full article on its own so I’ll attach a link here (it’s up!) when I come out with a comparison article real soon! 

Personally, I use StashAway Simple, Versa, and KDI Save to save for different purposes and I am happy with them as an alternative to FD (I think you will, too!).

READ: The Ultimate FD-Killer Showdown: StashAway Simple vs Versa vs KDI Save vs TNG GOinvest!

Versa Cash vs KDI Save vs StashAway Simple returns


StashAway Referral link

No Money Lah is working with StashAway to bring new users an exclusive 50% off your fees for the first RM100,000 invested for 6 months.

Since it is Simple is free to use, this deal is applicable if you eventually use StashAway robo-advisor portfolio to invest.

To be eligible for this deal, sign up for your StashAway account through my referral link HERE. (or HERE if you are from Singapore)

Start Investing with StashAway Today!

EXCLUSIVE: Use my referral link to get 6 months FREE management fee up to RM100,000 invested!
EXCLUSIVE: Use my referral link to get a 6-month FREE management fee up to RM100,000 invested!

 

No Money Lah’s Verdict: Simple is the New Breakthrough

With the rise of innovations in the financial solution space, it is refreshing to keep seeing new, innovative products from robo-advisor platforms like StashAway.

In many ways, in the financial services industry, Simple is indeed the new breakthrough that consumers need. With Simple, everyday consumers can enjoy returns on par with FD without the typical restrictions. 

Personally, I have always enjoyed using StashAway, and I highly suggest you to check it out too!

 


Related: Read my full review on StashAway HERE

 


Rakuten Trade Hong Kong Stock Trading Review

Rakuten Trade Hong Kong Stock Trading Review: Affordable Way to Invest in HK!

Rakuten Trade is one of the best regulated platforms in Malaysia that offers access to local and US stocks at an affordable fee.

In late 2022, they launched access to the Hong Kong stock exchange (HKEX), which makes it easy and affordable for Malaysians to gain exposure to reputable Chinese and Hong Kong companies listed in Hong Kong.

In this post, let's dive into Rakuten Trade’s latest Hong Kong market offering, and see if this is something to try out!

Highlights of Rakuten Trade HK Stock Trading

  • Affordable brokerage fee: Rakuten Trade offers access to the Hong Kong Stock Exchange (HKEX) at a highly competitive fee, from as low as RM7/trade (for MYR trading), or a min. of HKD35/trade (for HKD trading).

  • Flexible: Invest in Hong Kong-listed stocks via Rakuten Trade in MYR or HKD, your choice.

  • Perk: FREE access to live datafeed of Hong Kong stocks.

Why invest in Hong Kong?

The HK stock market offers several distinct benefits compared to investing in the US stock market:

(i) 0% dividend withholding tax

A major benefit of investing in Hong Kong stocks is there is 0% dividend withholding tax.

Meanwhile, most non-US residents (eg. Malaysians, Singaporeans) will be charged a 30% dividend withholding tax while investing in US stocks.

In other words, if a HK stock in your portfolio pays HKD1.00 in Distribution Per Unit (DPU), you will get the full payout instead of having to deduct for withholding tax.

READ MORE: All you need to know about Dividend Withholding Tax

(ii) The easiest way to access prominent China-listed companies

Investing in HK is also the most direct and reliable way for investors to gain access to reputable Chinese companies, such as Xiaomi, Alibaba, Tencent, and more.

Examples of notable brands & companies listed in HKEX. (Photo source: Rakuten Trade)

Compared to investing in Chinese American Depositary Receipts (ADRs) listed in the US that face constant threats of delisting, investing in HKEX equivalent stocks is a more reliable way to gain exposure to Chinese companies.

Source: Reuters

Competitive brokerage fees for the Hong Kong market

Unlike most local brokers that charge unbelievably high rates for their Hong Kong market, Rakuten Trade offers the HK market at a very competitive fee.

With Rakuten Trade, users are able to trade in Malaysian Ringgit (MYR) or Hong Kong Dollar (HKD).

[Note]: When you buy HK stocks in MYR, your MYR will be automatically converted to HKD as per Rakuten Trade's exchange rate.

Below is Rakuten Trade's Hong Kong market fee structure for MYR trading and HKD trading:

Rakuten Trade brokerage fee for trading HK stocks in MYR

  Trading Value (RM) Brokerage (RM)
Below 999.99 7.00
Between 1,000.00-9,999.99 9.00
Between 10,000.00-99,999.99 0.10% of trading value
Equal & Above 100,000.00 100.00

Rakuten Trade brokerage fee for trading HK stocks in HKD

  Trading Value (HKD) Brokerage (HKD)
No Tier 0.10% of trading value Min. HKD35.00

Generally, given how Rakuten Trade structure their fees, I'd personally invest using MYR as it is cheaper compared to the min. HKD35 fee for HKD trading.

Other fees while investing in the HK market:

Aside from that, please take note that there are other fees charged by the HKEX while you trade HK stocks, as seen below:

  • Clearing fee: 0.002% of gross amount with a minimum of HKD2.00 per order or a maximum HKD100.00 per order
  • Stamp duty (Stocks): RM1.50 for every RM1,000.00 gross amount, with a maximum of MYR 1,000.00
  • Exchange fee: 0.00565% of gross amount per order
  • HKEX Stamp Duty: 0.13% of gross amount and round up to nearest integer
  • SFC Transaction Levy: 0.0027% of gross amount with a minimum of HKD0.01 per order
  • FRC Transaction Levy: 0.00015% of gross amount with a minimum of HKD0.01 per order

Rakuten Trade vs Competitors – Brokerage Fees by Trade Value

How do Rakuten Trade fees compare to locally regulated competitors?

Below, I compare the brokerage fee of Rakuten Trade to FSMOne, which both offer access to the Hong Kong market:

Trade Value Rakuten Trade (RM trading/HKD trading) FSMOne (HKD)
<RM1,000 (~HKD1,850) RM7 or HKD35.00 HKD50.00
RM5,000 (~HKD9,260) RM9 or HKD35.00 HKD50.00
RM10,000 (~HKD18,520) RM10 or HKD35.00 HKD50.00

From this, it is clear that Rakuten Trade is making foreign market access more affordable for Malaysians.


Trading experience & features:

#1 User-friendly interface

Rakuten Trade built their Hong Kong stock trading service on top of their existing trading platform.

As a long-time user, I think this is good news because Rakuten Trade’s platform is really simple to use.

Either from Rakuten Trade’s website or iSpeed app, you can switch between Malaysia, US, and Hong Kong markets easily.

Rakuten Trade Hong Kong Trading Review and Referral Link
Rakuten Trade user interface is simple to use, be it via website or app.

#2 FREE live datafeed

In addition, Rakuten Trade offers users access to live datafeed of HK stocks for FREE.

In other words, all HK stock prices are quoted live (ie. Real-Time). For many platforms, you’ll usually have to pay for live data or you’ll only get a delayed datafeed.

Rakuten Trade Hong Kong Trading Review and Referral Link

#3 Buy HK stocks in MYR or HKD

As a Rakuten Trade user, you have the choice to store HKD in your account.

This allows for the flexibility to trade HK stocks in either MYR or HKD.

#4 Live Conversion + Tight HKD-MYR Exchange Rate

Rakuten Trade offers a relatively tight HKD-USD spread for users to easily convert between both currencies within the platform.

Furthermore, the conversion process happens real-time, enabling users to convert MYR to HKD (and vice versa) with the latest rate and trade right away.

Lastly, unlike certain brokers, there are no extra fees involved in currency conversion (aside from the spread) so there are no worries about hidden fees.

Rakuten Trade Hong Kong Trading Review and Referral Link
Rakuten Trade MYR to HKD currency conversion rate (as of 1/2/2023)

#5 No charges for corporate action

Furthermore, just like trading Malaysia stocks, Rakuten Trade handles any corporate action for your HK stock investments for FREE.

In other words, you do not have to pay Rakuten Trade in order to receive dividends or execute a right issue (you may have to pay for these on some other platforms).


What u need to know about the HK market

  • HKEX Market hours

The HKEX market hour is slightly different from the Malaysia's market, as you can see below:

Session Time
Pre-Open 9am – 9:30am
Trading Session 9:30am - 12pm
Break 12pm – 1pm
Trading Session 1pm - 4pm

For the pre-open session, you can begin placing your limit orders but they’ll not be filled until the market opens at 9:30am.


2 areas of improvement

(a) Lack of basic order execution features

One thing that I found lacking while using Rakuten Trade to buy HK stocks is the missing of basic order execution features such as Market Order.

Unfortunately, the only trade execution option on Rakuten Trade is Limit Order.

  • Market Order is an execution feature that allows investors to buy or sell shares at the immediate best price. As such, it is available in most stock trading platforms that I’ve used in the past (even Rakuten Trade’s own Bursa trading)

  • Limit Order allows investors to line up their orders to buy or sell shares at a specific price or better.

While this may not be a huge issue for most investors, a lack of Market Order execution may turn off some investors that prefer not to wait for their orders to be matched, or day-traders that require immediate market execution.

Market Order vs Limit Order
Market Order vs Limit Order

(b) Limited Hong Kong stocks and no HK ETFs (but it’s improving)

Secondly, Rakuten Trade does not actually offer all of the stocks listed in the HK market. In addition, HK ETFs are not currently available on Rakuten Trade.

That said, Rakuten Trade will be gradually adding new HK stocks with time.

As of January 2023, Rakuten Trade offers about 330+ stocks listed on the Hong Kong Stock Exchange (HKEX).

While you may trade the most well-known HK stocks (eg. Xiaomi, Aibaba, Tencent) on Rakuten Trade, there are some other HK stocks that you may not find on Rakuten Trade.

[Note]: If you have a stock that you want to trade on Rakuten Trade, you can email your request to Rakuten Trade on the matter.


Who should use Rakuten Trade to buy HK stocks?

While not perfect, Rakuten Trade has offered something that all local brokers failed to do: Access to the HK stock market at a truly affordable fee via a Malaysia-regulated platform.

In my opinion, Rakuten Trade is a great option if you are:

  • Seeking for a Malaysia-regulated broker to invest in the HK stock market.
  • Looking to access the HK market at a truly affordable fee.
  • Looking for a user-friendly platform to invest in the HK stock market.

At the same time, it may not suit people that are:

  • Active day traders that require market execution (instead of limit order) or more advanced execution features.

  • Investors or traders that want exposure to more exotic stocks which are not within Rakuten Trade’s list of tradable stocks.

In short, unless you are an active trader, chances are you’ll like what Rakuten Trade has to offer.


Summary: Is Rakuten Trade a good platform to invest in the HK market?

As a whole, I think Rakuten Trade has offered Malaysians a highly affordable choice to invest in the HK market via a locally-regulated broker.

A decent fee structure, user-friendly interface, and transparent conversion rate should convince many investors to forgo the need to open a foreign brokerage account (and experience all the hassle of funding & withdrawals).

Unless you are an active day trader or you require access to less familiar Hong Kong stocks, I am certain you’ll be happy with what Rakuten Trade has to offer.

If you are keen to open a Rakuten Trade account, consider using my referral link below! For that, you’ll get:

  • 1000 Rakuten Trade (RT) points worth RM10 to offset your brokerage fee

  • + 150 RT points when you deposit a min. of RM1,000 within 5 days

  • + 150 RT points when you transfer your shares from other brokers to Rakuten Trade

  • + 1x brokerage fee rebate when you place your 1st trade within 30 days after your account is activated.

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


How to sign up to trade HK stocks via Rakuten Trade

(A) How to sign up for US stock trading if you are new to Rakuten Trade:

Step 1: Sign up for 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 1000RT points (RM10) which can be used to offset your brokerage fee! 

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 + agree to the T&C of foreign stock trading

Since you are activating foreign trading on Rakuten Trade, you will also gain access to the US market alongside HK.

Hence, spend 1 minute to share some info required to trade the US stock market (W8BEN form).

Then, agree to the T&C and 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


(B) 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!


🎁 LIMITED-TIME Rakuten Trade Promos

Perk: Enable Foreign Trading Service and get 2000 RT points (worth RM20) [Ending 31/3/2023]

Have a Rakuten Trade account but have not activated US & HK trading?

Activate foreign trading service today and receive 2000 RT points (worth RM20 of brokerage fee rebate) within 15 business days of the following month.


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.