Complete Guide: How to deposit funds to Interactive Brokers (IBKR) via Wise, Instarem, and SG Bank
In this post, let's explore the cheapest and most efficient ways to deposit funds into your Interactive Brokers (IBKR) account.
This guide is suitable for non-US residents (eg. Singapore, Malaysia, and more) - any questions feel free to leave them in the comment section at the end of this post!
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Best ways to deposit/fund your IBKR account
There are 3 key ways to fund your IBKR account, namely through (i) Direct transfer from Wise balance, (ii) Direct ACH funding via Instarem, or (iii) Funding your IBKR account through a Singapore (SG) bank account.
Method #1: Funding your IBKR account from Wise balance (Easiest)
This is my preferred way to fund my own IBKR account as I find it the most straightforward method (though not necessarily the cheapest).
Fees incurred:
- Wise transfer fee
- Currency exchange rate
Pre-requisite: Open a Wise account and make a deposit to your Wise balance
Before you begin, be sure to open a Wise account first if you do not have an account.
Step 1: Fund your Wise account
Firstly, log in to your Wise account. Select the currency that you'd like to fund your IBKR account and click 'Add'.
Then, key in the amount you'd like to add, and proceed to fund your Wise account via FPX through your own bank account.
Step 2: Log in to your IBKR account, select 'Deposit'
Select your deposit currency (for me, I choose USD), and select 'Transfer from Wise Balance'.
Step 3: Log in to your Wise account and proceed to transfer your funds
Once your Wise and IBKR accounts are linked, you can proceed with your fund transfer.
Step 4: Transfer done - now just wait for your funds to reach your IBKR account.
From personal experience, it usually takes about 1 working day for the funds to reach my IBKR account.
Method #2: Funding your IBKR account through direct ACH funding via Instarem (Cheapest)
Meanwhile, funding your IBKR account via Instarem is the cheapest option. Don't worry, the funding steps are quite simple as well.
Fees incurred:
- Instarem transfer fee
- Currency exchange rate
Pre-requisite: Open an Instarem account
Before you begin, be sure to open an Instarem account first if you do not have an account.
Open an Instarem account via my referral link by clicking on the button below, and get 200 InstaPoints (worth RM12) which can be redeemed for your money transfer (no min. transaction amount required)!
Step 1: Log in to your IBKR account, select 'Deposit'
Step 2: Select your deposit currency, then opt for 'Direct ACH Transfer from your Bank'
In this example, I am using USD as my deposit currency. But the method should work for other currencies.
A warning pop-up will appear, saying that you must deposit from a US bank account - just proceed by choosing 'Yes'.
Step 3: You'll get 3 key info - a Routing Number, Virtual Account Number, and IBKR's address (address is not displayed in the screenshot below)
Take down these details. In the next step, you will need to use these details to initiate your Instarem transfer.
Step 4: Log in to your Instarem account and begin initiating your transfer
Step 5: Transfer done - now just wait for your funds to reach your IBKR account.
From personal experience, it usually takes about 1-2 working days (sometimes even faster) for the funds to reach my IBKR account.
Once the funds are deposited in your IBKR account, you will receive an email update from IBKR.
Method #3: Funding your IBKR account through SGD via a Singapore Bank (eg. CIMB SG)
The 2nd method is an alternative for Singaporeans and Malaysian users with a Singapore bank account.
Fees incurred:
- IBKR currency conversion rate, if you want to convert your SGD to USD in IBKR
- IBKR currency conversion fee (~USD2.00 - 2.50), if you want to convert your SGD to USD in IBKR
Pre-requisite: Open a Singapore bank account (CIMB SG)
For Malaysians that wish to open a Singapore bank account, you can consider opening a CIMB SG account, which can be done 100% online.
RELATED: Guide - How to open a CIMB SG account online
Step 1: Log in to your IBKR account, select 'Deposit'
Step 2: Select SGD as deposit currency, and get instructions for 'Bank Wire'
Step 3: Key in your SG bank account details and the amount you wish to deposit
Step 4: Initiate transfer from your SG bank account
Use the bank wire instructions from IBKR to make your transfer from your SG bank account.
Log in to your bank account to initiate transfer.
Step 5: Return to your IBKR account and click 'Finish'.
That's all - now you just have to wait for your funds to arrive in your IBKR account.
From personal experience, it usually takes about 1-2 working days for the funds to reach my IBKR account.
Once the funds are deposited in your IBKR account, you will receive an email update from IBKR.
Step 6: Convert SGD to USD in IBKR
If you want to convert your SGD to USD in IBKR to trade USD-denominated stocks, you can do so with the currency conversion feature in IBKR for a small fee.
In your IBKR dashboard, select 'More'.
Use your existing currency balance to convert to USD.
There will be a currency conversion fee/commission of around USD2.00 - USD2.50.
Verdict - Funding your IBKR account is never easier
With platforms like Wise and Instarem, it is extremely convenient to fund your IBKR account at a minimal fee.
Do you have any other tips on how to fund your IBKR account? Feel free to leave your tips and thoughts in the comment section below!
Disclaimer:
This review is purely based on my personal experience and is updated as of the time of writing.
This article may contain affiliate links that will earn the blog a small fee if you click on them. This comes at no extra cost to you as a reader.
[Strategy] Dividend growth investing: Why it works
One of the most powerful dividend investments is the one that raises its dividend payout on a consistent basis.
In this post, let's explore one of the most important investing strategy as a dividend investors: Dividend Growth Investing!
Related posts:
Overview: What is dividend growth investing?
Dividend growth investing is an investing style that involves investing in assets that consistently increase their dividend (or distribution) payout.
For instance, a company has grown its dividend by paying $0.10/share in dividends in 2022, $0.12/share in 2023, and $0.15/share in 2024.
Generally, as a dividend growth investor, you can expect your dividends to grow over time.
3 basic dividend investing terms you need to know:
There are 3 dividend investing terms that you need to understand before we proceed. (p.s. Please click on each term for a more detailed explanation):
- Dividend Yield: Dividend yield is an expression of dividends in the form of percentage (%), relative to the share price.
- Distribution Per Unit (DPU): DPU refers to the dividend paid per unit of share.
- Yield-on-cost (p.s. Please make sure you understand this before proceeding): Yield-on-cost is the dividend you get from your investment, divided by the original cost of the investment.
#1 Dividend growth investing via stocks
One way to do dividend growth investing is by investing in stocks that tend to increase their dividends.
Dividend Growth Stock Case Study: Apple (AAPL)
An example of a company with a history of increasing dividends is Apple (AAPL). Let's do a quick 10-year dividend analysis on Apple:
| Financial Year | Dividend Payout ($) | Annual Payout Growth | Yield-on-Cost if you invested on 2/1/2014 (Entry Price: $19.85/share) |
| 2023 | 0.950 | 4.40% | 4.79% |
| 2022 | 0.910 | 5.20% | 4.58% |
| 2021 | 0.865 | 7.12% | 4.36% |
| 2020 | 0.8075 | 6.25% | 4.07% |
| 2019 | 0.760 | 7.80% | 3.83% |
| 2018 | 0.7050 | 14.63% | 3.55% |
| 2017 | 0.6150 | 10.31% | 3.10% |
| 2016 | 0.5575 | 9.85% | 2.81% |
| 2015 | 0.5075 | 9.98% | 2.56% |
| 2014 | 0.4614 | - | 2.32% |
From the above dividend data, we can see that Apple has consistently grown its dividends for the past 10 years (2014 - 2023).
Investing in Apple 10 years ago: What would this mean to you?
If you invested in a unit of Apple share 10 years ago at $19.85/share, your yield-on-cost in the first year was just 2.32%.
However, by 2023, your yield-on-cost would be 5.48% (based on your entry price of $19.85).
Let's find out how much dividends you'd get by owning 10,000 units of Apple share from 2014:
- During the first year (2014), you'll be paid $4614 in dividends (10,000 units x $0.4614), which translates to 2.32% in dividend yield.
- 10 years later (2023), your original 10,000 units of Apple shares will pay you $9,500 in dividends (10,000 units x $0.95), translating to 4.79% in dividend yield.
Thanks to the growth in dividends, your dividend payout increased from $4,614 to $9,500 in 10 years - an incredible 105% growth!
#2 Dividend growth investing via ETF
Another way to execute a dividend growth strategy is by investing in Exchange-Traded Fund (ETF) that tend to grow their dividends.
READ: A beginner's guide to Exchange-Traded Fund (ETF)
Dividend Growth ETF Case Study: Schwab U.S. Dividend Equity ETF (SCHD)
An example of an ETF with a record of increasing its dividend consistently is the Schwab U.S. Dividend Equity ETF (SCHD). Let's do a quick 10-year dividend analysis on SCHD:
| Financial Year | Dividend Payout ($) | Annual Payout Growth | Yield-on-Cost if you invested on 2/1/2014 (Entry Price: $36.54/share) |
| 2023 | 2.6580 | 3.77% | 7.27% |
| 2022 | 2.5615 | 13.90% | 7.01% |
| 2021 | 2.2490 | 10.88% | 6.15% |
| 2020 | 2.0284 | 17.64% | 5.55% |
| 2019 | 1.7242 | 19.79% | 4.72% |
| 2018 | 1.4393 | 6.96% | 3.94% |
| 2017 | 1.3457 | 6.97% | 3.68% |
| 2016 | 1.2580 | 9.72% | 3.44% |
| 2015 | 1.1466 | 9.52% | 3.14% |
| 2014 | 1.0469 | – | 2.87% |
From the above dividend data, we can see that SCHD has consistently grown its dividends for the past 10 years (2014 - 2023).
Investing in SCHD 10 years ago: What would this mean for you?
If you invested in a unit of SCHD 10 years ago at $26.45/share, your yield-on-cost in the first year was just 3.96%.
By 2023, your yield-on-cost would be 7.27% (based on your entry price of $36.54).
Let's find out how much dividends you'd get by owning 10,000 units of SCHD from 2014:
- During the first year (2014), you'll be paid $10,469 in dividends (10,000 units x $1.0469), which translates to 2.87% in dividend yield.
- 10 years later (2023), your original investment in SCHD will pay you $26,580 in dividends (10,000 units x $2.6580), translating to 7.27% in dividend yield.
Thanks to the growth in dividends, your dividend payout increased from $10,469 to $26,580 in 10 years - a whopping 153% growth!
READ: My review on SCHD ETF (why this is my favorite dividend growth ETF)
Why do I choose dividend-growth ETFs over dividend-growth stocks?
There is no one absolute right way to invest since everyone has different goals and aspirations.
Reason #1: Dividend growth ETFs suit my passive investing style
Personally, I choose to invest in dividend growth ETF (such as SCHD) as it is a more passive way to do dividend growth investing.
- I am not a fan of investing in individual stocks:
- Investing in individual stocks means I will always have to be on the lookout for the next dividend growth stocks as my current stock may cut its dividends someday.
- It is an active effort which I am not keen in doing.
- I like how effortless ETF investing is:
- Investing in ETF means I am investing in a basket of stocks that are included as they fulfill the criteria (or methodology) of the ETF. When a stock fails to fulfill the selection criteria, it will be routinely replaced by another stock that is a better fit.
- This selection practice is done automatically by the fund manager, requiring no additional effort from the investor.
Most dividend growth ETFs have a stock selection criteria that ensures that only quality dividend stocks are included.
Reason #2: ETFs have selection criteria (a.k.a. Methodology) in place
As an example, for SCHD, stocks are selected based on the following criteria:
- Dividend payout: Minimum 10 consecutive years of dividend payments.
- Size of the company: Minimum Float Adjusted Market Cap of $500 million.
- Liquidity: Minimum three-month Average Daily Volume of Trading of $2 million.
Then, qualified stocks are further ranked as per the following criteria:
- Dividend yield
- 5-year dividend growth rate
- Company’s financial health (ie. Free cashflow vs debt)
- Return on equity (ROE)
From the above methodology, this gives me confidence that I am investing in a basket of quality dividend growth stocks by investing in SCHD.
READ: My review on SCHD ETF (why this is my favorite dividend growth ETF)
Why dividend growth investing?
Dividend growth is one of the strategies I use while building my Freedom Fund, with dividend growth ETFs like SCHD and FUSD making up close to 20% of my Freedom Fund.
Read: My review on FUSD ETF (Ireland-domiciled ETF)
3 key advantages of dividend growth investing:
- Given time, dividend growth is a great dividend investing strategy as you can expect to receive more dividends from the stocks or ETFs that increase their dividends consistently.
- Aside from a steady rise in dividends, investors tend to also enjoy returns in the form of capital appreciation (ie. Increase in stock price) from most dividend growth stocks/ETFs.
- If you plan to live off your dividends one day, dividend growth strategy is also an effective way to combat inflation.
- If you own a dividend stock or ETF that grows its dividends by an average rate of 8% annually (ie. You get paid 8% more (on average) every year), it will beat a 3% inflation. This prevents your buying power from eroding when you live off your dividends.
Who should do dividend growth investing?
I think dividend growth strategy is a decent choice for:
- Dividend investors with a longer investing time frame before they need to live off their dividends, ideally 10 years or longer.
- Investors who are looking to build a steady & growing cashflow from dividends.
Try it yourself: How to identify dividend growth stocks/ETF (for US market)
Seeking Alpha is a platform providing extensive information on the US stock market.
There's a FREE version that everyone can use (with most features restricted), you can still see if a stock/ETF has been raising its dividends consistently.
Step 1: Head over to Seeking Alpha's site (click HERE) and search for the stock you are looking to research:
Step 2: Under 'Dividends', select 'Dividend Growth'
Step 3: Scroll to the 'Dividend Growth' section and you'll find the dividend payout history of the stock/ETF:
You can also see the annual payout growth of the stock/ETF under 'Dividend Growth History':
Risks & Caveats of Dividend Growth Investing
#1 Risk of dividend cuts
The biggest uncertainty a dividend growth investor must face is the risk of a stock or ETF stop growing its dividends, or even cutting its dividends, especially during a difficult market/economic condition.
As such, it is important to:
- Select stocks and ETFs with a consistent dividend growth history. That said, a healthy record of dividend growth is still not a guarantee of future dividend growth.
- For individual stocks, select companies with a growing revenue and healthy cashflow. This ensures that the dividend growth is sustainable.
#2 Time & patience are the ultimate recipe
A caveat to effective dividend growth investing is it will take time.
Hence, it may not suit investors with a shorter investment time frame (especially if you plan to live off your dividends in <10 years).
Furthermore, dividend growth investing tend to be boring and less exciting compared to the latest hype in the market.
If you invested in SCHD in 2014, your yield-on-cost is just 3.96%, which can be discouraging for investors that have no patience to let their dividends grow.
#3 Dividend withholding tax
Dividend withholding tax is something dividend investors should be aware of while investing.
A 'withholding' tax is a method that a country uses to collect taxes from non-residents who have derived income from the country.
For example, Malaysians investing in US-listed stocks and US-domiciled ETFs will incur a 30% dividend withholding tax.
One work-around is to invest in markets that charge a more efficient dividend withholding tax. For Malaysians, investing in Malaysia, Singapore and Hong Kong stocks and domiciled-ETFs, for instance, comes with 0% dividend withholding tax, while Ireland and Canadian-domiciled ETFs charge a 15% dividend withholding tax.
I will discuss this workaround in more detail in future posts.
p.s. There are also instances where it makes sense to invest in the US stock market for dividends, despite the 30% dividend withholding tax. For me, SCHD is such example as it has one of the most consistent dividend growth track record among dividend ETFs.
READ: To learn more about dividend withholding tax, click HERE.
Verdict: Consider incorporating dividend growth investing in your dividend portfolio
When it comes to dividend investing, most investors tend to go for the stock with the highest dividend yield.
However, dividend investors with a longer investing time frame should give dividend growth investing a try. Most stocks or ETFs that grow their dividends consistently (like Apple and SCHD) tend to start with a lower dividend yield, but would turn out to be an attractive dividend beast with time.
What are your thoughts on dividend growth investing? Feel free to share your thoughts and questions with me in the comment section below!
Disclaimers
Past performance is not indicative of future performance.
This post is produced 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.
The inclusion of Interactive Brokers’ (IBKR) name, logo or weblinks is present pursuant to an advertising arrangement only. IBKR is not a contributor, reviewer, provider or sponsor of content published on this site, and is not responsible for the accuracy of any products or services discussed.
SCHD Alternatives: 2 best Canadian-domiciled dividend ETFs (ZLU.U, XDU.U)
SCHD is an important dividend ETFn in my Freedom Fund portfolio thanks to its solid record of dividend growth and historical return.
However, SCHD is not perfect for non-US residents. For non-US residents from countries like Malaysia and Singapore, investing in SCHD (listed in the US) comes with a 30% dividend withholding tax (WHT). This is not ideal considering most SCHD investors are investing for dividends.
Let’s say you are receiving $100 in dividends, you’ll only end up getting $70 due to withholding tax.
Investing in Canadian-domiciled ETFs as an alternative
An alternative is to invest in dividend ETFs domiciled in Canada, specifically the Toronto Stock Exchange (TSE), as it comes with 15% dividend withholding tax (WHT) instead of 30%.
In this post, I will review 2 Canadian-domiciled dividend growth ETFs with exposure to the US stock market, and discuss if they are good alternatives to SCHD.
RELATED POSTS:
Overview: What and why invest in Canadian-domiciled ETFs?
Canadian-domiciled ETFs are ETFs registered & traded in Canada (Toronto Stock Exchange (TSE)).
Here are 2 key reasons why dividend investors can consider Canadian-domiciled ETFs over US-domiciled ETFs:
Reason #1: 15% dividend withholding tax on Canadian-domiciled ETFs
Thanks to tax treaties between Canada and Malaysia (the same goes for Singapore), the withholding tax for dividends paid out of Canada is 15% instead of the usual 25% for countries without tax treaties.
Reason #2: Availability of Canadian-domiciled ETFs that track the US market
The Canadian ETF market is also very vibrant, where investors will find many Canadian-domiciled ETFs that track the US market.
This makes it possible for us to find alternatives to SCHD.
Comparison: Canadian-domiciled ETFs vs US-domiciled ETFs
| Canadian-domiciled ETFs | US-domiciled ETFs | |
| Dividend withholding tax (WHT) for non-US residents (Malaysia/Singapore) | 15% | 30% |
| ETFs that track the US market | Yes (though lesser in choice) | Yes |
| Expense ratio | Generally low, but slightly higher than US-domiciled ETFs | Generally low |
| Currency | Mainly in CAD, with variants in USD | USD |
| Commission (Interactive Brokers Pro: Tiered Commission) | USD 0.006 (initial tier), min. USD 0.80/order | USD 0.0035 (initial tier), min. USD 0.35/order |
READ MORE: Interactive Brokers (IBKR) long-term review & pricing
My 2 selection criteria for Canadian-domiciled dividend growth ETF
To recap, SCHD is loved by many dividend investors thanks to its record of dividend growth and decent overall returns.
As such, while looking for Canadian-domiciled alternatives for SCHD, I have 2 key criteria:
#1 Consistent record of dividend growth
Firstly, the goal is to look for Canadian-domiciled ETFs with a record of dividend growth.
This is in line with SCHD which has a 12-year streak in growing its dividends.
#2 Decent overall performance (total return)
Next, it is also important to identify Canadian-domiciled ETFs that delivered a decent overall performance.
In other words, I'd be looking for those that delivered positive historical Total Return (price AND dividend growth).
READ: Introduction to dividend growth investing
#1 BMO Low Volatility US Equity ETF (USD) (ZLU.U)
i. ZLU.U Overview: Exposure to low-volatility US stocks that grow their dividends
The BMO Low Volatility US Equity ETF (ZLU.U) is an ETF that offers investors exposure to the performance of a basket of US stocks with lower sensitivity to volatile market movements.
| Ticker/Symbol | ZLU.U |
| Traded Currency | USD |
| Dividend Yield (As of 08/2024) | 2.11% |
| Expense Ratio | 0.33% p.a. |
| Asset Under Management (AUM) (as of 08/2024) | USD 68 m |
| Dividend Payout Frequency | 4 |
The technical term for 'low market sensitivity' stocks is 'low beta' stocks. Beta is usually measured with reference to a benchmark, usually the S&P500 (beta: 1.00) for the US stock market. The lower the beta of a stock (<1.00), the less it will be impacted by market movement compared to the benchmark.
As of August 2024, ZLU.U has a beta of 0.42, translating to a less volatile nature:
ii. Methodology: How are stocks selected to be part of ZLU.U?
BMO, the fund manager of ZLU.U, uses a rule-based methodology to select the 100 least market-sensitive stocks among large-cap stocks listed in the US.
While ZLU.U's methodology does not involve screening criteria for dividends, the stocks that made it to the selection tend to be dividend-distributing stocks.
In the following section, I will discuss the dividends and overall performance of ZLU.U.
iii. Top 10 holdings, geographical and sector exposure of ZLU.U
I find ZLU.U's overall portfolio to be rather balanced.
As of August 2024, the top 3 sectors of ZLU.U are consumer staples (20.42%), healthcare (17.81%), and the utility sector (17.15%) respectively.
The top 10 holdings in ZLU.U are companies like Lockheed Martin, Johnson & Johnson, and IBM.
These are relatively established companies that have increased their dividends over the years:
iv. A look at ZLU.U Dividends: Track record of stable dividend growth
As of August 2024, ZLU.U pays about 2.11% in dividend yield.
ZLU.U dividend growth has been relatively stable since 2013. It stalled a little between 2017 - 2018, but has shown a solid 3-year growth streak since 2021.
What I appreciate about ZLU.U (compared to the other ETF I discussed in this article), is a longer dividend payout record.
v. ZLU.U Overall Performance: Enjoy stable dividend growth at low volatility
As of July 2024, ZLU.U returned a Year-To-Date (YTD) performance of 9.95%, and a 5-year annualized return of 8.26%:
| Performance as of July 2024 | ZLU.U |
| Year-to-date total return (%) | 9.95% |
| 5-year annualized return (%) | 8.26% |
What's unique about ZLU.U is the fund manager's approach to selecting low-beta stocks. This should translate to a lower drawdown during a challenging market.
Let's see if this is true:
Scenario #1: 2022 Bear Market: ZLU.U vs S&P500
Scenario #2: 2020 Covid-19 Selloff: ZLU.U vs S&P500
Scenario #3: 2018 Trade War Selloff: ZLU.U vs S&P500
vi. Verdict for ZLU.U: A low volatility dividend growth ETF
From the above chart comparison between ZLU.U and the S&P500, I find ZLU.U to be a decent ETF for investors seeking a less volatile investing experience in the US stock market.
Its track record of dividend growth also means investors can enjoy growing dividend income with time.
What do you think of ZLU.U? Let me know in the comment section below!
#2 iShares Core MSCI US Quality Dividend Index ETF (USD) (XDU.U)
i. XDU.U Overview: A balanced dividend ETF
The iShares Core MSCI US Quality Dividend Index ETF (XDU.U) offers investors exposure to US stocks with above-average dividend yield and steady or increasing dividends.
Compared to ZLU.U, XDU.U has a lower expense ratio of 0.15% p.a.
| Ticker/Symbol | XDU.U |
| Traded Currency | USD |
| Dividend Yield (As of 08/2024) | 2.38% |
| Expense Ratio | 0.15% p.a. |
| Asset Under Management (AUM) (as of 08/2024) | USD 13.9m |
| Dividend Payout Frequency | 12 |
ii. Methodology: How are stocks selected to be part of XDU.U?
XDU.U tracks the performance of the MSCI USA High Dividend Yield Index. Stocks are selected based on:
- Strong financials, including a healthy balance sheet and less volatile earnings.
- Then, stocks are screened for factors such as Return on Equity (ROE), earnings variability, Debt-to-Equity, and recent 12-month price performance.
iii. Top 10 holdings, geographical and sector exposure of XDU.U
As of August 2024, the top 3 sectors of XDU.U are consumer staples (18.44%), information technology (15.53%), and the industrial sector (14.28%) respectively.
It is a rather balanced holding with no specific sector dominating over others.
The top holdings of XDU.U include stocks like Broadcom and Procter & Gamble. These are companies that have a record of increasing dividend payout:
iv. A look at XDU.U Dividends: Relatively new dividend ETF waiting to prove itself
As of August 2024, XDU.U pays about 2.38% in dividend yield.
Since XDU.U was listed in October 2019, its dividend track record is limited compared to ZLU.U which we've discussed above. So far, it has recorded a dividend growth streak of 2 years.
What makes XDU.U unique compared to most dividend ETFs is its monthly distribution payout, compared to the typical quarterly payout.
v. XDU.U Overall Performance: Enjoy stable dividend growth at low volatility
As of July 2024, XDU.U delivered a Year-To-Date (YTD) performance of 10.88%. Since it was listed in 2019, there is no data on its 5-year annualized return yet.
| Performance as of July 2024 | XDU.U |
| Year-to-date total return (%) | 10.88% |
| 5-year annualized return (%) | N/A |
vi. Verdict for XDU.U: Not my top Canadian-domiciled dividend growth ETF
Given XDU.U lack of dividend track record, it is not my top Canadian-domiciled dividend growth ETF for the time being.
That said, it should not be overlooked and I will keep track of XDU.U's performance from time to time.
Comparison: Canadian-domiciled dividend ETFs (ZLU.U, XDU.U) vs SCHD
Before I share my concluding thoughts in the final verdict, let me lay out some side-by-side facts & features of the dividend growth ETFs that we’ve discussed in this post today:
| SCHD | ZLU.U | XDU.U | |
| Domicile | US | Canada | Canada |
| Exposure | US market | US market | US market |
| Special traits (as of 08/2024) | 12-year dividend growth streak | Less volatile stocks selection | Fewer years of dividend growth track record |
| Expense Ratio | 0.06% p.a. | 0.33% p.a. | 0.15% p.a. |
| Dividend Yield (as of 08/2024) | 3.43% | 2.11% | 2.38% |
| Dividend Growth Streak | 12 years | 3 years | 2 years |
| YTD Total Return (as of 07/2024) | 10.47% | 9.95% | 10.88% |
| 5-Year Annualized Return (as of 07/2024) | 12.78% | 8.26% | N/A |
How to invest in Canadian-domiciled ETFs
Investing in Canadian-domiciled ETFs like ZLU.U and XDU.U requires access to the Toronto Stock Exchange (TSE).
Since most brokers in Malaysia do not offer access to the Canadian market, my go-to broker to invest in Canadian-domiciled ETFs is Interactive Brokers (IBKR).
Interactive Brokers (IBKR) is one of the most reliable global brokers as it is regulated by financial authorities in over 10 countries (eg. US, UK, SG, HK, Canada, and more).
Aside from that, IBKR offers access to the USD-denominated Canadian-domiciled ETF at an affordable fee. You can check out IBKR’s fee structure HERE (under ‘Canada’ > ‘USD-denominated’)
READ: My Interactive Brokers (IBKR) long-term user review
Verdict: While not perfect, Canadian-domiciled ETFs provide a more tax-efficient way to invest for dividends in the US stock market
My search for the best SCHD alternative brought me to explore Canadian-domiciled dividend ETFs,
Just like my research on Ireland-domiciled dividend ETFs, I think there is no perfect alternative to SCHD in the Canadian stock market.
Despite Canadian ETFs being more tax efficient (15% dividend withholding tax), SCHD's 12-year dividend growth streak is difficult to beat. Furthermore, SCHD also has the lowest expense ratio of 0.06% p.a. compared to ZLU.U and XDU.U.
Ultimately, it is up to us as investors to decide what compromise to take while deciding between US or Canadian-domiciled ETFs.
What do you think?
Stay tuned as I continue my quest to search for the best SCHD alternatives (in other markets, maybe!).
Meanwhile, check out my go-to broker to invest in Canadian-domiciled ETFs below!
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced for general information purposes only. It is not intended to constitute professional buy/sell advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.
The inclusion of Interactive Brokers’ (IBKR) name, logo or weblinks is present pursuant to an advertising arrangement only. IBKR is not a contributor, reviewer, provider or sponsor of content published on this site, and is not responsible for the accuracy of any products or services discussed.
Read this BEFORE the next market crash/bear market
It's difficult not to be amazed by the dynamics of the stock market.
It could be crazily calm and bullish for months, and 'poooof' - panic crash.
A panic selloff or crash for a longer period could happen for many reasons, but I do not intend to talk about it in this article. Chances are, you will be able to find out WHY the market does certain things at almost every corner online:
What's underrated (and less talked about) is HOW to deal with a tricky or challenging market condition as an investor.
As such, my intention with this article is to produce a reflection, or guide that I'd come back to every time there is bloodshed in the stock market (for whatever reason).
I hope sharing this with you can help you handle the next (and inevitable) market selloff better than the previous ones.
Such is the life of an investor in the stock market. Let's get started:
"What's your goal?" - How to be psychologically ahead of 99% of investors in the stock market
As cliché as it may be, I think being clear about why you invest is the most important thing in investing as it is something you could fall back on when things seem bleak and fearful.
Personally, I have 2 main portfolios and 2 clear goals with a timeline:
- Dividend investing (via my Freedom Fund) to complement my cashflow in about 15 – 20 years. Those would be the time of my life when my parents might need more care.
- Growth investing for my retirement in about 30 years, mainly through Exchange-Traded Funds (ETFs).
p.s. You can read about my investing strategies/approach HERE.
By setting a clear goal, I accomplish 3 specific things:
- The motivation behind WHY I invest (Complement cashflow and Retirement)
- A clear TIME FRAME of my investing journey (15 - 20 years and about 30 years)
- HOW I invest (Dividend and Growth Investing)
It is every investor’s responsibility to find out their goal. Again, it does not have to be complicated. Just cover 3 things:
- WHY do you invest? (I hope it's not for quick money)
- What's your investment TIME FRAME?
- HOW do you plan to invest?
Knowing these 3 would put you ahead of most people in the market as they give you:
- The conviction to stick to the plan during a challenging market.
- The temperament to not be influenced by short-term hype and news.
- Even better, the confidence to buy more when everyone is panicking
In the following section, let's look at some useful perspectives about stock market selloffs.
Some useful perspectives about stock market selloffs
#1 Drawdown is common and inevitable
Stock market selloffs and crashes are part and parcel of investing. Do not let a relatively smooth 2023 and (most of) 2024 tell you otherwise:
If you invest in the US stock market (ie. the S&P 500), chances are high that you will experience a 5% drawdown almost every year. After all, it happened 94% of the time from 1928 - 2023.
Even the odds of a >20% drop in the stock market are not uncommon. It occurred 26% of the time in the past. Simply put, the stock market has experienced a big drop in 25 out of the past 96 years.
#2 The stock market went up regardless
Despite the high odds of a stock market drawdown, the S&P500 has grown by 898,634.26% from 1928 - 2023.
This translates to an annualized return of about 9.95%/year.
You don't see this being mentioned as much on social media and news compared to reports about stock market crashes. Boring news does not attract eyeballs.
READ MORE: Intro & how to invest in the S&P500
#3 There's always a reason to sell
It is easy to find reasons to sell and get out of the stock market in each panic selloff or market crash. Social media and news make it even easier.
Difficult times are when you fall back on your WHY in investing. You only need one WHY to stay the course.
#4 Time in the market > Timing the market
The ability to stay invested in the stock market is one of the most underrated skills of investing.
As I am writing this, we've just experienced one of the biggest panic selloff in recent years. Monday (5/8/2024) was full of fear and uncertainties.
Come Thursday (8/8/2024), the market bounced back, producing one of the best days in months/years.
Goes on to show how important it is to stay invested in order to participate in positive movements in the stock market.
We can't enjoy the good stuffs if we cannot stick through the difficult times.
Common emotions and how to deal with them
The stock market is a fascinating place as it teaches us more lessons about ourselves than most other endeavours could, especially our emotions on money and risk.
Here are 4 emotions I experienced as an investor over the years.
Allow me to define them as I believe the clearer I can define these emotions, the better I am in managing them.
#1 Fear of missing out (FOMO)
The urge to buy without a clear plan or reason.
Common reasons for FOMO:
- Not having a clear idea about my investing goals, style or strategy (time to re-visit my WHY and HOW).
- I am turning speculative from my initial goal of long-term investing.
- I have been on social media for too long (log out!).
#2 The urge to sell out of fear
The urge to sell my holdings when the market is crashing or panicking.
Common reasons for the urge to sell out of fear:
- I do not know what I am investing in, hence I lack conviction or confidence to hold on to my investments (learn to build my own investment thesis).
- I am risking too much/I am investing using money I cannot afford to lose.
- I have been on social media for too long (log out!).
#3 The urge to time the market
The tendency to want to buy when the market is at its 'lowest' point. Ending up missing out when the market rebounds or recovers.
Common reasons for the urge to time the market:
- I think I am the stock market god (snap out of it!)
- I want to post about it and look cool on social media (ego).
- I got lucky a few times, and thought I could do it again (anchoring bias). Bad kind of lucky!
#4 Regret of not buying more when the market rebounds from a selloff
The strongest emotions of all, as it comes with the hindsight of 'what could've been'.
Common reasons for regret of not buying more when the market rebounds:
- I think I can time the market (read Reason #3)
- Note to self: I only know this because it happened. Hindsight is worthless in a scenario like this.
The goal is NOT to avoid emotions while investing. It is learning how to deal with them better when we experience them.
3 final thoughts on investing during a stock market crash/bear market:
#1 Let's take a step back: Do personal finance BEFORE investing
A common reason why one might feel the urge to sell out of fear is due to one risking money they cannot afford to lose.
In other words, we could be risking too much in the stock market that we get very sensitive to market moving against us.
One way I have managed this over the years is by building up more savings and emergency funds with time. This way, I know I do not need to rely on selling my long-term investments during a short-term uncertainty.
With a safety net of savings and an emergency fund, it has helped me keep my composure and allowed me to stick to my investing plan during a difficult market condition.
Do well in your personal finances and investing becomes easier.
FIND OUT MORE: My experience engaging a licensed financial planner in Malaysia
#2 Why I rarely pick stocks anymore
In recent years, I have switched a lot of my individual stocks to Exchange-Traded Funds (ETFs) like the S&P500 ETF and SCHD.
One reason is the convenience that ETFs bring to the table:
- Diversification - Reduce the risk of investing in individual stocks. The risk of individual companies going obsolete is way higher than the entire stock market.
- ETF screening process - Most ETFs are built with a screening process to include qualified stocks that fulfill their criteria, and exclude the ones that aren't qualified.
ETF screening process is important, as it automates the stock selection process on investors' behalf.
Let's use S&P500 ETFs as an example. While the S&P500 has grown by 9.95% per year since 1928, the top stocks in the S&P500 are very different 30 years ago vs today:
In other words, time and market dynamics (such as a market crash) will make some individual companies obsolete, but the stock market tends to continue growing thanks to its built-in selection process.
#3 Learn to build your investment thesis
If you have bought stocks for the sake of buying (or FOMO), a market crash is a good learning opportunity to reassess your approach to investing.
Learning to form your investment thesis is a great way to enhance your conviction while facing a crash or panic market.
A simple (yet useful) thesis could be something like this:
- Why do I buy a stock/asset?
- How long am I planning to own it?
- Under what circumstances will I consider selling it? This is usually when there is no more reason to own the stock/asset, or when you have achieved your investment goal.
Verdict: Reminder to self - this is normal
I do not hate or like a market crash or bear market. For me, experiencing them is part of a journey of investing.
What I appreciate though, is the lessons that come with it:
It is not about avoiding a bear market or market crash. It is not about avoiding fear, FOMO, or regrets.
Rather, it is about how we learn to accept that these market phenomena and emotions are part of investing - it is our role to become a better investor with risk and uncertainties in an effort to grow our wealth.
Hope this makes sense!
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced 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.
The inclusion of Interactive Brokers’ (IBKR) name, logo or weblinks is present pursuant to an advertising arrangement only. IBKR is not a contributor, reviewer, provider or sponsor of content published on this site, and is not responsible for the accuracy of any products or services discussed.
SCHD Alternatives: 3 best Ireland-domiciled dividend ETFs (FUSD, FQGI, UDVD)
SCHD is one of the favourite ETFs among dividend investors thanks to its decade-long track record of dividend growth and solid historical return.
However, for non-US residents from countries like Malaysia and Singapore, investing in SCHD (which is listed in the US) comes with a 30% dividend withholding tax (WHT). This is not ideal considering most SCHD investors are investing for dividends.
Let’s say you are receiving $100 in dividends, you’ll only end up getting $70 due to withholding tax.
Investing in Ireland-domiciled ETFs as an alternative
One alternative is to invest in Ireland-domiciled dividend ETFs which are listed on the London Stock Exchange (LSE), as it comes with 15% dividend withholding tax (WHT) instead of 30%.
In this post, I will go through the 3 best Ireland-domiciled dividend growth ETFs, and discuss if they are good alternatives to SCHD.
RELATED POSTS:
Overview: What and why invest in Ireland-domiciled ETFs?
Ireland-domiciled ETFs are ETFs registered & regulated in Ireland. However, they are typically listed & traded on the London Stock Exchange (LSE).
Here are 2 key reasons why dividend investors should consider Ireland-domiciled ETFs over US-domiciled ETFs:
Reason #1: 15% dividend withholding tax on Ireland-domiciled ETFs
Thanks to Ireland's double taxation treaty with the US, ETFs domiciled in Ireland only pay 15% withholding tax on US dividends, instead of the 30% dividend withholding tax that US-domiciled ETFs are charging for non-US residents.
Reason #2: Availability of Ireland-domiciled ETFs that track the US market
Another plus point is that despite being listed in London, there are Ireland-domiciled ETFs that track the US market, making it possible for us to find alternatives to SCHD.
Comparison: Ireland-domiciled ETFs vs US-domiciled ETFs
| Ireland-domiciled ETFs | US-domiciled ETFs | |
| Dividend withholding tax (WHT) for non-US residents (Malaysia/Singapore) | 15% | 30% |
| ETFs that track the US market | Yes (though lesser in choice) | Yes |
| Expense ratio | Generally low, but slightly higher than US-domiciled ETFs | Generally low |
| Currency | Mostly available in GBP & EUR, with variants in USD | USD |
| Commission (Interactive Brokers Pro: Tiered Commission) | 0.05% of trade value (initial tier), min. USD 1.70/order | USD 0.0035 (initial tier), min. USD 0.35/order |
READ MORE: Interactive Brokers (IBKR) long-term review & pricing
My 2 selection criteria for Ireland-domiciled dividend growth ETF
To recap, SCHD is loved by many dividend investors thanks to its record of dividend growth and decent overall returns.
As such, while looking for Ireland-domiciled alternatives for SCHD, I have 2 key criteria:
#1 Consistent record of dividend growth
Firstly, the goal is to look for Ireland-domiciled ETFs with a record of dividend growth.
This is in line with SCHD which has a 12-year streak in growing its dividends.
#2 Decent overall performance (total return)
Next, it is also important to identify Ireland-domiciled ETFs that delivered a decent overall performance.
In other words, I'd be looking for those that delivered positive historical Total Return (price AND dividend growth).
READ: Introduction to dividend growth investing
#1 Fidelity US Quality Income UCITS ETF USD (FUSD)
i. FUSD Overview: A solid overall performer
Listed in 2017, FUSD is an Ireland-domiciled ETF focusing on high-quality large & mid-capitalization dividend-paying US companies.
| Ticker/Symbol | FUSD |
| Traded Currency | USD |
| Dividend Yield (As of 07/2024) | 1.94% |
| Expense Ratio | 0.25% p.a. |
| Asset Under Management (AUM) (as of 06/2024) | USD 1,571 m |
| Dividend Payout Frequency | Quarterly |
ii. Methodology: How are stocks selected to be part of FUSD?
The FUSD tracks the underlying performance of the Fidelity US Quality Income Index. Stocks are screened based on the following:
| (A) Non-banking stocks | (B) Banking stocks |
| i. Cash Flow margin: Measure how efficient a company is at converting sales to cash. | i. Return of Equity: Measure profitability of a company |
| ii. Return on invested capital (ROIC): Measure how well a company is making profit relative to the assets/equity committed. | ii. Debt-to-assets: Measure the financial leverage of a company. |
| iii. Free Cash Flow Stability: Measures the financial strength of a company |
Finally, companies with the highest dividend yield are selected.
FUSD is also ESG-sensitive, where certain businesses are excluded from selection, such as military & weaponry, tobacco, adult entertainment, and alcohol.
I like the selection criteria of the Fidelity US Quality Income Index which ensure that only companies with a strong financial foundation (eg. healthy cashflow) are selected.
iii. Top 10 holdings & sector of FUSD
As of June 2024, FUSD is an ETF with exposure weighted towards the tech sector (34.9%), followed by the financial (12.1%) and healthcare sector (11.9%).
The top 10 holdings in FUSD include familiar names like Microsoft, Apple, and Nvidia, which make up about 33% of FUSD's holdings.
iv. A look at FUSD Dividends
As of July 2024, FUSD pays about 1.96% in dividend yield.
That said, the more important metric is distribution growth (p.s. find out WHY here). Did FUSD manage to grow its dividends over time?
From FUSD's distribution (or payout) history below, FUSD managed to grow its distribution from 2018 - 2021. However, it experienced a dividend cut in 2022 due to a challenging market environment and managed to raise its dividend again in 2023.
Given a tricky 2022, I think this is an acceptable distribution growth trend, and I expect FUSD to continue raising its dividends in 2024 as the market has been doing well so far.
v. Overall performance of FUSD
As of July 2024, FUSD has delivered a year-to-date total return (price & dividend growth) of 12.72%.
This is expected, considering FUSD has heavier exposure to the tech sector, namely companies like Apple, Microsoft, and Nvidia.
FUSD also has a solid 5-year annualized return of 12.91%.
| Performance as of July 2024 | FUSD |
| Year-to-date total return (%) | 12.72% |
| 5-year annualized return (%) | 12.91% |
vi. Verdict for FUSD: Solid overall performance, though it lacks a convincing dividend growth record
FUSD is an Ireland-domiciled ETF that I personally own in my Freedom Fund. I like FUSD for its solid overall performance and relatively low expense ratio (0.25% p.a.) compared to other Ireland-domiciled dividend ETFs.
However, what FUSD lacks is a solid dividend growth record since 2022. As I am looking into these ETFs for dividend growth, this is what stopping me from investing more in FUSD for the time being.
#2 Fidelity Global Quality Income UCITS ETF (FGQI)
i. FGQI Overview: The global brother of FUSD
Listed in 2017, FGQI is almost similar to the FUSD ETF that we discussed above. The difference is that FGQI covers dividend stocks from developed markets, including stocks listed in the US, Japan, UK, and France.
| Ticker/Symbol | FGQI |
| Traded Currency | USD |
| Dividend Yield (As of 07/2024) | 2.40% |
| Expense Ratio | 0.40% p.a. |
| Asset Under Management (AUM) (as of 06/2024) | USD 756m |
| Dividend Payout Frequency | Quarterly |
ii. Methodology: How are stocks selected to be part of FGQI?
The FGQI tracks the underlying performance of the Fidelity Global Quality Income Index.
With the exception of multiple-country stock exposure, FGQI stock selection criteria are almost similar to FUSD:
| (A) Non-banking stocks | (B) Banking stocks |
| i. Cash Flow margin: Measure how efficient a company is at converting sales to cash. | i. Return of Equity: Measure profitability of a company |
| ii. Return on invested capital (ROIC): Measure how well a company is making profit relative to the assets/equity committed. | ii. Debt-to-assets: Measure the financial leverage of a company. |
| iii. Free Cash Flow Stability: Measures the financial strength of a company |
Finally, companies with the highest dividend yield are selected.
Just like FUSD, FGQI is also ESG-sensitive, where certain businesses are excluded from selection, such as military & weaponry, tobacco, adult entertainment, and alcohol.
The selection criteria of FGQI ensures that the stocks selected are financially robust.
iii. Top 10 holdings, geographical and sector exposure of FGQI
As of June 2024, close to 71% of FGQI holdings are listed in the US, followed by Japan (6.1%), France (3.7%), and the UK (3.0%).
In other words, most FGQI holdings are still US-focused, such as Microsoft, Apple, and Nvidia. That said, there is also exposure to quality dividend stocks from other developed markets, such as ASML Holding and Novo Nordisk from Europe.
FGQI is an ETF that is weighted heavier towards the tech sector (27.7%), followed by financials (15.2%), and healthcare (11.8%).
iv. A look at FGQI Dividends
As of July 2024, FGQI pays about 2.40% in dividend yield. This is higher than FUSD's 1.94%.
How about its distribution growth for the past few years?
Similar to FUSD, FQGI experienced a dip in distribution in 2022, but managed to recover in 2023 with the highest distribution yet.
In terms of recovery of dividend growth from a challenging 2022, I think FQGI is slightly better than FUSD.
v. Overall performance of FQGI
As of July 2024, FQGI has delivered a year-to-date total return (price & dividend growth) of 10.40%
Meanwhile, FQGI also delivered a decent 5-year annualized return of 11.15%.
| Performance as of July 2024 | FQGI |
| Year-to-date total return (%) | 10.40% |
| 5-year annualized return (%) | 11.15% |
vi. Verdict for FQGI: Decent globally diversified dividend growth ETF
As the global version of FUSD, FQGI is a great option for dividend growth investors looking for exposure outside of the US.
The decent dividend growth and past return are 2 plus points of FQGI.
However, its 0.40% p.a. expense ratio is slightly on the high side, especially in comparison to SCHD (0.06% p.a.) and FUSD (0.25% p.a.).
#3 SPDR S&P US Dividend Aristocrats UCITS ETF (UDVD)
i. UDVD Overview: Consistent Ireland-domiciled dividend growth ETF
Listed in 2011, UDVD is focused on US stocks with at least a 20-year record of increasing dividends.
| Ticker/Symbol | UDVD |
| Traded Currency | USD |
| Dividend Yield (As of 07/2024) | 2.22% |
| Expense Ratio | 0.35% p.a. |
| Asset Under Management (AUM) (as of 06/2024) | USD 3,445 m |
| Dividend Payout Frequency | Quarterly |
ii. Methodology: How are stocks selected to be part of UDVD?
The UDVD tracks the underlying performance of the S&P High Yield Dividend Aristocrats Index. It is comprised of US stocks that have raised their dividends every year for at least 20 consecutive years.
Stocks are screened based on the following:
| Universe | Stocks must be part of the S&P500 Composite 1500. It includes large, medium, and small market-cap US stocks, making up to 90% of the US stock market. |
| Dividends | Stocks that have raised dividends EVERY year for at least 20 years. |
| Market Cap | Market capitalization of at least USD 2 billion. |
| Liquidity | Stocks with average daily value traded of at least USD 5 million |
| Diversification | Each stock is capped at 4% of total holding. |
While it may seem attractive to only include stocks with at least 20 years of dividend growth streak, it also means the exclusion of many notable names that may not have such a long track record, such as Apple (11-year dividend growth streak).
In other words, it may lead to UDVD holding to give way to many less-known companies, as we'll see below.
iii. Top 10 holdings & sector of UDVD
UDVD is a rather balanced ETF. As of June 2024, the top 3 sectors of UDVD are consumer staples (18.07%), industrials (17.99%), and the utility sector (17.42%) respectively.
Unlike FUSD and FQGI, there is no single sector that dominates the sector breakdown for UDVD:
The top 10 holdings in UDVD are generally less familiar names like Realty Income Corp, Chevron Corporation, and Kimberly-Clark Corporation.
These are companies with at least 20 years of record in raising their dividends.
iv. A look at UDVD Dividends: Consistent decade-long dividend growth
As of July 2024, UDVD pays about 2.22% in dividend yield.
UDVD displayed a consistent dividend growth record since 2014, with a small blip in 2022, which recovered in 2023.
Among all 3 Ireland-domiciled ETFs in this post, UDVD has a more reliable dividend growth record than FUSD and FQGI.
v. Overall performance of UDVD
As of July 2024, UDVD has delivered a year-to-date total return (price & dividend growth) of 4.19%.
This is pale compared to FUSD and FQGI, which makes sense due to UDVD's lack of exposure to stocks in the tech sector (such as Nvidia and Apple) which are driving most of the growth in 2024.
UDVD has a so-so 5-year annualized return of 6.64%.
| Performance as of July 2024 | UDVD |
| Year-to-date total return (%) | 4.19% |
| 5-year annualized return (%) | 6.64% |
vi. Verdict for UDVD: Consistent dividend growth, subpar overall growth
I used to own UDVD as part of my Freedom Fund, but I've decided to dispose of it in Q2 2024.
Reason being, I find the >20-year dividend growth selection rule, while seems attractive, has to be done by sacrificing many excellent dividend growth stocks like Apple.
As a result, many of UDVD holdings are very mature stocks (I mean, what kind of company raises its dividend for >20 years?) with less growth opportunity, leading to a subpar total return.
Comparison: Ireland-domiciled dividend ETFs (FUSD, FQGI, UDVD) vs SCHD
Before I share my concluding thoughts in the final verdict, let me lay out some side-by-side facts & features of all 4 dividend growth ETFs that we've discussed in this post today:
| SCHD | FUSD | FGQI | UDVD | |
| Domicile | US | Ireland | Ireland | Ireland |
| Exposure | US market | US market | Developed market (US, Japan, UK etc) | US market |
| Special traits (as of 06/2024) | 12-year dividend growth streak | Tech-heavy holdings | Tech-heavy holdings, global exposure | Only stocks with >20 years of div. growth are included. |
| Expense Ratio | 0.06% p.a. | 0.25% p.a. | 0.40% p.a. | 0.35% p.a. |
| Dividend Yield (as of 07/2024) | 3.64% | 1.96% | 2.40% | 2.22% |
| Dividend Growth Streak | 12 years | 1 year | 1 year | 1 year |
| YTD Total Return (as of 07/2024) | 4.17% | 12.72% | 10.40% | 4.19% |
| 5-Year Annualized Return (as of 07/2024) | 11.78% | 12.91% | 11.15% | 6.64% |
READ: My SCHD ETF review
How to invest in Ireland-domiciled ETFs
Investing in Ireland-domiciled ETFs like FUSD, FGQI, and UDVD requires access to the London Stock Exchange (LSE).
Since most brokers in Malaysia do not offer access to the London market, my go-to broker to invest in Ireland-domiciled ETFs is Interactive Brokers (IBKR).
Interactive Brokers (IBKR) is one of the most reliable global brokers as it is regulated by financial authorities in over 10 countries (eg. US, UK, SG, HK, Australia, and more).
Aside from that, IBKR offers access to the USD-denominated Ireland-domiciled ETF at an affordable fee. You can check out IBKR's fee structure HERE (under 'United Kingdom' > 'USD-denominated')
READ: My Interactive Brokers (IBKR) long-term user review
Verdict: There'll be trade-offs while selecting Ireland-domiciled ETF as an alternative to SCHD
In my mission to look for the best SCHD alternatives in Ireland-domiciled ETFs, I find it difficult to find the perfect duplicate of SCHD.
For instance, SCHD has a solid 12-year dividend growth streak record, while the Ireland-domiciled ETFs we explored in this post (FUSD, FGQI, and UDVD) experienced a dividend cut in 2022.
However, FUSD and FGQI have shown a better total return relative to SCHD in 2024 thanks to their tech-heavy exposure to companies like Apple and Nvidia.
Simply put, in Ireland-domiciled ETFs, I have yet to find a perfect SCHD replacement, nor do they have an absolute advantage over SCHD.
What do you think?
Stay tuned as I continue my quest to search for the best SCHD alternatives (in other markets, maybe!).
Meanwhile, check out my go-to broker to invest in Ireland-domiciled ETFs below!
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced 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.
The inclusion of Interactive Brokers’ (IBKR) name, logo or weblinks is present pursuant to an advertising arrangement only. IBKR is not a contributor, reviewer, provider or sponsor of content published on this site, and is not responsible for the accuracy of any products or services discussed.
SCHD Review: Still my favorite US dividend growth ETF?
The Schwab US Dividend Equity (SCHD) ETF is one of the most well-received ETFs among dividend investors.
As an ETF with a track record of consistently growing its dividend, SCHD is a key position in my Freedom Fund, making up >10% of the portfolio:
In this post, let us take a deep dive at SCHD, and 3 key reasons why it is my favorite dividend ETF to hold for the long term in my Freedom Fund!
RELATED LINKS:
- [Portfolio] A detailed look at my Freedom Fund
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p.s. Check out my go-to broker to invest in SCHD below!
Quick Recap: What is an ETF & why dividend ETF?
Exchange-Traded Funds (ETF) are essentially low-cost funds listed in the stock market, where you can buy and sell just like stocks.
Simply put, ETFs are funds that track the performance of a basket of assets (eg. Stocks, bonds, commodities).
As such, dividend ETFs are ETFs that track a basket of dividend-paying assets, such as stocks and bonds.
Why invest in dividend ETFs?
Dividend ETFs make it easy for investors to gain diversified exposure to a basket of dividend-paying stocks (or other assets), without having to pick individual stocks.
The diversified nature of ETFs significantly reduces the impact should a single company perform badly.
LEARN MORE: Introduction to Exchange-Traded Fund (ETF)
What is Schwab US Dividend Equity (SCHD) ETF?
Schwab US Dividend Equity (SCHD) is a dividend ETF listed in the US stock market since 2011.
Key info of SCHD:
- ETF manager: Charles Schwab
- Expense Ratio: 0.06% per annum
- Holdings: US-listed stocks
- Dividend payout: Quarterly
How are stocks selected to be part of SCHD?
SCHD tracks the Dow Jones U.S. Dividend 100 Index, which measures the performance of fundamentally solid US-listed companies with a track record of consistent dividend payment.
Essentially, stocks are filtered based on the following criteria:
- Dividend payout: Minimum 10 consecutive years of dividend payments.
- Size of the company: Minimum Float Adjusted Market Cap of $500 million.
- Liquidity: Minimum three-month Average Daily Volume of Trading of $2 million.
Then, qualified stocks are further ranked as per the following criteria:
- Dividend yield
- 5-year dividend growth rate
- Company’s financials (ie. Free cashflow vs debt)
- Return on equity (ROE)
As a result, companies that are selected to be part of SCHD holdings are usually companies with strong financial foundation and a solid track record of dividend payout.
3 key reasons why I invest in SCHD
#1 SCHD has a strong track record of growing its dividend payout
Since its inception in late 2011, SCHD has recorded more than 10 years of distribution growth streak (even as Covid broke out in 2020!).
| Financial Year | Dividend Payout ($) | Annual Payout Growth | Yield-on-Cost if you invested on 2/1/2014 (Entry Price: $36.54/share) |
| 2023 | 2.6580 | 3.77% | 7.27% |
| 2022 | 2.5615 | 13.90% | 7.01% |
| 2021 | 2.2490 | 10.88% | 6.15% |
| 2020 | 2.0284 | 17.64% | 5.55% |
| 2019 | 1.7242 | 19.79% | 4.72% |
| 2018 | 1.4393 | 6.96% | 3.94% |
| 2017 | 1.3457 | 6.97% | 3.68% |
| 2016 | 1.2580 | 9.72% | 3.44% |
| 2015 | 1.1466 | 9.52% | 3.14% |
| 2014 | 1.0469 | – | 2.87% |
From the above dividend data, we can see that SCHD has consistently grown its dividends for the past 10 years.
The dividend growth by SCHD also means that investors that invested in SCHD a decade ago, while started with a small 2.87% yield, would be enjoying 7.27% in yield-on-cost (p.s. click to find out what yield-on-cost means) in 2023:
i. Continued dividend growth streak in 2024
As of the 1st half of 2024, SCHD continues its dividend growth streak compared to the prior years:
ii. Why is SCHD’s growing dividend payout so attractive in the long term?
For investors looking to live off their dividends one day, SCHD can be an ETF to look out for thanks to its solid track record of dividend growth.
If you invested in a unit of SCHD 10 years ago (assuming 1st day of 2014) at $36.54/share, your yield-on-cost in the first year was just 2.87%.
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During the first year (2014), you’ll be paid $10,469 in dividends (10,000 units x $1.0469), which translates to 2.87% in dividend yield.
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10 years later (2023), your original investment in SCHD will pay you $26,580 in dividends (10,000 units x $2.6580), translating to 7.27% in dividend yield.
Thanks to the growth in dividends, your dividend payout increased from $10,469 to $26,580 in 10 years – a whopping 153% growth!
[IMPORTANT] It is important to note this discussion is a reference to the past, and past performance is NOT indicative of future returns.
#2 SCHD displayed decent overall performance
SCHD not only shines with its impressive track record of growing dividends.
With a 10-year annualized return of 10.99% (as of May 2024), SCHD’s overall performance (inclusive of dividends) has also been decent for the past decade.
#3 Relatively Low volatility
On top of both key reasons stated above, SCHD also produced returns at relatively lower volatility than the stock market (S&P500).
Beta measures the volatility of a stock in comparison with the market (usually the S&P500) as a whole.
As of July 2024, SCHD recorded a 5-year beta of around 0.77 (source: Yahoo finance), while the S&P500 has a beta of 1.00. This means SCHD is about 23% less volatile than the S&P500.
In other words, compared to the S&P500, investors who invest in SCHD tend to enjoy a more stable return with less intense market swings.
SCHD Holdings
As of March 2024, SCHD holds about 103 stocks. The top 10 companies make up about 40% of SCHD holdings:
Top Sector Exposure of SCHD
In addition, SCHD filtering method also means companies that qualified are commonly found in more stable sectors, such as the financials and healthcare sectors.
3 things/risks to know while investing in SCHD:
At a glance, SCHD is a pretty balanced dividend ETF with 103 holdings across different sectors. That said, here are 2 key things we need to know while investing in SCHD:
#1 Geographical risk
SCHD offers 100% exposure to US-listed companies. This means any domestic/international US-related events & conflicts will influence the performance of SCHD.
#2 Risk of dividend cut
While it is undeniable that SCHD has been growing its dividends for 12 years in a row, it is still not a guarantee that it will stay that way forever.
As such, investors should always be prepared for the possibility of a dividend cut, especially when the market & economy is not doing well.
#3 Dividend withholding tax (WHT) for non-US residents
For foreign investors that invest in US-domiciled ETFs such as SCHD, there is a dividend withholding tax (WHT) for dividend payouts.
As an example, there is a 30% dividend WHT for investors from Malaysia and Singapore.
Example: 3.5% dividend yield – 30% WHT = 2.45%
Personally, while this is not ideal, I still find SCHD’s solid track record of increasing dividend payout outweighs the dividend withholding tax factor.
It is the only US-domiciled dividend ETF that I wouldn’t mind investing in.
LEARN MORE: A guide to Dividend Withholding Tax (WHT) - all you need to know!
My thoughts on SCHD after investing in it for 2 years (2022-2024)
It is no secret that the dividend-investing community loves SCHD. Aside from growing its dividends consistently, SCHD has delivered a reliable return for many years.
From 2013 - 2022, SCHD has grown by 244%, outperforming the S&P500 (+207%).
I began to invest in SCHD in 2022, and here is what I observed as an SCHD investor:
#1 SCHD's performance has been lackluster in 2023 and 2024
2023 and 2024 (so far) have been great times for investors, with the S&P500 hitting all-time highs.
However, since 2023, SCHD's performance has been lackluster compared to the S&P500.
From 2023 - July 2024, SCHD has grown by a mere 7.6%. Meanwhile, the S&P500 has grown by over 47% during the same time:
READ: How to invest in S&P500 as a non-US citizen
#2 A lack of tech exposure led to SCHD's underperformance
To understand SCHD's underperformance, it is important to know what is driving S&P500's growth since 2023.
The impressive growth in the S&P500 in 2023 - 2024 is mainly driven by the 7 stocks in the S&P500 - Apple, Alphabet, Meta, Microsoft, NVIDIA, Amazon, and Tesla.
Without these 7 companies (which make up ~26% of the S&P500 total weight), the S&P500 would have returned a rather mediocre performance:
In comparison, SCHD's holding lacks exposure to all 7 stocks mentioned. More so, SCHD has a much lower exposure to the tech sector compared to the S&P500.
As of 2024, SCHD has 8.7% of holdings in the tech sector relative to S&P500's 30.6% exposure. Simply put, SCHD may not fully benefit from the growth brought in by the tech industry:
On the bright side, since SCHD's holdings are more balanced across different sectors (financials, healthcare, consumer staples), any fluctuation in the tech sector will have a smaller impact on SCHD's performance, compared to the S&P500.
#3 Should I choose S&P500 over SCHD?
Given the current circumstances, should one invest in the S&P500 instead of SCHD?
The short answer: it depends on your goal as an investor.
Personally, I have exposure to both S&P500 and SCHD. As explained in my investing strategies, I have a growth investing portfolio and dividend investing portfolio (a.k.a. My Freedom Fund).
To maximize growth, the S&P500 is a significant part of my growth investing portfolio. For consistent & growing passive income, SCHD is an important part of my Freedom Fund.
READ: My investing strategies as I turn 30
#4 My thoughts on SCHD as an investment
At this point, SCHD remains an important holding in my Freedom Fund as it has proven itself with a solid track record of dividend growth.
My goal while investing in SCHD has always been dividend growth first, and capital appreciation (price growth) second.
Right now, SCHD still stands as one of the few ETFs with consistent dividend growth. As such, for the time being, my thesis of investing in SCHD for growing passive income stays valid.
Would there be a time when SCHD becomes obsolete to my investing goal?
Most certainly. The moment SCHD experiences consecutive dividend cuts coupled with poor price appreciation might be the time when I consider other alternatives.
Review: 3 best alternatives to SCHD
Meanwhile, check out my review of the 3 best Ireland-domiciled dividend ETFs HERE, which could be an alternative to SCHD:
Is SCHD for you?
For more than a decade, SCHD has proven itself as an ETF with a solid track record of growing dividends, while providing respectable growth opportunities at the same time.
In my opinion, SCHD would fit well with:
- Long-term investors (>10 years of time horizon) looking to invest for a steady & growing stream of dividend income.
- Dividend investors with exposure to Malaysia and/or Singapore stocks and are looking for diversified exposure to earn dividends in USD.
How to invest in SCHD? (My go-to broker)
Investing in SCHD is easy as many brokers offer access to the US stock market.
Investors can consider Interactive Brokers (IBKR), a global broker that I use to build my Freedom Fund (my dividend portfolio).
READ MORE: Interactive Brokers (IBKR) Review
No Money Lah’s Verdict
So, how do you like SCHD?
As a dividend investor with about 15 – 20 year time horizon, I think SCHD is a gem thanks to its track record of increasing dividends (even more so in a challenging 2022!).
I hope this review has been helpful!
Meanwhile, check out my go-to broker to invest in the global market below!
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced 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.
The inclusion of Interactive Brokers’ (IBKR) name, logo or weblinks is present pursuant to an advertising arrangement only. IBKR is not a contributor, reviewer, provider or sponsor of content published on this site, and is not responsible for the accuracy of any products or services discussed.
M+ Global Review: The good, the so-so, and the perks
For the past few years, investing in the global stock market has become more accessible to Malaysians.
M+ Global is one of the latest locally-regulated platforms that offers Malaysians convenient access to the US and Hong Kong stock market.
In this post, check out my review on M+ Global, and see whether you should consider using M+ Global to invest!
Highlights:
- Backed by Malacca Securities with over 60 years of experience, M+ Global is a stock trading platform that allows Malaysians to invest in the US and Hong Kong (HK) stock markets. M+ Global (global stocks) is not to be confused with M+ Online, which offers access to the Malaysian stock market.
- Regulated in Malaysia: M+ Global is regulated locally by the Securities Commission (SC) of Malaysia. This means M+ Global has to adhere to the best practices set by the local authority to ensure the safety of clients’ funds from fraud and other illegal activities.
- M+ Global makes global investing seamless for Malaysians by introducing features like FREE real-time price data to users, 24/7 real-time news and customer support, Shariah-screener, and more.
My short verdict:
I like that the M+ Global app is very beginner-friendly to invest in the US and HK stock market. Features offered are essential and are not overwhelming, such as the implementation of Shariah screener that is especially helpful for Muslim investors.
However, the 24-hour customer service is a hit-or-miss. No fractional shares (yet) and the fee is not the cheapest compared to competitors like Rakuten Trade.
In short, M+ Global shines via a simple-to-use app, but has much to do in improving its fee structure and customer service.
🎁 Meanwhile, consider using my M+ Global referral link (via the button below) to open your M+ Global account and get a guaranteed FREE trading voucher or 1x share (worth up to RM1,200) when you open and fund your account!
5 Must-Know Features of M+ Global (The Good)
#1 Invest in a wide selection of US & Hong Kong stocks
M+ Global offers access to over 10,000 US and 2500 Hong Kong stocks & Exchange-Traded Funds (ETFs).
As such, Malaysians can now find and invest in big names like Tesla, Microsoft, Apple, Google, Nvidia, and more.
#2 Shariah-screener
M+ Global is the first digital trading platform in Malaysia to offer shariah screener for both the US and Hong Kong markets. This allows Muslim investors to search for Shariah-compliant stocks to invest in.
#3 Beginner-friendly user experience and real-time data
In my opinion, M+ Global is the most practical implementation of how a stock trading app should be: Easy to navigate and straightforward.
i. Placing trades in M+ Global is straightforward
For one, placing a trade in the M+ Global app is a breeze.
For a trading app, I prefer an interface that is not over-cluttered with features that are too small to fit on a small screen, so M+ Global got a thumbs up here when it comes to the cleanliness of the app.
ii. Complete execution order types
Unlike rival Rakuten Trade which only offers 'Limit Order', M+ Global offers both Limit and Market Orders, which makes it more versatile for different investors & traders:
iii. Stock and ETF information + 24/7 news sources
While clean, the M+ Global app provides essential information about a stock or ETF.
From price charts, analyst ratings & price targets, fundamental data, and fund holdings (for ETFs), the app has everything conveniently arranged in a way that it doesn’t overwhelm me while making an investment decision.
Not to mention, M+ Global also provides 24/7 news updates around the markets and the stocks that you are focusing on:
iv. Real-time price datafeed of stocks
New M+ Global users will also gain access to real-time (level 1) price feed for US and HK stocks for 30 days as they sign up for an account.
v. App in English & Mandarin
On a side note, did you know that the M+ Global app is available in English and Mandarin language?
#4 Margin Trading
Unlike rival Rakuten Trade which offers purely Cash-Upfront account for trading US and Hong Kong stocks, M+ Global allows users to trade on margin.
This is especially helpful for shorter-term traders that may require additional leverage in purchasing power to trade.
#5 1.85% Interest on cash (MYR)
For cash deposits in MYR, M+ Global offers a 1.85% per annual interest. It is calculated and credited to users' accounts at the end of each month.
What I wish could be better (The so-so)
#1 24-hour customer support is a hit-or-miss
M+ Global offers 24-hour customer support (CS) with the intention to assist users whenever help is required.
While the idea is good, I find the actual experience rather mixed-bag.
For one, I find that not all customer service (CS) associates are equally trained. As an example, while testing the M+ Global app, I directed a similar question to 2 different CS, and got a different outcome each time.
As a whole, I think the M+ Global team has to invest more into building their CS team. That said, M+ Global is a relatively new app in the market, and I am informed that they are upgrading their CS team - hence I will be revisiting their CS in the near future.
#2 M+ Global fee structure is just..."OK"
With more competition in the brokerage space, it is hard not to compare M+ Global's fee structure to other locally-regulated brokers that offer access to similar US and HK markets.
In this regard, I think M+ Global's fee structure is OK, but definitely not the best:
| M+ Global Fee Structure | Fees |
| US Stocks & ETFs | 0.1% of Trade Value, min. USD3.00 |
| HK Stocks & ETFs | 0.1% of Trade Value, min. HKD18.00 |
Many might compare M+ Global to close rival Rakuten Trade, which has one of the most competitive fee structures (among Malaysia-regulated platforms) at the moment:
| Trading Value | M+ Global Fee | Rakuten Trade Fee (MYR trading) |
| USD100 (~RM467) | USD3 | RM4.67 (Better) |
| USD500 (~RM2336) | USD3 | RM9 (Better) |
| USD1,000 (~RM4671) | USD3 | RM9 (Better) |
| USD2,500 (~RM11,680) | USD3 | RM11.68 (Better) |
| USD10,000 (~RM46,715) | USD10 | RM46.72 (Same) |
| USD20,000 (~RM93,580) | USD20 | RM93.58 (Same) |
| USD30,000 (~RM140,370) | USD30 | RM100 (Better) |
With competition setting such a high bar, I am sure the M+ Global team is aware of this, and hopefully will make changes to their fee structure in the near future.
#3 Exchange Rate could be better
As a platform offering access to global stocks, it is crucial that M+ Global users are able to exchange their MYR for USD or HKD (and vice versa) at a good rate while investing.
From my personal experience, I noticed M+ Global's exchange rate tends to be less ideal most of the time compared to the likes of Rakuten Trade:
Check out the exchange rate comparison on the days below for RM1,000 to USD or HKD:
| Date | M+ Global (USD) | Rakuten Trade (USD) | M+ Global (HKD) | Rakuten Trade (HKD) |
| 12/6/2023 | USD214.60 | USD215.08 | HKD1681.60 | HKD1675.04 |
| 14/6/2023 | USD214.40 | USD214.94 | (Forgot to collect data) | (Forgot to collect data) |
| 29/6/2023 | USD211.90 | USD212.56 | HKD1660.00 | HKD1661.13 |
#4 Cannot hold foreign currency (USD, HKD) (... for now)
Another minor complaint I have about M+ Global is that it is not possible (for now) to hold other currencies aside from MYR.
In other words, if you were to buy US stocks, your MYR deposits would be exchanged for USD as you make your trade.
Meanwhile, brokers like Rakuten Trade allow users to exchange to their preferred currencies (USD or HKD) anytime, so they can lock in a favorable exchange rate.
The good news is, from my understanding, this is a feature that will be introduced to M+ Global in the near future - so stay tuned!
#5 No fractional shares (... for now)
Fractional shares refer to the ability to buy shares at a fraction of a unit (eg. 0.1 unit instead of 1 unit). This makes it convenient for users with small investment capital to own relatively expensive shares like Tesla.
For the time being, there are no fractional shares available on M+ Global - all while rival Rakuten Trade has launched fractional shares not too long ago.
That said, from my understanding, this is a feature that will be introduced to M+ Global in the near future - so stay tuned!
Who should consider using M+ Global to invest?
While far from perfect, M+ Global has offered something that many local brokers failed to do: Access to the US & Hong Kong stock market via a truly user-friendly platform.
In my opinion, M+ Global is a great option if you are:
- Seeking for a Malaysia-regulated broker to invest in the US & Hong Kong stock market.
- Looking for a user-friendly platform to invest in the US & Hong Kong stock market.
- Require margin facility to invest or trade the US & Hong Kong market.
🎁 LIMITED-TIME Promo: Get FREE shares & FREE live datafeed when you open a M+ Global account! (Ending: 31/7/2024)
Give M+ Global a try and receive a guaranteed FREE share or trading voucher worth up to RM1,200 and FREE live price feed for US & HK stocks!
How to be eligible:
Step 1: Open an M+ Global account
Step 2: Make a minimum first deposit of RM2,000.
Step 3: Claim 1x guaranteed FREE share or trading voucher worth up to RM1,200, such as Tesla, Apple, and more within 7 working days.
Check out the full T&C here.
In addition, you can also claim FREE access to 30-days Level 1 live price feed for US and HK stocks!
No Money Lah Verdict: Big room for improvements for M+ Global
As an investor, I really enjoy using the M+ Global app, as the app is so easy to navigate around (Rakuten Trade, take note).
However, aside from a nice app, it is hard to give more points to M+ Global currently. This is especially true when we compare the relatively less favorable fee structure and exchange rate, alongside a lack of important features like fractional shares trading to rival Rakuten Trade.
That said, it is important to note that M+ Global has just been launched (since May 2023), and there is always space to make upgrades to the app in the near future.
For that, I am actually excited to see M+ Global coming to the global investing space, and I look forward to seeing more improvements with time!
Step-by-step: How to open an M+ Global account
Step 1: Download the M+ Global app by using my referral link (via the button below):
Step 2: Register for an account and set up your password
Step 3: Begin your application by entering your basic details, and determining the markets you want to trade.
If you do not require margin (ie. borrow money from the broker) to trade, you can choose to untick the 'Share Margin Financing Account' option.
Step 4: Provide the necessary details such as your employment details, financials, and tax details
Step 5: Review, accept, and sign the agreements
Step 6: New M+ Global users will have to pay a CDS account opening fee of RM11. Existing M+ Online users who are opening an M+ Global account do not have to pay this fee since they already have a CDS account under M+.
Step 7: Your application will be reviewed within 1 - 3 working days. Once approved, you can start trading.
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. The information stated above is based on my personal experience and for purpose of sharing such experience only. It is not intended as professional investment advice. Please contact M+ Global for more information.
Moomoo Malaysia (MY): 5 must-use features that will change how you invest!
Moomoo Malaysia, one of the fastest-growing investment platforms has recently expanded to Malaysia and is open for trading for the US and Malaysia stock markets!
In this post, let me show you my top 5 favorite features within the Moomoo app that will help you become a better investor!
RELATED POST:
Highlights of Moomoo MY:
- Locally-regulated broker: Moomoo MY is regulated by the Securities Commission Malaysia (SC). This ensures that Moomoo MY’s operation and business are conducted within the rules set by the authority to protect Malaysian investors.
- Access to US and Malaysia stock markets: Invest in the US and Malaysia stock markets within the Moomoo app.
- Best fee structure for Malaysia-regulated brokers: Moomoo MY offers the most competitive fees for the US and Malaysia stock markets among Malaysia-regulated brokers, with 0 commission trading for all Moomoo users for the first 180 days.
- Powerful features: Investors of all levels and experience will appreciate the useful features that will alleviate their investing experience, such as a powerful stock screener, 24/7 news, Moo community, and more.
My short summary:
I am pleasantly impressed by how the Moomoo trading app can offer so many feature-packed tools while keeping the app so simple to navigate around.
It is truly one of the most feature-rich yet easy-to-use investing apps available in the market now.
My Top 5 Favourite Features of Moomoo MY:
Feature #1: FREE level 2 US market data when you register for your Moomoo MY account
While most brokers will make users pay for level 2 data, Moomoo MY gives you level 2 US market data for FREE when you register for your account.
What exactly is Level 2 US market data?
Essentially, Level 2 US market data allows you to see transaction details (ie. Buy & sell activities) across multiple price levels:
Having level 2 US market data is equivalent to having an aerial view of the market. For instance, with Level 2 US market data, you can detect in real-time should buyers are buying aggressively (or vice versa) and make better entry decisions.
In short, with level 2 US market data, you can get a better gauge of market strength.
Feature #2: Get big-picture business views via 'Industry Chain'
'Industry chain' is also one of my favorite features in the Moomoo app. With Industry chain, you can have a big-picture view of a specific industry.
For instance, you can instantly learn how the whole Electric Vehicle (EV) industry work, alongside companies that fall under each segment.
In addition, you can also discover what companies are there in a specific role in the business chain in an ecosystem.
Simply put, you can gain a big picture of any industry that you are interested to learn.
Where to find: 'Markets' > 'US' > 'Industry Chain'
Feature #3: Track the performance & insights of a specific theme with 'Concepts'
Concepts is a unique feature within the moomoo app that allows you to track the overall performance and news of companies that fall under a specific theme, such as 'EV charger', 'Gene Editing', 5G, and more:
As an example, check out how I can view the overall & individual performances of the companies that fall under the ‘EV Charger’ concept:
With Concepts, you can have a clear view of how certain themes perform, as well as research for a specific theme with ease - all within the moomoo app.
Where to find: 'Markets' > 'US' > 'Concepts'
Feature #4: See what other investors are doing with Market Position Overview
Another useful feature of the Moomoo app is Market Position Overview. Essentially, it shows the number of shares held at different prices by investors in an easy-to-see visual.
As an example, in this example of Apple (AAPL) stock below, we can see that most Apple shareholders are in a profitable position (shown in green), as their entry price is below the market price ($195).
In addition, you can also spot the price where most investors bought their shares based on how long the horizontal bar is:
Where to find: Search for a stock > 'Market Position Overview'
Feature #5: One of the most flexible stock screeners around
The stock screener within the Moomoo app also impressed me. This screener can be super simple, or as sophisticated as you want.
From fundamental to technical filters, you can filter for stocks based on your preferred criteria:
It is definitely one of the most complete stock screeners within an investing app that I’ve used in my investing journey so far.
Where to find: 'Markets' > 'US' > 'Screener'
Other useful features within the Moomoo app:
- #1 Gauge bearish sentiment via Short Sale Analysis
Short sale analysis is a solid feature that allows you to identify (i) the volume of a company’s shares that are being shorted in the market, and (ii) the percentage of shares that are being shorted but not yet closed (ie. People that are betting for the market to go down) in the market.
This is a very useful feature to gauge the market's bearish sentiment on a specific stock.
Where to find: Search for a stock > 'Short Sale Analysis'
- #2 Use Trade Overview to confirm your conviction
With Trade Overview, you can identify the movement of funds in and out of a specific stock.
Furthermore, you can go further by looking at the capital flow breakdown of XL, L, M, and S orders.
This can give you an idea of whether the stock you are looking to buy has the conviction of other players (big or small) in the market.
Where to find: Search for a stock > 'Trade Overview'
- #3 Get real-time, 24/7 financial news in the moomoo app
It is also extremely convenient to get the latest financial news in the moomoo app.
Even better, the news is real-time and updated 24/7, making it easy for you to get in touch with the latest updates of the market and the companies that you are investing in.
Where to find: 'Discover' > 'News'
Disclaimers
All views expressed are the independent opinions of myself, which are not necessarily shared by Futu Malaysia Sdn. Bhd. ("Moomoo MY"). No content shall be considered financial advice or recommendation. Moomoo MY links are included in this post, through which referrals are made and I may receive certain commissions. Please contact Moomoo MY for more information.
ProsperUs Review: One account to invest globally!
As an investor, the more markets and instruments that we have access to, the easier it is for us to participate in various market opportunities.
To do so, we need a broker that offers different markets, and, ideally, a brand that we all recognize.
Is there such a broker?
In this week’s post, let’s look ProsperUs, a broker with one of the most complete offerings for investors!
Before this, here are some related posts that you may want to read:
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ProsperUs Highlights
- ProsperUs offers access to a huge list of markets, from the US, HK, China, Singapore, Australia, Canada, Germany, Europe, UK, Japan & Malaysia.
- In addition, ProsperUs users also gain access to a huge variety of products/instruments (stocks, bonds, ETFs, mutual funds, CFD, FX, futures, and options) at a competitive fee.
How is ProsperUs regulated + Safety of Funds
Being an offering from an established brand, ProsperUs is a well-regulated broker.
ProsperUs is regulated by the Monetary Authority of Singapore (MAS), with a Capital Markets Services License to operate a legal brokerage business.
This ensures ProsperUs is operating under the best practices and guidelines set by the Singaporean authorities.
In addition, ProsperUs takes the security of funds seriously. All users’ funds and assets (eg. Shares) are held in a trust account that is separate from ProsperUs’ business assets.
In other words, ProsperUs will not have access to your funds and assets, ensuring clear transparency to avoid fraud. This also ensures that if something happens to ProsperUs (eg. Bankruptcy), your funds & assets will not be affected.
Access to a huge selection of Products & Markets
You name it, you get it.
With one ProsperUs account, you get instant access to different markets and asset classes over a huge selection of countries.
As a start, with a ProsperUs account, you’ll get access to major markets, including:
- North America: US, Canada
- Asia: Malaysia, Singapore, Hong Kong, China, Japan, Australia
- Europe & UK
Furthermore, ProsperUs offers a huge selection of instruments to invest or trade with, namely:
- Stocks
- Bonds
- Exchange-Traded Funds (ETFs)
- Mutual Funds
- Contract For Difference (CFD)
- Forex (FX)
- Futures
- Options
With this huge line of offerings, ProsperUs can certainly satisfy the needs of most investors and traders.
ProsperUs fees & commission
As for commissions/fees, ProsperUs offers 3 different fee tiers, namely:
- Rookie: SGD19,999 and below
- All-Star: SGD 20,000 – 50,000
- Hall of Fame: SGD50,001 and above
Below, I’ll list the commissions charged for equities (stocks and ETFs) in all the markets offered by ProsperUs:
[Update January 2022] From 2022 onwards, ProsperUs has updated their pricing with a minimum fee structure for all exchanges except for the US and Singapore stock market.
In terms of fees, I think ProsperUs' commissions are highly competitive for investors looking to invest in the Singapore stock market.
As for the US market, I think the USD 5 flat commission is not as competitive as the likes of Rakuten Trade and Interactive Brokers (IBKR).
In addition, ProsperUs also provide access to instruments such as Bonds, Mutual Funds, Futures, Options, CFDs, and Forex (FX). To check out ProsperUs’ full pricing list, click HERE.
Features (Boost and Build)
An interesting feature of ProsperUs is there are 2 different interfaces that you can choose from depending on whether you are investing or trading.
For investing, there is Build where everything is designed for the essentials of longer-term investing.
Through Build, you can easily search and filter for trade ideas not just in stocks, but also in ETFs, bonds, and mutual funds.
Taking a position is also simple and straightforward.
As someone using ProsperUs to invest for the long-term, I think Build is really simple and straightforward to use. There is a very minimal learning curve and I believe most people would be able to find what they are looking for easily.
As for trading, there is Boost which provides a slicker interface designed for quick trading actions and activities.
Through Boost, you get a more sophisticated interface for charting and execution compared to Build.
That said, since I do not take short-term trades on ProsperUs, I’ll have to reserve my opinion in a more detailed walkthrough and guide for Boost in the future.
Customer Support
ProsperUs’ customer support is decent too.
If you have any questions, you can always submit an inquiry via email form when you are logged in (Help > Contact Us) or via [email protected].
From personal experience, all my inquiries got answered within 1 working day.
What I like about ProsperUs
As a whole, coming from an established and familiar brand (CGS-CIMB), I think investors and traders will appreciate the flexibility and huge access that ProsperUs has to offer.
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One account to access all the markets:
Firstly, ProsperUs offers access to the global market and a huge variety of instruments.
From stocks, bonds, and ETFs, to derivatives like CFD, Futures, FX, and options, you can literally explore different market opportunities with just one single account – no hassle!
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Decent commission structure:
If you are troubled by the expensive fees from local brokers to invest in the foreign market, ProsperUs will be a much more affordable choice, especially to invest in the US and Singapore stock market.
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User-friendly:
Even with all the offerings, ProsperUs’ platform is especially easy to navigate around. The learning curve is minimal and beginners will be able to find what they need easily.
What can be improved
-
Live chat for Customer Inquiries
While the existing customer support channel is decent, but it'd be even better if ProsperUs has more options for customers to reach out to them.
Personally, I think it’d be great if there is a live chat feature available to resolve customers’ inquiries.
Who should open a ProsperUs account?
Given the access to a huge variety of markets and instruments, ProsperUS is most likely going to satisfy the needs of most investors. To be more specific, ProsperUs is suitable for:
- Investors looking to invest in different markets and instruments with the convenience of one single account.
- Investors that want their broker to be regulated by proper authorities (MAS).
- Investors looking to invest in certain markets that are not offered by many other brokers. As an example, ETF investors (like myself) looking to invest in S&P500 ETF (eg. CSPX, VUAA) listed on the London Stock Exchange instead of the ones listed in the US due to tax reasons.
- Investors/traders who are looking to explore instruments aside from the usual stocks and ETFs. ProsperUs also offer instruments like unit trust, CFD, FX, options, and futures for more sophisticated investing or trading needs.
Exclusive ProsperUs Referral Code – MONEY20
Here’s a reward exclusive to No Money Lah readers – you will not find this anywhere else!
From today till 30/9/2024, key in my exclusive promo code ‘MONEY20’ while you register, and get FREE cash credits up to SGD100 when you open a ProsperUs account:
Tier Initial funding within 30 days of account set up Trades Executed Cash Credits
1 Minimum SGD500 – SGD2,999 Minimum 3 trades executed SGD10
2 Minimum SGD3,000 – SGD14,999 Minimum 3 trades executed SGD20 (Deposit SGD3000 or more), OR
SGD20 + SGD30 (Deposit SGD3000 or more + Min. trades fulfilled)
3 SGD15,000 or more
Minimum 3 trades executed SGD20 (Deposit SGD3000 or more), OR
SGD20 + SGD100 (Deposit SGD15,000 or more + Min. trades fulfilled)
Click HERE to view the full T&C of this referral reward. Personally, I think this is a great deal if you are planning to open an account to start investing globally!
Open a ProsperUs Account Today!
Eligibility + How to open a ProsperUs account
Anyone aged 18 years old and above can open a ProsperUs account.
That said, a quick note if you are between 18 to 20 years old:
For this age group, you’ll be classified under ProsperUs’ Young Investors Segment. Essentially, after you complete the steps below, you are also required to fill in a short additional form that’ll be sent to you via email & be given a walkthrough on the risks involved by the ProsperUs team.
So, here are the documents/details you’ll need to sign up for a ProsperUs account:
- IC/National ID
- Tax Identification Number (TIN), if you have one.
- Utility or telco bill as proof of residency
Step 1: Sign up for a ProsperUs account
Click the button below to sign up for your ProsperUs account. Similarly, you can install the ProsperUs app in Google Playstore or App Store.
Open a ProsperUs Account Today!
Step 2: Select your country of residence & citizenship. This is where you can key in promo code 'MONEY20' for exclusive rewards.
Step 3: Key in your personal & employment details.
For the currency to invest in, select SGD for the ease of funding later. (p.s. You can always open a USD currency account later by writing an email request to ProsperUs)
Step 4: Key in your tax details.
Tax Identification Number (TIN) is your LHDN tax number. Let's say you are still studying and do not have a TIN, select ‘YES’ as well, and key in your IC number/National ID instead.
Step 5: Investment Product Experience
Fill in your education background, investment objective, and risk appetite. Based on this information, you’ll be given a list of products that you'll get exposure to.
Generally, instruments like futures, FX, and options are more complex and require you to have a certain educational background or investing experience.
Step 6: Agree to T&C and upload documents (IC & proof of residencies such as Utility or telco bill)
Step 7: Create your user login details
Upon successful registration, you'll be notified to create your login username & password.
Step 8: Fill in W-8BEN Form to access the US stock market
*W-8Ben form: Filling in the W-8 Form is a requirement by the US Inland Revenue Service for account holders to declare that the beneficiary owner of the amount received from US sources is not of US origin. For investors who want to trade the US markets, they will need to complete this form.
Log in to your newly created ProsperUs account. You'll be prompted to fill in the W-8BEN form. Alternatively, you can submit the form by going to 'My Account' > 'W-8BEN Certification' > 'Submit Now'.
While submitting the W-8BEN form, you are required to provide your Tax Identification Number (TIN). If you are a student and do not have a TIN number, tick ‘the account holder is not legally required to obtain a TIN’ section and give a reason why you do not have a TIN number (eg. You are a student).
How to Fund & Withdraw Funds from ProsperUs
Funding and withdrawal from your ProsperUs account can be done either via our local bank account or via a Singapore bank account (recommended).
Check out my step-by-step guide on how to fund your ProsperUs account, and how to withdraw funds from ProsperUs.
READ: The complete funding & withdrawal guide for ProsperUs
No Money Lah’s Verdict
So, are you looking for flexibility to access different markets from a broker backed by an established brand? If yes, definitely give ProsperUs by CGS-CIMB a try!
Regardless of your investment needs, I am almost certain that you’ll find a market or instruments that suit your preferences via ProsperUs.
Keen to give ProsperUs a try? Consider using my exclusive referral code ‘MONEY20’ when you register for your account!
Open a ProsperUS Account Today!
Disclaimers:
Past return is not indicative of future performance.
This post may contain affiliate links/codes that afford No Money Lah a small amount of referral (and help support the blog) should you sign up through my referral code.
Versa Cash & Cash-i Review: Great Alternatives 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 time, or requires a high initial deposit to start with.
In this article, let’s look into Versa Cash and Versa Cash-i, a great alternative to FD in Malaysia. Personally, I've been using Versa since 2021 and I absolutely love it! In this post, let's explore if Versa is for you!
[NEW: Get 4.0% promo return rate with Versa Cash & Cash-i! Find out more at the end of this post!]
Highlights of Versa Cash & Versa Cash-i
Introduced in 2021 and 2023 respectively, Versa Cash & Versa Cash-i are digital cash management services that provide users competitive returns like FD, but without the troublesome restrictions:
- Regulated: Versa is regulated by the Securities Commission (SC) of Malaysia.
- Conventional & Shariah-compliant version: Versa Cash is a conventional fund, while Versa Cash-i is a Shariah-compliant fund.
- Competitive Return: Through Versa Cash and Cash-i, users can earn a base net return between 3.24% - 3.69% per annum, which is on par with the rates of Fixed Deposit (FD).
- Low Risk: The underlying funds of Versa Cash and Cash-i are money market funds from AHAM Capital (formerly known as Affin Hwang). These funds invest users’ money in highly liquid & low-risk cash instruments.
- 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.
How do Versa Cash & Versa Cash-i work?
So, how exactly are Versa Cash and Cash-i 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 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. Regular redemption of matured Money Market Instruments allows MMF to provide a similar rate to FDs without having to lock up users’ capital.
For Versa Cash & Cash-i, the underlying MMFs that they invest in respectively are:
- Versa Cash: AHAM Enhanced Deposit Fund by AHAM Capital Asset Management (formerly Affin Hwang)
- Versa Cash-i: AHAM Aiiman Enhanced i-Profit Fund by AHAM Capital Asset Management
In short, through Versa Cash and Cash-i, 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.
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 guidelines 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 and Cash-i do not charge a fee to users. That said, both underlying MMFs do charge reasonable annual fees, as shown below:
| Versa Cash (% per annum) | Versa Cash-i (% per annum) | |
|---|---|---|
| Management fee per annum |
-0.30% |
-0.30% |
| Trustee fee per annum |
-0.05% |
-0.05% |
| Base net return per annum (AFTER fees) |
3.69% |
3.24% |
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:
- Versa Cash: Within 1 business day if withdrawal is done before 3pm
- Versa Cash-i: Within the same day if withdrawal is done before 10am
At this point, perhaps a question that you have in mind is “So how does Versa make money?”.
Aside from Versa Cash and Versa Cash-i (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 & Versa Cash-i
#1 Performance on par with conventional Fixed Deposits (FDs)
Through Versa Cash and Cash-i, interests are compounded daily and interest payout is made every month, which is re-invested into the user’s fund.
All of this combined, Versa Cash and Cash-i offer a base net return of 3.69% and 3.24% return per annum (AFTER fees) for users, as of December 2023.
#2 Flexible & Low barrier of entry
2 amazing features of Versa Cash and Cash-i are:
- Low barrier of entry: You can start investing or saving with Versa from as low as RM1. Even better, using my exclusive referral code VERSANML4, you can get RM10 credited into your Versa account when you make a minimum deposit of RM100!
p - Flexible: There are no charges to open a Versa account. In addition, you can withdraw your funds anytime and there are no fees for 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).
#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 financial 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 Cash without hesitation. This is because I know she can navigate the app with clarity & confidence.
Risks + What You Need to Know Before Investing in Versa Cash & Cash-i
In this part, let’s look at 3 things that you need to be aware of while investing your money with Versa Cash and Versa Cash-i:
#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 rates. As an example, if Bank Negara Malaysia (BNM) increases interest rates, MMF is likely going to generate higher returns. On the flip side, if BNM reduces interest rates, it’ll also affect the returns of MMF as a result.
#2 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.
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, are Versa Cash and Cash-i for you?
To answer this question, it is best to first know what Versa Cash and Cash-i are NOT:
- Versa Cash and Cash-i do not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect mutual fund/robo-advisors-like returns.
- Versa Cash and Cash-i do not guarantee returns. Even though it invests in low-risk MMF, returns are still subjected to market fluctuation.
Hence, in my opinion, Versa Cash and Cash-i are great for:
- People looking for a flexible alternative to FD & typical savings account for general savings
- People looking to save for a specific goal (eg. house, car, wedding)
- People with extra cash and want to save it for the short-term
Versa Promo Code: VERSANML4
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 – VERSANML4, 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.
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 'VERSANML4' for an exclusive RM10 account-opening reward!
Step 2: Start your account opening process by keying in the necessary details such as a new display name, email address, and password.
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 Cash, StashAway Simple or KDI save?
In terms of offering, Versa Cash and Cash-i’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
No Money Lah’s Verdict
So there you have it, my review on Versa Cash and Versa Cash-i! 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!
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.