Chin Yi Xuan

Tiger Brokers Review: Affordable & Reliable Way to Invest in the Singapore, US and Hong Kong Stock Market!

In this article, let's look at my review of Tiger Brokers, a broker that provides affordable access to foreign stock market, while having strong regulations in place.

As an investor, I have always been looking for the most affordable way to invest in the overseas stock market.

This is especially true for me as a Real Estate Investment Trust (REIT) enthusiast, as having affordable access to Singapore, Hong Kong and the US stock market will allow me to invest in many attractive REITs globally.

At the same time, I also have concerns about the regulatory issue of foreign brokers, which of course relates to the safety of my funds.

 

Tiger Brokers come in to fit my needs nicely. Here's my updated review of Tiger Brokers after using it for more than 2 years:

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Tiger Brokers Highlights:

  • Exposure to different markets & instruments with just one account. (Singapore, US, Hong Kong, Australia & China stock market, Futures, Warrants & Options)
  • Highly competitive and attractive fees. 
  • 100% online account opening & management. No visit to the branch is required.
  • Strong regulatory background + company is publicly listed on NASDAQ.

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[PROMO] Commission-free trades + Free stocks! 

Click the button below to use my Tiger Brokers referral link, and get the following when you open a new account (promo ending on 30/4/2025)!

a. Cumulative Net Deposit (SGD3,000 - 9,999):

  • Instant Reward: Total SGD100 in Stock Commission Card when you make your first deposit and within 30 days. Reward will be activated immediately after it is issued and will be valid for 90 days.
  • Retention Reward: Total SGD100 (2x SGD50) in Cash Voucher when you make your first deposit and within 30 days. Rewards can only be activated if the net deposit reaches S$3,000 or more for 60 consecutive days. It will be valid for 60 days after activation.

b. Cumulative Net Deposit (SGD10,000 - 99,999):

  • Instant Reward: Total SGD200 (2x SGD100) in Stock Commission Card when you make your first deposit and within 30 days. Reward will be activated immediately after it is issued and will be valid for 90 days.
  • Retention Reward: Total SGD200 (4x SGD50) in Cash Voucher when you make your first deposit and within 30 days. Rewards can only be activated if the net deposit reaches S$3,000 or more for 60 consecutive days. It will be valid for 60 days after activation.

c. Cumulative Net Deposit ≥SGD100,000

  • Instant Reward: Total SGD500 (5x SGD100) in Stock Commission Card when you make your first deposit and within 30 days. Reward will be activated immediately after it is issued and will be valid for 90 days.
  • Retention Reward: Total SGD500 (10x SGD50) in Cash Voucher when you make your first deposit and within 30 days. Rewards can only be activated if the net deposit reaches S$3,000 or more for 60 consecutive days. It will be valid for 60 days after activation.

Open A Tiger Brokers Account Today!

Tiger Brokers Regulation – How is Your Money Protected?

Let’s address the main concern of most investors when it comes to choosing a foreign broker – is it regulated by a proper/respected authority?

When it comes to their operation in Southeast Asia, Tiger Brokers is regulated by the Monetary Authority of Singapore (MAS), with a Capital Markets Services License to operate a legal brokerage business. Globally, Tiger Brokers is also regulated by the respective authorities from the US (SEC), Australia (ASIC), and New Zealand (FSPR) as well.

In short, Tiger Brokers is a well-regulated broker by proper authorities and is definitely way better than the brokers registered in some random African countries.

In regard to money/capital protection, there is strict segregation of clients’ capital and assets apart from Tiger Brokers’ own capital:

  • Clients’ Capital: Kept by DBS Commercial Bank
  • Clients’ Investment Assets:

- Singapore Stocks: Held by DBS Custodian Bank

- US Stocks: Held by Interactive Brokers

- HK Stocks: Held by Interactive Broker

To summarize, Tiger Brokers is held by a high standard of regulations and accountability towards clients’ assets and capital. As such, I have no problem recommending Tiger Brokers to fellow investors looking to invest in foreign markets.

Tiger Brokers Fees/Commission Comparison – Amazing Value & Highly Competitive Fees

Ultimately, what landed me on Tiger Brokers is its highly competitive commission.

While there are local brokers that offer exposure to foreign markets, they are super expensive (high barrier of entry), and the fee details are rarely available on their official websites (not transparent at all). As someone looking to invest affordably in the Singapore, US, and Hong Kong market, Tiger Brokers is certainly worth considering.

Below is the commission comparison table of Tiger Brokers alongside some other equally regulated (by MAS of Singapore) alternatives:

2022 Fees charged by respective brokers*

Tiger Brokers (SG)
[0 Commission Promo + Platform fee only]

 Moomoo (SG)

POEMS Starter by Phillip Securities (SG)

Maybank Global Investing (Malaysia)***

Singapore Market

0.03%, or min. SGD1.00/trade

0.06%, or min. SGD2.49/trade

0.08%, or a minimum of SGD 10/trade**. (**No minimum charge until 31/12/2022)

SGD25, or minimum 0.40%/trade – whichever is higher.

US Market

USD 0.005/share, or a minimum of USD 1.00/trade.

USD 0.01/share, or a minimum of USD 1.99/trade.

Flat USD 3.88/trade

SGD25, or minimum 0.40%/trade – whichever is higher.

Hong Kong Market

0.03%, or a minimum of HKD 8/trade.

0.03%, or a minimum of HKD 18/trade.

0.08%, or a minimum of HKD 30/trade.

N/A

*Stated are fees charged by the brokers themselves. Please note that there are also additional (albeit minimal) fees charged by the respective exchanges in a transaction. (More details HERE) ***Based on my best research since I cannot find any official foreign stock fee structure from local brokers’ website. If you are interested, do approach your respective local brokers for more info.

Tiger Brokers Options Trading Pricing

In addition to stocks, Tiger Brokers also offers options trading at an affordable pricing of USD 0.65 per contract for US options!

Tiger Brokers options trading fee

Open A Tiger Brokers Account Today!

How to Open a Tiger Brokers Account?

a. Account Types

There are 2 types of trading accounts offered by Tiger Brokers, namely:

  • Margin Account (eligibility: 21 – 65 y/o)

Margin Account supports margin trading and short selling (intraday leverage up to 4x; overnight leverage up to 2x).

  • Cash Upfront Account (eligibility: 18 – 75 y/o)

Cash Account only allows trading stocks with cash. Margin trading and short selling are unavailable.

In short, you invest or trade with what you have deposited in your account.

If you are below 21 y/o currently, you can open a Cash Upfront Account first, then upgrade to a Margin Account once you reach 21, along with a full-time job.

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b. Account Opening Process

The account opening process does take some time, but it is simple & straightforward. Spare around 15 – 20 minutes to prepare the documents needed to smoothen your account-opening process.

If this is your first time opening a foreign brokerage account, I highly recommend you to follow the steps below – as I’ll explain some potential terms that you may not be familiar with:

Step 1: Prepare for the Documents/Details

  • Nationality/Full Name/Current Residential Address/Citizenship/Date of Birth/IC Information
  • Employer’s name and address
  • Details of assets and income
  • Investment objectives and experience
  • Proof of Identity (IC/Passport)
  • Proof of Residential Address (IC/Residential Estate Certification/Utility Bills - eg. Water/Phone Bill within the past 6 months, showing your full name & address)
  • Bank Statement (issued within the past 6 months, showing your full name & address)

Step 2: Open a Tiger Brokers Account 

Click HERE to use my Tiger Brokers referral link so you can enjoy account opening rewards!

When you click on the referral link, the rewards will be automatically applied and you can start your account opening process.

 

 

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Step 3: Key in Your Nationality & Tax Residency Country.

Tax Identification Number (TIN) is your local tax number. If you are still studying, or do not have an account yet, just tick ‘I don’t have a TIN’ and state your reasoning.

 

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Step 4: Key in Your Personal Info & Employment Details.

 

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Step 5: Decide if you want to open a Margin Account or a Cash Account.

Also, decide if you need access to instruments like Futures and Warrants (p.s. just tick ‘No’ if you don’t know what these are).

 

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Step 6: Read and proceed after you agree to the conditions of the W8-Ben form*.

*What is W-8Ben form?

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

 

Step 7: Upload the necessary documents.

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Step 8: Verify your identity by scanning your face. Follow the steps as shown below:

 

 

 

Step 9: You are done!

Generally, the account will be opened within 1 to 3 business days after the account opening application is submitted.

You will receive an SMS & email notification upon a successful account opening. Alternatively, you may log in to Tiger Brokers' official website to check your account opening status.

How to Fund Your Tiger Brokers Account

After your account is approved and opened, the next thing that you’d want to do is to fund your account. There are 2 main ways for you to fund your Tiger Brokers account:

Method 1 (recommended): Funding Tiger Brokers via a Singapore Bank Account (CIMB SG)

The first, and my recommended way to fund your Tiger Brokers account is through a Singapore bank account. 

The deposit experience is fast, and you'll also save on the expensive intermediary banking fees (SGD20/USD30) that incur when you use FTT via a Malaysia bank account. 

Check out my detailed guide on:

The whole process may take some time but trust me, the savings are going to be worth it.

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Method 2: Funding Tiger Brokers via Foreign Telegraphic Transfer (FTT) through Malaysia banks

In the following section, I'll show you how to fund your Tiger Brokers account via FTT through local banks. That said, I do not recommend this method due to expensive intermediary banking fees (SGD20/USD30) per transfer. 

If this is your first time, the process may be a little intimidating for you so I’ve created a step-by-step for you below:

 

Step 1: Open your Tiger Brokers app

Step 2: Select ‘Me’ at the bottom right corner > Tiger Account

 

Step 3: Select ‘Deposit’

 

Step 4: Select to deposit in the currency of your choice (SGD/USD/HKD).

Step 5: Select ‘Other Overseas Bank Accounts’

Step 6: You’ll be shown the remittance/transfer details.

Remember to key in the payment reference correctly when you do your transfer in Step 7!

 

Step 7: Do the remittance from your bank via FTT.

A standard FTT fee will be charged for every FTT transfer. Aside from that, there are 2 things to take note of:

  • Generally, the transfer will take between 1 – 3 days but from my experience, it only took several hours for my deposit to reflect in my Tiger Brokers account.
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  • For all these FTT transfers, Tiger Brokers do not charge for the whole funding process. However, our banks’ appointed intermediary bank will be charging a clearance fee (varies according to banks). For me (Maybank FTT), it is SGD20 for SGD transfers and $30 for USD transfers.

In short, the total cost for my FTT transfer via Maybank is (1) Standard FTT fee + (2) SGD20 (SGD transfer)/$30 (USD transfer). Again, this is NOT a fee from Tiger Brokers but it's a clearance fee charged by the banks. 

As you can see, this is the reason why I do not recommend funding your Tiger Brokers account via local FTT. Instead, save on these fees by checking out my guide on how to fund your Tiger Brokers account through a Singapore bank account. 

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Step 8: Inform Tigers Broker to check for your deposit upon transfer + upload transfer receipt

 

Step 9: You are done! You will receive an email once your deposit is accepted.

How to withdraw from Tiger Brokers

Personally, I'd recommend withdrawing your funds from Tiger Brokers via a Singapore bank account, for several key reasons:

  • Direct withdrawal to a local bank (non-SG banks) will incur an expensive intermediary banking fee of around SGD35 (SGD withdrawal) or USD25 (USD withdrawal). In comparison, there are no fees on withdrawal to a Singapore bank account.
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  • Direct withdrawal to a local bank (non-SG banks) can take about 1 - 3 days. On the other hand, withdrawal to a Singapore bank account (during business hours) can happen within the same day (though officially it mentions 1-3 business days). 

Again, if this is your first time planning to open a foreign stock account, just know that these caveats (fees) on deposit & withdrawals apply to all foreign stock brokers, not just Tiger Brokers. That's why I highly recommend opening a Singapore bank account if you are planning to invest overseas. 

READ: How to withdraw funds from Tiger Brokers to a Singapore bank account 

Who Should Open a Tiger Brokers Account?

As a whole, Tiger Brokers offers investors exposure to various foreign markets at an affordable package, while retaining the much-needed regulatory aspects at the same time.

As such, Tiger Brokers is suitable for:

1. Investors with some experience in the local stock market, and are looking to diversify to (either/or) the Singapore, US, Hong Kong, China, and Australia market at an affordable rate.

2. Investors that are currently using expensive local brokers to invest overseas, and are looking for a more competitive rate to reduce investing cost.

3. Investors that are ready to invest in foreign markets and want their broker to be regulated by proper authorities.

My Tiger Brokers Experience + Things to Improve

Having used Tiger Brokers for almost 2 years now, my experience with them has been largely decent.

Execution of trades is smooth and fund transfers are also easy. That aside, I’d want to focus this discussion on 3 particular parts of Tiger Brokers: the mobile app, desktop app & customer support.

(a) Tiger Trade Mobile App

For the most part, I love the mobile app from Tiger Brokers. The interface is relatively simple and intuitive, and most of the functions you need are easy to navigate and find.

Personally, even as someone that does not execute trades on mobile apps (I still prefer web/desktop), I find the design language of the mobile app better than the desktop interface.

(b) Tiger Trade Desktop App

Personally, when it comes to execution, I still prefer to stick with the desktop/web app of my brokers.

That said, at first glance, Tiger Brokers' desktop app can be a tad more daunting than its mobile counterpart. This is because the layout tends to be more informative compared to the mobile app.

In other words, new investors may get overwhelmed at first. There is some learning curve involved, but it is definitely manageable – and you’ll come to appreciate the layout once you are familiar with how everything works.

The desktop app of Tiger Brokers

(c) Customer Support

There are 2 ways to reach out for help to Tiger Brokers, namely via their hotline (tel:+65 6950 0591) or email support ([email protected]).

I have been using the email support service for inquiries many times (personal inquiries & also in preparation for this article), and the response time has been decent. Generally, most of my emails during working hours are responded to within an hour or 2, or else they’ll be replied to on the next day.

One thing that I hope could be improved though, is how they explain/clarify questions. There are instances where when I asked about a more technical issue/jargon, and was replied with a more expanded (not simplified) explanation.

With businesses going online nowadays, I think it is more important than ever for companies to invest in improving customer support, especially in understanding customers’ perspectives and providing simplified support to inquiries.

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(d) Can't access or log in to your Tiger Brokers account/platform? 

Lately, several readers have reached out to me with an issue where they are unable to log in to their Tiger Brokers account/platform.

Personally, I do not have this problem but I am made aware that this is an issue with selected internet providers (eg. Unifi) that randomly blocked out certain sites for no logical reasons. 

To solve this problem, simply download a VPN application on your computer and phone (eg. Proton VPN, Windscribe, and many more). Then use the VPN software to connect to another country.

Once you have done that, accessing your account shouldn't be a problem anymore.

Tiger Coins - Tiger Brokers' Built-In Reward System

Tiger Brokers has recently launched its built-in reward system - Tiger Coins, where you can collect when you complete certain tasks. 

With Tiger Coins, you can redeem attractive rewards from Stock Vouchers to commission-free trades!

Tiger Brokers has just released its built-in reward system - tiger Coins.
Tiger Brokers has just released its built-in reward system - Tiger Coins.

No Money Lah’s Verdict

So here you go – my in-depth review of Tiger Brokers!

As someone looking to gain exposure in foreign markets, Tiger Brokers is truly a decent overall package that offers highly competitive fees with solid regulatory backing.

Having invested via Tiger Brokers for almost 2 years now, Tiger Brokers is my go-to broker for foreign stock investments and I have no problem recommending them to investors that is keen to gain foreign market exposures – all without paying expensive commissions.

If you have any questions on Tiger Brokers, feel free to leave a question in the comment section below! Constructive feedback are welcomed as well :)

Tiger Brokers Referral Link

Planning to open an account?

Click the button below to use my Tiger Brokers referral link, and get the following when you open a new account (promo ending on 30/4/2025)!

a. Cumulative Net Deposit (SGD3,000 - 9,999):

  • Instant Reward: Total SGD100 in Stock Commission Card when you make your first deposit and within 30 days. Reward will be activated immediately after it is issued and will be valid for 90 days.
  • Retention Reward: Total SGD100 (2x SGD50) in Cash Voucher when you make your first deposit and within 30 days. Rewards can only be activated if the net deposit reaches S$3,000 or more for 60 consecutive days. It will be valid for 60 days after activation.

b. Cumulative Net Deposit (SGD10,000 - 99,999):

  • Instant Reward: Total SGD200 (2x SGD100) in Stock Commission Card when you make your first deposit and within 30 days. Reward will be activated immediately after it is issued and will be valid for 90 days.
  • Retention Reward: Total SGD200 (4x SGD50) in Cash Voucher when you make your first deposit and within 30 days. Rewards can only be activated if the net deposit reaches S$3,000 or more for 60 consecutive days. It will be valid for 60 days after activation.

c. Cumulative Net Deposit ≥SGD100,000

  • Instant Reward: Total SGD500 (5x SGD100) in Stock Commission Card when you make your first deposit and within 30 days. Reward will be activated immediately after it is issued and will be valid for 90 days.
  • Retention Reward: Total SGD500 (10x SGD50) in Cash Voucher when you make your first deposit and within 30 days. Rewards can only be activated if the net deposit reaches S$3,000 or more for 60 consecutive days. It will be valid for 60 days after activation.

Open A Tiger Brokers Account Today!

 

READ: How to make your first trade on Tiger Brokers?

Disclaimer:

This post contains affiliate link(s). As always, I’d only recommend tools and financial solutions that I personally use AND/OR are interesting & provide unique value to my readers. Every article takes a long time and effort to write and when it comes to financial solutions, I’ll only invest time in writing about good and relevant products.

by Chin Yi Xuan

S&P500 vs EPF (KWSP)

"Should I ignore the stock market and just invest in EPF?"

"Should I ignore the stock market and just invest in EPF (KWSP)?"

EPF's latest 6.30% dividend is a nice treat for Malaysians.

From 2000-2024, EPF (conventional) delivered an annualized return of 5.63% compared to 8.32% of the US stock market (S&P500).

With a difference of 2.69% in annualized return, which is a better long-term investment?

S&P500 vs EPF (KWSP) performance (2000 - 2024)

Useful Articles:

#1 How a 'small' 2.69% annualized return makes a huge impact in the long run

Despite a 'small' 2.69% difference in annualized return, the S&P500 delivered significantly better return vs EPF for the past 25 years.

After accounting for forex (USD/MYR) gains/loss, RM100 invested in the S&P500 in 2000 would mean RM737.41 by 2024. For EPF, you'd be looking at RM392.86.

S&P500 vs EPF (KWSP) performance (2000 - 2024)

Putting this into table form:

S&P500 (US stock market) EPF (Conventional)
Annualized Return (2000 - 2024) 8.32% 5.63%
Total Return 637.41% 292.86%
RM100 invested in 2000 would mean... RM737.41 in 2024 RM392.86 in 2024

#2 "Risk is the price you pay for outsized return."

The S&P500's outperformance over the EPF did not come easy.

You'd have to endure multiple bumps along the way, such as:

  • The Dot-com Bubble in the early 2000s

  • Global Financial Crisis in 2008

  • Market crash in 2018

  • Bear market in 2022

S&P500 vs EPF (KWSP) performance (2000 - 2024)

Just look at 2000-2002.

A 3-year consecutive negative returns would be difficult to swallow for many investors.

So... how? Which option is better then?

#3 My thoughts:

In the long run...

  • Both are better than not investing at all.

  • It is not one or another. Combining EPF & stocks can give investors a diversified exposure to stable returns & higher growth.

Also important to consider: How many years you have before you need to access your money?

Generally,

  • Less time = Seek more stability over growth.

  • More time = Choice to seek more growth by giving up some stability.

There are no hard rules, nor right or wrong answers - you do what's best for your circumstances!

Disclaimers

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

by Chin Yi Xuan

How to invest during a market crash

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 clichĂŠ 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.

Chin yi Xuan - No Money Lah Investing strategies

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:

Stock market drawdown is normal
Source: A Wealth of Common Sense

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.

Source: officialdata.org

READ MORE: Intro & how to invest in the S&P500

Explore: My go-to broker to invest in the global stock market

#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.

Source: A Wealth of Common Sense

#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.

Guide to handling stock market crash or sell off.
Source: @yahoofinance

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.

S&P500 returns (1980 - 2023)
Source: Marcrotrends

Explore: My go-to broker to invest in the global stock market

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.

How to invest during a market crash

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

Financial planning Malaysia - No Money Lah by Yi Xuan (Stev from Wealth Vantage)

#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:

S&P500 top 20 companies in 1994 vs 2024
Source: finhacker.cz

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.

Explore: My go-to broker to invest in the global stock market

#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!

Explore: My go-to broker to invest in the global stock market

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.

by Chin Yi Xuan

Best Ireland-domiciled dividend ETF (FUSD, UDVD, FQGI) - alternatives to SCHD ETF

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

Click to explore: Interactive Brokers fees for Ireland-domiciled ETFs (UK)

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

Dividend growth investing - What you need to know (No Money Lah)

#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.

FUSD Ireland Domiciled ETF Holdings and Sector exposure
Source: Fidelity (as of June 2024)

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%

Click to explore: My go-to broker to invest in Ireland-domiciled ETFs (UK)

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%).

FGQI Ireland-domiciled ETF holdings
Source: Fidelity (as of June 2024)

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%

Click to explore: My go-to broker to invest in Ireland-domiciled ETFs (UK)

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:

UDVD ETF sector breakdown
UDVD sectorial breakdown as of June 2024. (Source: S&P Global)

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.

UDVD Ireland-domiciled dividend ETF top 10 holding
UDVD top 10 holdings as of June 2024. (Source: UDVD factsheet)

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.

Click to explore: My go-to broker to invest in Ireland-domiciled ETFs (UK)

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

Click to explore: My go-to broker to invest in Ireland-domiciled ETFs (UK)

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).

IBKR offers access to the London Stock Exchange (LSE)

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!

Click to explore: My go-to broker to invest in Ireland-domiciled ETFs (UK)

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.

by Chin Yi Xuan

M+ Global Review

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!

Open an M+ Global 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.

M+ Global offers a clean and easy-to-navigate app to invest in global stocks.

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.

Gain FREE 30-day access to real-time level 1 price feed for US & HK stocks when you sign up.

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

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!

Open an M+ Global account

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!

Open an M+ Global account

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):

Open an M+ Global account

Step 2: Register for an account and set up your password

How to open a M+ Global account

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.

How to open an M+ Global account

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.

by Chin Yi Xuan

Moomoo Malaysia features review

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.

Register for a Moomoo MY account today! (Enter promo code 'NML01' when depositing for 2x RM20 Cash Coupon!)

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:

Get FREE level 2 data when you register for your Moomoo Malaysia account.
Get FREE level 2 US market data when you register for your account.

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.

Moomoo Malaysia: Industry Chain allows you to see a big-picture view of different industries.

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.

Moomoo Malaysia: Industry Chain allows you to see a big-picture view of different industries.
Industry Chain allows you to gain a big-picture view of different industries.
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:

Moomoo Malaysia: With 'Concepts', track the overall performance and news of companies that fall under a specific theme, such as 'EV charger', 'Gene Editing', 5G, and more:
Track different themes with 'Concepts' via the Moomoo app

As an example, check out how I can view the overall & individual performances of the companies that fall under the ‘EV Charger’ concept:

Moomoo Malaysia: With 'Concepts', track the overall performance and news of companies that fall under a specific theme, such as 'EV charger', 'Gene Editing', 5G, and more:

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).

Moomoo Malaysia: I can also see the price levels where most Apple shareholders accumulated their shares via Market Position Overview.
Moomoo: Market Position Overview shows where other shareholders got into their positions.

In addition, you can also spot the price where most investors bought their shares based on how long the horizontal bar is:

Moomoo: I can also see the price levels where most Apple shareholders accumulated their shares via Market Position Overview.
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:

The stock screener in the Moomoo app is one of the most versatile I've ever used.
The stock screener in the moomoo app is one of the most versatile I've ever used.

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.

by Chin Yi Xuan

FSMOne USD Autosweep review Malaysia - Save and earn yield in USD

FSMOne USD Autosweep Review – Grow your savings in USD!

When it comes to how I save, there are 2 key requirements:

  • Only save on low-risk assets or funds that provide competitive returns to negate the impact of inflation.

  • Save in low-risk assets that do not lock up my money (ie. I can deposit & withdraw freely), so I can access my money whenever I need it.

For the above requirements, FSMOne USD Autosweep ticks all the boxes.

Even better, it allows me to save my money in USD, making it even more attractive!

In this post, let me share about FSMOne USD Autosweep, a low-risk way to grow your cash in USD!

Highlights of FSMOne USD Autosweep

Introduced in April 2024, FSMOne USD Autosweep is a USD cash management solution offering users attractive cash yield, alongside exposure to USD.

Some of its key features include:

  • Earn competitive yield: Invest your idle or excess cash in USD, and earn a competitive yield on them. As of 29/4/2024, the net yield for FSMOne USD Autosweep stands at 4.598%* per annum (*updated weekly, please check FSMOne's website for the latest yield figure).

    • Side note: It is important to know that FSMOne USD Autosweep does not pay out dividends. The returns from the yield will be reflected in the growth of your investment value.

  • Low risk: FSMOne USD Autosweep invests in low-risk financial instruments like short-term bonds and money market funds.

  • Flexible & low barrier of entry: Start using FSMOne USD Autosweep with a minimum top-up amount of USD10 or RM100. There is also no lock-in period which provides maximum flexibility to withdraw or invest your cash elsewhere.

Net yield as of 29/4/2024. Net yield is updated weekly - please refer to FSMOne's website for the latest yield figure.

Open your FSMOne account today!

How does FSMOne USD Autosweep work?

Firstly, it is important to understand how FSMOne USD Autosweep generates its yield.

To begin with, FSMOne USD Autosweep is a discretionary portfolio managed by the iFAST team (p.s. FSMOne is wholly owned by iFAST) which allows the team to invest in high-quality, low-risk investment products such as short-term bonds, deposits, and money market funds.

As of the time of writing (early May 2024), 90% of the underlying fund of FSMOne USD Autosweep is made up of iFAST USD Enhanced Liquidity Fund, which is a fund that invests in high-quality & low-risk debt instruments like bonds and notes.

Source: FSMOne Malaysia

Generally, the yield of debt instruments like bonds follows the US interest rate.
Since the US interest rate is at decade high, this makes it possible for FSMOne USD Autosweep to generate its competitive yield.

Key features of FSMOne USD Autosweep

#1 Low barrier of entry: Start using FSMOne USD Autosweep at just USD10 or RM100

FSMOne USD Autosweep has a low barrier of entry with a minimum top-up of USD10 or RM100. This means everyone can try and see if it is a good fit for their financial routine.

Furthermore, there's no minimum balance to maintain in your FSMOne USD Autosweep account, which ensures maximum flexibility for you as a user.

FSMOne USD Autosweep Review Malaysia - Yield is updated weekly.
FSMOne USD Autosweep offers a fine balance between low-risk, competitive returns, and flexibility.

#2 Same-day withdrawal (T+0) & no lock-in period

FSMOne USD Autosweep also offers same-day withdrawal. If you submit a withdrawal before 10am on a business day, your withdrawal will be credited back to your FSMOne USD Cash Account on the same day.

From my experience (see photo below), the withdrawal process from my USD Autosweep account (USD) back to my bank account (MYR) is done within the same business day. This is considered speedy compared to other cash management solutions available in the market.

There is also no lock-in period, which provides the flexibility for users to withdraw, or use the cash to invest whenever they see fit.

As for withdrawal, the minimum withdrawal amount is USD10.

FSMOne USD autosweep account provides really fast withdrawal (same business day withdrawal)

#3 Use your cash balance in your FSMOne USD Autosweep account to pay for your investment within FSMOne suites of products

Since FSMOne offers a range of financial products from stock, ETFs, unit trusts, bonds, and managed portfolios, you can use your cash balance in FSMOne USD Autosweep to pay for your investments in FSMOne seamlessly, regardless of currency.

This convenient feature makes it easy for you to deploy your cash balance in your USD Autosweep account to pay for investments in FSMOne whenever you see fit.

#4 Automatically reinvests your dividends, coupon payments, and bond proceeds

Furthermore, if you invest in stocks/ETFs or bonds via FSMOne and you opt into the FSMOne USD Autosweep account, your dividends, coupon payments, and proceeds from bond maturity will be automatically swept into your USD Autosweep account to earn potentially higher interest once they have accumulated more than USD10 in value.

Fees & Pricing

FSMOne USD Autosweep charges a management fee of 0.05% per quarter.

This management fee and any other fund-related expenses are already taken into account in the net yield for FSMOne USD Autosweep.

Meanwhile, there is no other platform fee involved.

What are the risks?

While FSMOne USD Autosweep invests in high-quality low-risk assets like bonds, notes, debt instruments, and money market funds, it is still not without its own set of risks.

For one, the funds in FSMOne USD Autosweep is not PIDM protected, unlike the deposits and Fixed Deposits (FD) in your bank.

In addition, the yield of FSMOne USD Autosweep will likely be influenced by the fluctuation in US interest rate. Simply put, should the US Federal Reserve (FED) decide to cut interest rates in the future, it will influence the yield of FSMOne USD Autosweep (or US bonds and money market funds as a whole, for that matter).

Is FSMOne USD Autosweep for you?

One key strength of placing your cash on FSMOne USD Autosweep is the liquidity - where you can deposit and withdraw quickly whenever you see fit.

As such, I think it is suited for:

  • People who want to keep their idle or excess cash in USD and earn potentially higher returns than typical Fixed Deposits (FDs) - all while enjoying the flexibility to deposit & withdraw anytime without penalty.

  • Investors who want to keep their idle cash from dividend payouts and coupon payments to earn a competitive yield while waiting for the next investment opportunity.

  • Investors that use the FSMOne platform to invest in USD-denominated products. Funds from FSMOne USD Autosweep can be used seamlessly to invest without any lag time.

Aside from FSMOne USD Autosweep, the FSMOne platform also offers a range of financial & investment products for fellow Malaysians - from stocks, unit trusts, managed portfolios, and bonds!

Open your FSMOne account with my exclusive referral link today, and enjoy the following perks:

Open your FSMOne account today!

No Money Lah Verdict: Low-risk & flexible way to grow your cash in USD and earn a competitive yield!

Given that MYR has been losing its value against the USD for the past decade, it is important to consider diversifying our excess cash to have USD exposure - and I think FSMOne USD Autosweep is a great choice for this purpose.

Give FSMOne USD Autosweep a try, and let me know what you think!

Open your FSMOne account today!

Step-by-step guide to start using FSMOne USD Autosweep

Step 1: Firstly, start by opening your FSMOne account HERE. Skip to Step 2 if you already have a FSMOne account.

Open your FSMOne account today!

  • Select 'Personal Account'

  • Key in your personal details and create your FSMOne account username & password.

  • Key in your tax information

  • Verify your identity by taking a photo of your IC

  • Enter your address and upload a supporting document (eg. utility bill, bank statement) as proof of your address:

  • Enter your employment details. You will also given an option to open a CDS account with FSMOne, which allows you to trade stocks. There will be a fee of RM10 to open a CDS account, which will be refunded upon successful account activation:

Step 2: Log in to your FSMOne account.

  • Under Cash Solutions, select USD Autosweep. Then, select 'Top up now'. Once you top up to your USD Autosweep account, your account will automatically opt-in for the autosweeping feature.

FSMOne USD Autosweep Review Malaysia

Step 3: To add funds to FSMOne USD Autosweep, you will first need to top up your FSMOne MYR or USD Cash Account.

Reminder: A minimum top-up of USD10 or RM100 is required for USD Autosweep

  • Top up your FSMOne MYR or USD Cash account first:

  • Once done, proceed to top-up your USD Autosweep account with your MYR or USD cash balance. If you are using your MYR cash account to top up, then currency conversion will take place automatically in this step.

  • Once done, the balance on your FSMOne USD Autosweep account will be updated instantly.

FAQ - FSMOne USD Autosweep

Q1: Is FSMOne regulated?

FSMOne is licensed by the Securities Commission of Malaysia. This ensures that FSMOne operates within the rules set by the authority.

Q2: Is FSMOne USD Autosweep PIDM protected?

No, funds in USD Auto-Sweep are not protected under the Perbadanan Insurans Deposit Malaysia (PIDM)

Q3: Is FSMOne USD Autosweep Syariah-compliant?

No.

Disclaimers

All materials and contents herein shall not be construed as an offer or solicitation for the subscription, purchase or sale of any fund, product or services. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons.

Investors are advised to read and understand the contents of the prospectus, product highlight sheet (PHS) and relevant disclosure documents before investing. The prospectuses, PHS and relevant disclosure documents can be obtained from FSMOne Malaysia website. Investors should compare and consider the fees, charges and costs involved before investing. Investors are advised to understand the risks involved in relation to the products or services and further conduct his/ her own risk assessment and seek professional advice, where necessary. The unit trust fund’s prospectuses have been registered and lodged with the Securities Commission (SC), however this does not amount to nor indicate that SC has recommended or endorsed the product. Past performance is not indicative of future performance. Opinions expressed herein are subject to change without notice. Some funds, products or services may not be suitable or available to all investors, and are only made available to Sophisticated Investors (as defined in Capital Market and Services Act). The contents herein have not been reviewed by SC. Please read our full disclaimer in the website.

by Chin Yi Xuan

What is Dividend Reinvestment Plan (DRIP/DRP))

Introduction: Dividend Reinvestment Plan (DRP/DRIP) & Example Calculation

Dividend Reinvestment Plan (DRP/DRIP) is a programme that allows investors to reinvest their cash dividends in the form of shares.

For investors, DRP is a convenient way to automate the compounding process of their investments, without having to manually reinvest their dividends every time they are paid out.

In this post, we’ll dive deep into DRP, its benefits and downsides, how to use DRP efficiently – and more!

RELATED POSTS:

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What is DRP + Why DRP?

DRP is a programme that certain companies will open for their investors when a dividend is announced.

Instead of paying investors in cash dividends, a DRP reinvests investors’ dividends by purchasing additional shares of the company.

Through DRP, investors are able to compound their dividend returns over time by turning them into additional shares. In return, these shares will then pay out more dividends to them.

What is Dividend Reinvestment Plan (DRP/DRIP)

If an investor merely receives dividends without reinvesting them, there’ll be a huge difference in return in the long run. Consider a simple comparison below:

  • Context: $10,000 investment with a 5% annual dividend over a period of 30 years.
  • Simple return: Dividends are not reinvested. Turns into $25,000 in 30 years.
  • Compounded return: Dividends are reinvested. Turns into $44,677 in 30 years. 
Simple vs Compounding return
Simple vs Compounding return

Another huge benefit of DRP is that it automates the dividend reinvesting process. As a result, it lifts the manual effort away from investors and leaves the compounding process uninterrupted.

How to calculate DRP

As an example, if you own 1,000 shares of Company X and it announces a DRP for its upcoming dividend payout.

For this example, the DRP details are as follows:

  • Distribution Per Unit (DPU): $0.20
  • DRP units issue price*: $11.00

[*Issue price: It is common to see companies offer DRP units at a discounted price from the market price to entice investors to join the programme.]

Without DRP, you would receive $200 in cash dividends (1,000 shares x $0.20). What happens if you enroll in DRP?

  • Step 1: If you choose to enroll in DRP, you will receive 18 additional shares at $11.00 share price (18 x $11 = $198). This increases your total holdings to 1,018 (1,000 + 18) shares in Company X.
  • Step 2: Now, recall that your initial cash dividend is $200 and only $198 was used for the additional shares. What will happen to the remaining $2?
  • Step 3: Since the remaining $2 is unable to purchase a whole unit of share ($11), it will (usually) be paid to investors in the form of cash dividends. That said, certain brokers may allow for fractional shares in DRP (ie. Shares smaller than 1 unit), which will convert your $2 dividend into 0.18 units of shares.

DRP Calculation Examples

#1 CapitaLand China Trust (SGX: AU8U) Dividend Reinvestment Plan

AU8U is a Singapore-listed REIT that offers investors exposure to retail properties in China (eg. malls). Here's how we can make our DRP calculation from the announcement below:

(1) Distribution per unit (DPU) SGD 0.0315
(2) DRP issue price SGD 1.157
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Assuming we own 500 units of AU8U shares, how many DRP units can we get?
  • Step 1: Calculate the dividends that we are going to receive without DRP. In this case, we'll be receiving SGD 15.75 in dividend payment.
500 units x SGD 0.0315 = SGD 15.75
  • Step 2: Find out how many DRP units we are eligible for. Divide the dividend payment by DRP issue price and we are eligible for 13.6 units of shares.
SGD 15.75/ SGD 1.157 = 13.6 units
  • Step 3: Since AU8U does not have shares in units less than 1, we are eligible for a maximum of 13 units of shares from this DRP (instead of 13.6 units). 
  • Step 4: If we opt for the maximum of 13 units for this DRP, any dividends that are not reinvested will be paid to us in the form of cash dividends. In this case, we will be getting SGD0.019 in cash dividends.
0.6 units x SGD 0.0315 = SGD 0.019
Singapore REIT DRP calculation
Source: SGX

#2 Maybank (KLSE: 1155) Dividend Reinvestment Plan

Maybank is the largest Malaysia-listed bank. Here's how we can make our DRP calculation from the announcement below:

Distribution per unit (DPU) RM0.30
(1) DPU that is eligible for DRP RM0.075
(2) DRP issue price RM8.28
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Assuming we own 500 units of Maybank shares, how many DRP units can we get?
  • Step 1: Using the portion of DPU that is eligible for DRP (RM0.075/unit), calculate the dividends that we are going to receive from that portion. In this case, we'll be receiving RM37.50 in dividend payment.
500 units x RM0.075 = RM37.50
  • Step 2: Find out how many DRP units we are eligible for. Divide the dividend payment by the DRP issue price and we are eligible for 4.53 units of shares.
RM37.50/RM8.28 = 4.53 units
  • Step 3: Since Maybank does not have shares in units less than 1, we are eligible for a maximum of 4 units of shares from this DRP (instead of 4.53 units). 
Maybank DRP calculation
Source: Maybank

When should you consider DRP + How to opt for DRP

You should consider opting for DRP when you are invested in a solid company and the company offers a DRP on its dividends.

Through DRP, you get to acquire additional shares in the company (most of the time, at a discounted rate), and this compounds your returns automatically.

Normally, you will be notified by your broker whenever you are eligible for a DRP after a dividend is announced. If you are eligible for a DRP, just proceed to log in to your brokerage account and agree to the DRP accordingly.

When to opt for DRP?

Benefits of DRP

  1. DRP allows you to automatically reinvest your dividends in the form of additional shares without interrupting the compounding process.
  2. Usually, companies will offer DRP units at a discounted price compared to the share price. This allows investors to acquire shares at a lower price than the market price.
  3. Moreover, when companies offer a DRP, investors usually do not have to pay additional brokerage fees/commissions to acquire the DRP units. As such, the cost of owning these additional units becomes lower.

Downsides of DRP

While there are many benefits to DRP, it is not all perfect and may not suit certain investors. Here are a few downsides to DRP:

#1 Fractional shares can be hard to sell

Investors that opt for DRP may, at times, end up with additional fractional shares. Fractional shares are units of shares that are not commonly transacted. (eg. 7 shares where the shares are transacted in 100-unit lots).

For certain stocks (especially ones with low volume), fractional shares may be harder to sell.

#2 No control over price & timing of DRP purchase

Since the terms of a DRP are decided by companies, investors do not have a say on the price and the timing of when a DRP purchase will happen.

No Money Lah Verdict

So there you have it! I hope this guide has been helpful in making DRP easy to understand!

For most investors, DRP is an amazing tool to automate the compounding process of their investments.

If you have any questions on DRP, feel free to leave your questions in the comment section under this post!

FAQ on DRP:

Q1: How can I enroll in a DRP?

When a company that you invest in announces a DRP, you will normally be notified by your broker. To enroll in the DRP, just log in to your brokerage account and there should be a corporate action section for you to enroll in it.

Q2: Is enrolling in DRP compulsory?

No, it is not compulsory for investors to enroll in a DRP. If you do not wish to reinvest your dividends into the company via DRP, you can choose to receive your dividends in cash.

Q3: Is DRP subjected to Dividend Withholding Tax (WHT)?

Yes, DRP is subjected to Dividend Withholding Tax, just like ordinary cash dividends. 

LEARN MORE: What is dividend withholding tax (WHT) and how to deal with it?

Q4: Are there any fees to enroll for DRP?

If a company offers DRP, there is usually no extra cost for investors to enroll for the DRP. This means there'll be no commissions and exchange fees involved. 

Disclaimers

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

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

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

by Chin Yi Xuan

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