Hey everyone,

So it’s been a busy week in markets with both the S&P 500 and Nasdaq indexes actually closing at record highs on Friday, driven by Big Tech earnings.

In Singapore, DBS was the first of the “Big Three” banks to report and it was another solid quarter from Singapore’s biggest bank. Lower net interest income (NII) was more than made up for by some big growth in fees from wealth management.

Meanwhile, I ran an AMA on Instagram a few weeks back and got way more questions than I could get through on the day. So I picked four that kept coming up (time and again) and answered them properly below.

Where to park idle cash in Singapore. Whether the POSB app is a good place to invest. The one global ETF I'd pick for long-term compounding. And how to think about investing your SRS for the first time.

Straight answers to each below.

Got a question of your own? Submit it here and I might answer it in a future edition.

Let's get into it.

There are limited options here, unfortunately. And none of them (at least for Singapore Dollar deposits) are all that attractive.

The most obvious is Singapore Savings Bonds (SSBs). Liquid, safe, but extremely poor-yielding at around 1.40% p.a. for the first year in the latest tranche.

Money market funds like the Fullerton SGD Cash Fund yield slightly better at 1.4% to 1.5% p.a. before fees, and offer even better liquidity than SSBs.

If you’re willing to jump through some hoops and spend on certain cards, credit your salarty, or potentially buy insurance or investments, then the UOB One, OCBC 360 or the DBS Multiplier accounts all work fine as well.

For my own idle cash, I actually use Chocolate Finance. A slightly higher yield is available, with 2% p.a. on your first $20k and 1.8% p.a. on your next $80k via its Top Up Programme. Beyond that, they aim to deliver 1.8% p.a. on any funds above $100k.

But you do have to be aware that you’re invested in underlying funds holding investment-grade, short-duration bonds. That makes it riskier than SSBs or the Fullerton SGD Cash Fund but still extremely low risk.

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Easy one. The Vanguard FTSE All-World UCITS ETF, with the ticker VWRA, that’s listed on the London Stock Exchange (LSE).

Broad exposure to both Developed Markets and Emerging Markets. Low cost and an all-in-one. I use it myself and it's what I'd suggest for a kids' portfolio with a 20+ year horizon as well.

I get questions on the SPDR MSCI ACWI UCITS ETF, with the ticker ACWD, and that also works fine.

It is slightly cheaper (at 0.12% p.a.) and has less stocks versus VWRA (~2,500 vs. ~3,700) but it does the job just as effectively - ACWI stands for All Countries World Index so you are getting developed + emerging in one as well.

Honestly, it’s like splitting hairs between choosing the two but I go with VWRA simply because of its track record, slightly broader exposure and much larger AUM.

If you're new to SRS investing or just want a low-maintenance approach, stick to low-cost index funds or ETFs.

Something like the Amundi Index MSCI World Fund via POEMS (which has no platform fee for it) works well. The fund itself costs just 0.10% p.a., with no platform fee. You can also buy it via Endowus but you'll pay an additional 0.30% p.a. platform fee on top.

One little-known avenue (if you want truly global exposure so DMs + EMs) is the iShares MSCI ACWI UCITS ETF (ticker is ISAC) via StashAway’s ETF Explorer.

StashAway doesn’t charge a platform/management fee for it and you can set the SRS investment on a monthly recurring investment but you will be charged a small spread on the SGD-USD conversion that’s necessary before buying.

Remember, though, that SRS is really the "gravy" on top of your CPF and cash investments. Some people use it for individual Singapore stocks too, but I'd keep that limited to large, dividend-paying blue chips, so the usual suspects like the big banks, telcos, or REITs.

If these questions are landing and you want the proper walkthrough, I run a free Investing Masterclass that covers the full ETF framework I use — which ETFs to buy, which brokers to use, and how to build a portfolio that actually makes sense for Singapore investors.

👉 Register for the free masterclass here

Honest answer: my position on thematic ETFs that take advantage of fast-paced changes in the world hasn't changed.

Things happen all the time and sentiment shifts quickly. We've seen energy stocks get a boost, but for that exact reason, everyone's buying into it and the trade can become "crowded" after a while. This pattern repeats any time something big happens in markets, which is a lot more often than we think.

Having a small tilt to energy in a satellite position is fine if you want it has a “hedge” of sorts on higher oil prices and inflation. And the Xtrackers UCITS ETF is a solid product, and energy isn't a huge component of global indices anyway, so you're not doubling up on much.

A cheaper Energy-specific UCITS ETF, though, would be the iShares MSCI World Energy UCIS ETF (with the ticker “WENS”) as it costs 0.18% p.a. versus 0.25% p.a. for the Xtrackers ETF.

But, overall, I actually have the opposite thinking when it comes to traditional fossil fuels.

This whole saga in Iran is going to accelerate the adoption of renewables and nuclear over the medium and long term. It comes down to energy security for countries. Renewable forms of energy can't be controlled — no country controls the sun, the wind, or the flow of rivers for hydropower.

We saw the same thing happen after Russia invaded Ukraine. Policymakers woke up to the fact that they don't want to be dependent on any one country for oil and gas. This episode only reinforces that.

So if you're looking for a satellite tilt, traditional Energy is fine in the short term and medium term but I’d also take note of where the energy mix is headed in the long term.

Short answer? No.

I'd actively avoid using banks to invest as they are merely product distributors. They receive "trailer fees" for pushing high-fee products that reliably underperform a basic market ETF over the long term.

Now, this is obviously in regards to investment-linked policies (ILPs) and the raw deal that we all know they give investors. But even for the banks’ own investment offerings, the value proposition is extremely poor.

Take the “digiPortfolio” offering by both POSB and DBS. It charges an outrageous 0.75% per annum fee on your assets under management (AUM). If you add in the cost of underlying ETFs/funds, you could be paying well over 1% p.a. in fees alone.

For context, a low-cost, diversified global ETF charges you anywhere from 0.12% to 0.19% p.a. in fees. It’s really a no-brainer as once you start to grow your wealth, those percentages matter enormously to how much you’re paying in fees.

I always like to remind people, whenever possible, that these fees are charged every year. This isn’t a one-time fee you pay.

Unfortunately, the Singapore investment landscape is riddled with conflicts of interest (like trailer fees) and high fees in general. Mainly, it’s to do with the legacy system here and trust in financial institutions but the fact there's no fiduciary duty (in the legal sense) on the part of bank advisors also doesn’t help.

At the end of the day, advisors work for the bank. But even digital platforms like digiPortfolio effectuvely exist to extract fees. They are not working in your best interest. Why? Because doing that doesn’t make them money.

It’s as simple as that. My golden rule remains this: when investing, simplicity wins.

If any of these raised more questions than they answered, send them my way. I read every email.

- Tim

1. Investing Made Simple: A self-paced course that walks you through building a proper investment portfolio from scratch. ETFs, allocation, brokers, and the mindset to stay consistent. Everything you need to start and keep going. Join here.

2. Miles Made Simple: A strategy guide for earning and redeeming KrisFlyer miles the right way. If you're flying out of Singapore and not optimising your credit card spend, you're leaving a lot on the table. Get the guide here.

3. Got a question? Submit it here and I might answer it in a future edition.