Monday, April 21, 2014

[XMM STI ETF Investing] Moving out STBF

Hi all!

With the advent of the OCBC 360 account, things have changed.

I would like to withdraw all my sister's money from the STBF or sitting in idle cash (SCB) and help her to get at least 2.05% or 3.05% just being cash in my own account.

However, since I already purchased the UOB bond fund, I will just stick to it. There should not be much difference and slightly more upside. The main reason is due to the sunk cost of the 0.75% sales charge. The OCBC interest rate promotion is not a guarantee to be offered for a long time, so I don't think it's wise to cash out of the UOB investment.

However, I have sold out of the Nikko AM STBF now.

Purchased @ $1.3737 for 727.97 units = ~$1000.01
Sold @ $1.3758 for 727.97 units = $1001.54

Gain on investment is 0.153%. Investment was held for 2 weeks, so annualized gain would have been about 4% based on those past 2 weeks, which I think is rather high and unrealistic for the fund. Anyway, so the good news is that I made a small tiny profit on this transaction.

I will be moving her $1,001.54 to my OCBC account to enjoy the high interest rates there.

I will also move her $1,000 cash from my SCB to my OCBC account as well. With the new FAST transaction protocol that the banks have taken up, there is no lead time, and hence almost no opportunity cost. Therefore, it is optimal to leave your cash in the highest yielding bank account.

Portfolio recap

Cost and Location:
$8,000 is UOB fund
$2,001.54 in OCBC 360

Current portfolio value:
UOB Fund = $7,958.92 (sales charge was $60, but have gained $18.92 since then, or 0.24%)
OCBC = $2,001.54
Total = $9,960.46 (down 0.4% on the whole because of the sales charge of the UOB fund)

Expected year end returns should be about 1.5% upwards as a conservative estimate now. That would mean ending 2014 with about $150 worth of returns. We shall see!

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