3-4% yield - Easily achievable or No way!

These are the current dividend yields of various ETFs that I hold based on the data on the ETF's website as of Jan 2019:

Vanguard FTSE100 4.65%

STI ETF 3.47%

Vanguard Pacific  3.69%

Vanguard Asia ex Jpn High Yield 3.76%

ASX200 ETF 4.31%

HKSE Tracker fund 3.48%

Proxy for Euro Stoxx 50 which does not declare dividends: Vanguard Europe ex UK 3.21%

Someone in HWZ mentioned that a $1m portfolio yielding 3-4%  for retirement would be a good option for annuities but there are still keyboard warriors/worriers claiming that such a yield is not guaranteed. 

My view is that 3-4% yield is a conservative target and easily achievable using an asset allocation strategy for any 'normal' risk profile. Chasing higher yields like 5%+ might lead to a mismatch between risk profile and portfolio risk. 

Portfolio Top Holdings Review: Start of 2019

My top holdings are in the Portfolio page in this blog. I did a brief review to see if there were any movements in 2018.

Singtel: Small to Medium (Z74.SI)

I have been using SRS and some cash in SCB to accumulate more of Singtel. With my last purchase for SRS at $2.96, it has moved from the 'small' to 'medium' category. I will probably use my SRS funds to continue accumulating Singtel.

Euro Stoxx 50 ETF: Small to Medium (XESC:LN, or CS51:LN)

I have been making small purchases throughout 2018 and it has now crossed into the medium category. I pick this ETF as it is listed in GBP but reinvests the dividend so I do not have to deal with the hassle of Euros. All LSE listed Euro ETFs declare dividends in Euros even if they are listed in GBP (something like the buy China ETF using HKD but get RMB problem. The index dividend yield (which is reinvested) is 3%+ plus which is very nice for a mega-cap ETF. 

I will continue to accumulate this on a quarterly basis

HKSE has a Vanguard European ETF which declares dividends in HKD, but it has a higher expense ratio and I am not sure if the tax position would be as favourable as an ETF domiciled in Ireland.

Lyxor China Enterpises: Unwinding Position

Lyxor announced mergers/delistings of its ETFs. Its a matter of time before they exit fully I guess. With China market staging a brief recovery, its time to unwind the position. I think I already have enough China exposure without this ETF, so I am still thinking what to do with the funds. Maybe HK Tracker fund 2800.HK and Vanguard World VWRD?

Standard Chartered US$ Forex Spread

One very frequently sees posts in HWZ saying that SCB forex spread is bad. For those planning to buy IWDA and hold 20+ years to retirement, I can only say 'so what'?

User Chopra on HWZ found a 2016 post on SCB where it was pointed out that the spread  for US$ was 2.2% two ways (i.e. buy-sell) or 1.1% one-way. A 1.1%/ 2.2% one-off forex premium shouldn't discourage anyone from investing for 20 years, but many keyboard warriors seem 'paralyzed'. They say SCB has bad forex, then they worry whether IB is 'safe' and about 'tax' and the US$10 activity fee.

More users have done the calculation and the 2018-2019 SCB forex spread over IB is now only 0.65% one way (or 1.3% both ways). Yet I guarantee you that keyboard warriors will continue to complain about SCB's 'bad' forex rate.

2020 Edit: The forex spread for IB is now 0.4%


SCB USD High Account holders can also deposit physical US$ cash without charges, but I already calculated that saves your $4 for every $1,000 deposited. Frankly, if I can just change my S$ to US$ electronically, why would I bother with the hassle of finding the moneychanger with the best rate and queuing up at bank to deposit cash?


2016 Post for reference: http://buyaftercrash.blogspot.com/2016/06/interactive-brokers-or-standard.html?m=1

Strategy Report: Jan 2019

I started off the year by buying 3085.HK under HK$20, CapitaLand at $3.06 and Sembcorp at $2.50, hoping to average down, but prices went up instead.

In mid-Jan, continued to add IOZ ASX200 ETF as I haven't bought for some time and needed to rebalance to bring up my Australia holdings, add Euro Stoxx 50 ETF CS51 and some more Aviva. Also did some small share top-ups of local shares here and there.

In the fixed income space, SG Savings Bond is no longer attractive so I am still looking around. Singlife has a 5-year 2.5% plan and 3-year 2.25% plan which might be an ok place to leave some cash.

2018

Interactive Brokers Time Weighted Rate of Return for Year 2018: -12.55%