Money Market Funds instead of T-bills for cash management?

 I have previously posted about my cash /cash-equivalent strategy which involves among other products, a monthly T-bill ladder. Given the differing maturity dates and application dates, and reduced T-bill rates, I wondered whether maintaining a cash T-bill ladder is worth the hassle.

After looking into Money Market Funds, I decided to add MMFs to my cash management strategy and to discontinue my monthly T-bill ladder and add the maturity proceeds of existing T-bills to an MMF.

This does not mean I will have zero T-bills. I still plan to have a single $50,000 cash T-bill which I will roll over every 6 months. If my MMF funds get too large, I may transfer out some to buy a 1-year $50k T-bill. That should be manageable and simplify my life. At the same time, I'm not too overexposed to MMFs.

Which MMF?

My starting point is always the cheapest/lowest expense ratio. In this case, the Fullerton SGD cash fund with an expense ratio of 0.17% is my no.1 choice. I've started purchasing this using the FSMOne platform (since there are no unit trust platform fees for Diamond+ tier members) and plan to cap my exposure at $100k. 

Unfortunately, my research has not shown me a good no.2 choice as the other MMFs have significantly higher expense ratios.  Lionglobal has a TER of 0.31% and UOB has a shocking TER of 0.42%. Recall that the Lionglobal All Seasons Balanced Fund has a TER of 0.48%. The standard version of All Seasons has 70% fixed income and 30% equities and I would rather buy that than a UOB MMF with 0.42% TER. On the other hand as a UOB shareholder, I would like to thank all customers who purchase UOB funds.

After I reach $100k in Fullerton SGD fund and have bought my $50k x 2 T-bills, I will then have to do more research what is the next vehicle for holding my excess cash.  I might even consider a balanced fund like Lion Global All Seasons (standard). With 70% fixed income and 30% equities, I can do some mental accounting and treat each $1k investment as a $300 DCA into equities and $700 DCA into fixed income, given the low expense ratio.

What Lesson to be Learnt from Chocolate Finance?

I see lots of news articles and commentaries about 'lessons' to be learnt from Chocolate Finance. For full disclosure, I never put any money in Chocolate Finance. I read that CF was started by the ex-CEO of Singlife and I knew it was 'pattern like badminton.' If you recall, Singlife offered a 'savings account' with an attractive interest rate, but cut the rates after a short while. I promptly pulled out all my cash. The Singlife customer base made it attractive enough for Singlife to be acquired.

If you read CF's website, you will know that the high interest rates were just a loss leader to increase customers number and were totally unsustainable. CF's website states that they take your money and buy a variety of MMFs. To be sustainable they can only pay you the returns from the MMF (minus any costs they may incur). If they are paying you more, they are using investors' money to do so.

So the lesson I learnt from CF is that since CF is just buying MMFs, I should just cut out the middleman and buy MMFs directly. 

 

Withholding Tax: Another influenza gets it wrong.

There is an S&P500 ETF listed on the Singapore stock exchange with the code S27. However, it is well known on the forums that this is not the best choice if you want to invest in S&P500.

An influenzna recently posted (in support of the idea that S27 is 'good') that S27 has "no additional tax' as it is 'deducted at fund level'

The error is that the WHT is not deducted at the fund level. The word 'additional' is also misleading. The 30% WHT is a one-time deduction, whether deducted at the fund level, like Amundi Prime USA (a Luxembourg domiciled unit trust) or by the custodian, like when you buy S27 or even VOO. The word 'additional' seems to imply that the competitors to S27 have an 'additional' layer of tax, which they don't.

This is the copy of an actual investor's CDP statement that was posted in HWZ and its highly illustrative. This is a 2015 statement. I doubt the WHT tax treatment as changed since then:

(1) There is 30% withholding tax deducted from the gross amount

(2) SGX charges a S$3.73+0$.26=$3.90 handling fee on the dividend. Even if you don't use CDP as a custodian, you may still be liable for this handling fee. This is shown in the FSMOne fees page which says they will 'pass through' the dividend handling fee to you.

There is therefore a very good reason why the usual recommendation for Singaporeans who want US exposure to buy Ireland Domiciled, London Listed, UCITS ETFs, in order to take advantage of the tax treaty that reduces WHT to 15%.

Alternatively, you can look at Synthetic ETFs that replicate the S&P500 like Invesco's SPXS or Amundi's LSPU (both listed on LSE). These have 0% WHT. I am vested in LSPU.

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How about S&P500 Unit Trusts?

Amundi Prime USA is a UCITS fund that invests in S&P500 via physical replication. It is domiciled in Luxembourg and therefore subject to 30% WHT. Unlike some influenzas who might simply be cutting and pasting from other erroneous sources, I actually checked the financial statements to confirm the level of WHT.

Does it mean that a UCITS S&P500 fund that is domiciled in Ireland will have a better WHT? For example, FSMOne offers to FSM+ members the UCITS unit trust Vanguard US 500 Stock Index Acc USD IE0002639775

 

Initially, I thought that this would be subject to 15% WHT just like their ETFs. But the wise people in HWZ told me this was incorrect. I checked the financial statements of the fund and HWZ was correct once again, the WHT for IE domiciled UCITS US funds is still 30%. Only ETFs get the 15% WHT.

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The influenza didn't mention that Amundi is sold in S$, making life a lot simpler for some investors.

One more advantage of Amundi Prime USA / Amundi Index MSCI World is that it is denominated in S$. This makes it extremely convenient for my less savvy elderly relatives to invest in. In fact, I have been recommending the Amundi funds to be less financially savvy relatives and friends as a long term investment.  While the WHT is 30%, at current yields, this adds about 0.3% to costs which in the grand scheme of things, might be acceptable to some (better than stock picking individual SG REITs).

S27 is denominated in US$ which might be a hassle for some.

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US Estate Duty

S27 is US domiciled so it is subject to US Estate duty if you pass away. If you plan to hold it as a long term investment till your old age you need to take this into account. Their factsheet gives the ISIN which is US.

Ireland domiciled UCITS ETF are also subject to Ireland Estate duty which is currently zero. 

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At the end of the day, it takes less than 10minutes to first open up the relevant financial statements to confirm the facts about withholding tax before publishing on the internet. 

Market Rally is a good time to tidy up my portfolio by selling

 

There appears to be a rotation into value and a sustained rally for quite a few of my counters that had previously not moved much. As a result, I am still outperforming the S&P500. This provided me an opportunity to tidy up my portfolio by selling into strength.

In particular, I have been holding some ADRs of UK-listed stock since 2016. I have since decided to hold the 'main' stock listed in LSE instead of ADR to avoid paying ADR fees but never got around to selling the ADRs. Thanks to the rally, I have been selling my Vodafone, Prudential, and Aviva ADRs. I hope to rebuy the London-listed versions for cheaper if there is a correction as these are great dividend stocks. In the meantime, I reinvested the cash into S&P500 ETF LSPU.

On the US stock trading front, I exited INTC at $26.10, and bought more NVO, UA, and NKE. 

Blood Pressure Monitor (spend money on health)

 

This is part of my spending money on health. I have a 10+yr old Omron Blood Pressure Monitor and the LCD screening is fading and harder to read. It often gave me blood pressure readings in excess of 120/80, even after I had lost weight and improved my other fitness measurements.

Therefore, it was time to buy a new BPM and at the 3-3 sale I got a new Omron Complete at a good price. It monitors blood pressure and has a single lead EKG. I'm pleased to note that with the new BPM, my blood pressure consistently registers below 120/80 which is normal. The exact figure also provides me with a baseline reference. 

As for the question whether the new Omron is more accurate just because it is newer, I did my annual health screening and BP was also under 120/80, so it should be.

Speaking of health screenings, I'm pleased that my HDL and Triglycerides are in the optimal range, while my LDL is in the ok range. I attribute my better HDL to increased consumption of sashimi, fish, and nuts. On the other hand, I admit to eating a bit more unhealthily during weekends, in the hope that my healthy eating on weekdays balances it out. Lets see what I can do about my LDL.

Dividends Collected: Feb 2025

 

STI ETF paid dividends this month. Total dividends year to date just a tiny bit more than 2024.

February Update: Trying to beat S&P500

 

I had previously mentioned that I have been buying US stocks like NKE etc to learn trading.

So far I exited PLTR, ZM, NKE and LLY at small profits. PLTR and LLY continued to climb after I sold, but that's just trading for you. I immediately redeployed the funds to add to my NKE, MCD, NVO and UA positions.  (I sold NKE at $83 and re-entered below $80).

NVO has been a superstar and because I believe in the narrative that outweight Americans will simply refuse to change their lifestyle and continue to eat unhealthy food (MCD) and whenever a Doctor says they are overweight, they will just take Ozempic, but they will continue eating MCD and gain back the weight. 

NKE's new CEO is back on focusing on sports performance and the Zoom Fly 6 is a great mass market carbon plated shoe. I know because I bought a pair.

Anyway, since I am planning to allocate most of my fresh funds to VWRD, I have decided that I will make 10% of my portfolio net worth available for US stock trading (i.e. shorter holding periods). Hope to learn something about investing in the process and at the same time, maybe I can finally beat the S&P500. So far so good, but I will never underestimate the S&P500.

Lion Global All Seasons Fund revisited (SRS strategy)

 

I have $15,300 to deposit into SRS every year, so if I were to do a monthly RSP that is roughly $1,200 a month

While I have talked about Amundi Index MSCI World being a good choice, its performance is heavily dependent on the US stock market. MSCI World does not include emerging markets (unlike MSCI All World or FTSE All World).

So I have taken a look at Lion Global All Seasons Growth again. The AUM has slowly been inching upwards and its expense ratio as of June 2024 was 0.39% meaning that they someone managed to lower the ER further.

Given current S&P500 levels, my plan is to do a 50/50 split of Amundi Index MSCI World and Lion Global All Seasons into SRS. 

The Failure of Dividend Investing?

 

Recently in the forum, there was a query whether Dividend Investing has 'failed', with reference made to the portfolio of certain dividend investor. 

In order to determine whether something has failed, you need to set a standard. If the standard is the recent performance of MSCI World, its pretty obvious that someone who only buys Singapore dividend stocks will have 'failed'. However this begs the question why MSCI World is the benchmark for an SG investor who may have other priorities, such as saving up S$ to buy a new home and pay for renovations.

At the same time, it is important to take a hard look at our portfolios and admit when we need to make improvements. Those that simply held onto their highly concentrated SG-REIT portfolios instead of diversifying ended up losing more money than they should have. 

At the start of 2022, I admitted to myself that I had underperformed S&P500 and my 2022 New Year's resolution was to start buying more S&P500 and World ETFs:

    January 2022 strategy

I am glad I took a hard look at my portfolio and started buying World/US ETFs. As a result, the concentration of REITs in my portfolio dropped drastically.

Measuring Failure for Dividend Investors?

Personally, I feel that success or failure of dividend investing is linked to whether one is able to invest in stocks (including ETFs) that are able to grow their earnings and therefore pay more dividends.  Capital gain is not so critical to me since my preferred holding period is forever.

I took a look at the 9 largest SGX-listed stocks that I hold (all of which are 'dividend stocks') to analyse whether they have been able to grow their dividends. Overall, the dividend growth looks healthy. The 3 REITs in the top 9 list showed small dips in their 2024 dividends but nothing catastrophic (compared to their share price declines).

So my quick conclusion is that dividend investing has not "failed" though it has underperformed S&P500. 

Dividends Collected: Jan 25

 

The year always starts quietly on the dividend front.

Can I beat the S&P500 this year?

 

Having underperformed the S&P500 in the last few years, can I outperform this year? Basically its all down to how the tech sector performs. If tech sector underperforms, I will probably beat the S&P500.

In absolute terms, 4.13% gain in 1 month is a pretty good start. It makes me hopeful for a double-digit gain again this year.

Happy CNY

 

SCB was the only bank that sent me red packets this year. I don't buy any products from bank RMs so I fully understand why I shouldn't expect to get anything from any bank. So it is nice that SCB still sends me red packets. Maybe its because of all that forex premium I have been paying whenever I buy US$ to DCA my ETFs

 

Hope everyone has a great CNY. There was some volatility in the stock market with the biggest one-day rout of Nvidia shares in US history so I bought some VUSD and more US stocks last night.

 

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As health=wealth and I always eat too much during reunion dinner. I did a workout in the afternoon to burn some calories and it felt easier than normal, probably because I was well rested. The nett result is that Garmin thinks that my VO2Max has improved and that I am now in the top 5%. It will probably drop shortly after this since my workouts usually aren't as good after a day at work.

 

Comfort Delgro

Just a quick snapshot of Comfort Delgro's Dividend History. CDG is one of my large holdings which was adversely affected by COVID. Fortunately it has bounced back strongly (unlike REITS). However, the bounce may well be 'too fast too soon' because the pace of earnings and dividend recovery and 'slow and steady'. Do not expect earnings fireworks from a company that gets revenue but bus, taxi, and train. Comfort is not a growth stock.

As I said back in my blogpost 2 Dec 2023: With higher interest rates, companies that are 'nett cash' like CDG are looking more attractive than companies with massive debt servicing costs. 

 

My 2nd Credit Card

 

In terms of managing finances, one of my first actions in 2025 was to apply for a UOB Krisflyer Credit Card. I currently only have one main UOB credit card for spending but there is a spending cap which I bust every time I buy air tickets.

I needed a 2nd card that ideally would maximise points/miles from big ticket spending. For example, in the last SQ sale, I bought 1 biz and 1 economy tix so the ideal card would give me max value from that.

After browsing various bank websites and reading the reviews in milelion.com, I settled on this card as it has uncapped 3.0 mpd on SQ,Scoot tickets, and other categories like online shopping (which appears to include Amazon.sg) and Kris+. I haven't signed up for Kris+ but I'll look into it to see if it suits my spending patterns.

I'm sure there better ways to optimise the use of this card, but for now, I plan to use it for air tickets and big ticket online shopping that qualifies for the 3.0pmd.

Free Money from Amazon?

 

First time I am seeing Amazon offering re-usable promotion codes when you purchase Amazon gift cards. I am planning to buy a new laptop in a few months so I have bought several gift cards for myself and accumulating the $10 credits.

FSMOne RSP Fx premium

For FSMOne RSP of foreign ETFs, you can direct FSMOne to deduct S$ and let FSMOne change the money for you. This is convenient as it saves you the hassle of changing the FX. In addition, there is no high-interest HK$ account so if you just left the HK$ in the FSMOne account while waiting for RSP deduction, you might lose out in terms of interest.

Because of this convenience, I never bothered to look at whether the FSMOne FX rates for RSP purchases are different from manual Fx rates (i.e. you change the S$ to HK$ or whatever yourself). The manual Fx rates of FSMOne are pretty good, about 0.3%.

However, someone posted in the forum that for FSMOne RSP, the exchange rate premium is 0.7%, which is as bad as SCB's Fx premium. I checked this out by looking at my latest RSP statement.

• 16 Jan: FSMOne SGD to HKD exchange rate 5.667947 (Transaction date)
• 16 Jan 0130 UTC (930am HK Time)  XE.com : 5.69619
• 15 Jan 0930 UTC (530pm HK time - market close previous day) XE: 5.69732

I compared with two different exchange rates, the XE.com rate on the day of the trade, and the rate the day before the trade (as FSMOne might want to lock in the rate one day before the actual trade)

If FSM changed HKD on the morning of the RSP trade, the premium is 0.49%

If FSM changed HKD the day before at market close, the premium is 0.52%

Based on this, it does seem that FSMOne charges a higher Fx premium if you setup an RSP order using S$ and ask FSM to change the currency for you.

Looking at HSI Tracker Fund 2800.HK

 

While 2024 was a positive year, when you look at the longer term charts, HK/China stocks have done terribly compared to other markets. In 2024, I used FSMOne RSP to buy 2800, 2801, 3010, and 3110 and will continue to do so in 2025. One reason I am continuing is that valuations look attractive. Detractors claim that the numbers might be fake and given the experience with some S-chips, they might well have reason to believe this. However, when we are talking about the broader market and ETFs, it is hard to believe that the entire market is a fraud.

That is also where dividends come in. As the books say, "Dividends Don't Lie" and "Dividends still don't lie". In order to pay dividends, the company needs to have actual cash. 

Looking at the dividend history of the HSI Tracker Fund 2800.HK, it is nice that the dividend payout has increased over the last 3 years. There is still a long way to go, but its good that dividends are heading in the right direction.

With a current TTM (Trailing 12 month yield) of 3.97%, the dividend is satisfactory, and I am happy to continue my RSP of 2800.HK.  If TTM hits 4%, I may consider increasing my RSP amounts.

Beginning the year by stock-picking

 In Jan 2022, my resolution was to stock-pick less and buy more World and S&P500 ETF. I managed to stick to this resolution (more or less) in 2023 and 2024 which lucky given the S&P's performance. An older version of me might have been tempted to buy REITs instead which looked 'cheap' while S&P500 looked expensive. But I have learnt never to underestimate the power of the S&P500.

Anyway, I've started the year stock-picking. On 31st Dec I initiated a position in NVO after it crashed and continued to accumulate today. Also bought more NKE and UA.

SGD has been weakening against the USD and I suspect that it will continue to do so. I changed more USD today and put some into IBTU. I will probably add more USD to the FSMOne Autosweep account as well.