$$$ KPO and CZM $$$: StashAway - January 2018

Thursday, February 8, 2018

StashAway - January 2018

We have decided to invest more money (from $500 to $1,000 monthly) through StashAway and I blogged about it here - Automating Capital Growth Through StashAway.

1. ACCOUNT SUMMARY (as of the last day of the month)

StashAway Account Summary

Based on the statement (30 Jan 2018), we had $90.46 profit after taking into account a -$56.00 currency impact.

StashAway Asset Summary

The profit has vanished in the last few days to $13.00 but we are not too concern. Short-term volatility is noise while long-term will be $$$. That is how the market works.

SGD time-weighted returns: 0.7%
USD time-weighted returns: 4.5%


StashAway Portfolio Details


StashAway Transactions

I am still going to complain about the amount of USD we are getting from our SGD deposit and the exchange rate. Technically, this can be easily computed from the USD cash flows and once the USD amount is obtained, the exchange rate will be revealed.

SGD $990.00 converted to USD $756.78
Exchange Rate: 1.308174106

Not too bad. Managed to get some USD at its low.


StashAway Fee Calculations

No fee till April 2018 because I recommended a friend. The projected fee (assuming no referral) would be the monthly-average assets SGD $3,288.68 x 0.8% / 365 days * 31 days = $2.23

StashAway VS STI ETF
Since there is no way to compare the performances among the robo-advisors, I came out with a spreadsheet to track our StashAway portfolio performance (General Investing - Risk Level 28) against that of STI ETF which I will be updating on a monthly basis. For simplicity, I shall assume that one can either invest in Nikko STI ETF using POSB Invest-Saver or invest in SPDR STI ETF using SCB Priority Online Trading (no minimum commission). These would be the opportunity costs while we continue to invest in StashAway.

Apart from the absolute P&L, we should also look at the Reward-to-Risk Ratio where risk/volatility is taken into account. For more information, do read StashAway Clarifications - Reward-to-Risk Ratio. StashAway has the highest ratio of 1.25 which is significantly higher than the other 2 STI ETFs (< 0.4). Let me quote Freddy Lim (Co-Founder & Chief Investment Officer of StashAway), "for every dollar of risk taken, StashAway P28 is producing 1.25 times the return".

StashAway Portfolio VS STI ETFs

This month commentary: Interestingly, we can see that POSB Invest-Saver (NIKKO STI ETF) is in red. Apart from the performance of the market, we can also attribute it to the total fees/commissions incurred. At 1% sales charge, the total fees/commissions incurred is now > 4 times as compared to StashAway (0.8%) and SCB Priority Online Trading (~0.18%). Both ETFs have declared dividends and have been taken into account. StashAway did slightly better for this month. I think there is a need to redo/regenerate the volatility used to compute the Reward-to-Risk Ratio. Do take it with a pinch of salt for now. I have been compiling some data in order to do so :)

Which is the best? Only time will tell :)

This is the link to our spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF which I have also added to Our Portfolio page.

StashAway Referral Link for Our Readers
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  1. My portfolio at P16 is already at -$75 with 5k invested. I don't understand why yours are better considering I am more heavy in bonds.

    1. Hi Abdul,

      Imm Wu below took the words out of my mouth. Haha. We invest at different time. Both the FX rate and ETFs price would be very different. We cannot do a 1-1 comparison because there are too many factors to consider.

      Hope this clarifies :)

  2. Different timing and entry into the market. Returns are time weighted.

    1. Hi Imm Wu,

      Thanks for your response! You are right!

    2. Yeah im doing daily transfers though. Not sure how would that affect returns. Maybe more average than monthly? Haha

    3. Imm Wu how much are you putting in everyday?

    4. Daily/monthly transfer same same. At least you started your investing journey!

    5. I am putting in the extra interest that my savings account get at UOB One Account and Credit Card cashback. Around $10 per day. Though I am tempted to use leverage and invest in Stashaway, still considering given cost of borrowing is fixed at 1.8%.

    6. Woah! That's the next level already. I will not recommend using leverage to invest unless you really know what you are getting yourself into.

      Just curious though, how/where are you borrowing to get a fixed rate of 1.8%? That seems really low.

    7. Yeah now its even lower. 1.7% fixed rate mortgage term loan.

  3. I joined the first day stashaway was open to public. That should be the same time. Anyway noted the big difference

    1. Haha. We may start around the same time but we deposit money on different dates, hence the difference :)

  4. Entered at a crap timing. less than a month and I am down 5% even with a positive currency impact.

    1. Hi Ed,

      If you read a lot of the finance/investment books/articles, you will realize that the best time to invest was 10 years ago and the next best time is now. I am glad that you have started your investing journey :)

      There is no need to be affected about short-term volatility.

    2. Relax man. Just treat it like a savings plan. Do a recurring daily transfer and dont think about the returns.

  5. Would you be doing USD deposits since they offer them now? Or stick with SGD ones? What's the advantage?

    1. Hi Jacob,

      The minimum transfer amount is $10,000 USD per transfer so we will just stick with the SGD.

      Advantage is you have absolute control over the exchange rate or if you already possesses USD, you can invest through StashAway using those USD instead of transferring SGD.

      I am more amazed by the faster investment - from a few business day to just the next business day.

    2. I guess the USD function is for HNW pumping at least 10k USD per month into their accounts. Oh well. I got excited for a while.

  6. Hey KPO, I'm using Stashaway (and Smartly) as well, and actually have also recently realised that they are getting hit with the full dividend withholding tax (or is that not true?). Do you have opinions regarding that, and if the money could be better allocated to something else e.g. a similar ETF domiciled in Ireland (for the lower DWT) such as IWDA? I am wondering about this and thinking if I should instead consolidate vs. the possible perks of diversifying across robo-advisors. Was also considering that their costs are much higher than low-cost index-tracking ETFs. Would be happy to hear your thoughts!

    1. Hi Jia Ying,

      You are right. Dividends in US have withholding tax. StashAway portfolio are geared towards capital growth. We should not be investing in StashAway and expecting dividends as the main return. I would be extremely glad if the dividends can cover the fees!

      The options/alternatives are always there but are you able to diversify and allocate your portfolio into different assets like what StashAway does? Investing in IWDA is just one part of the equation.

      StashAway definitely cost more than individual low-cost index tracking ETFs but StashAway is doing more than just buying those ETFs for you. They are providing services such as asset allocation (gold, equity and fixed income), rebalancing/reoptimizing of portfolio to minimize the risk and maximize the return. Can an individual do that? Maybe but most likely not cost efficient unless the portfolio is big enough.

      These are just my opinions. Do make your own decisions and not take my words :) Hope this helps!

    2. Hey, thanks! You brought up some good points regarding the actual services that I probably forgot. I am planning to stick with my robo-advisors, but thought I might try to play devil's advocate for a bit to get a better understanding. Will look forward to a lower-cost option (or if the existing ones could reduce their costs) and other possible services in the future! Thanks for your answer :)

    3. No problem! I am hoping the same! Hahahaha.