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

Thursday, October 18, 2018

StashAway - September 2018

I blogged about StashAway Withholding Tax Reimbursement for FY 2017, compiled the total dividends and fees and concluded that the portfolio is pretty sustainable (dividends > fees) without injecting more funds.

In hindsight, CZM's decision to stick with the current P28 portfolio seems to be the better move as compared to a 100% equity (highest risk) portfolio as the stocks market went into another round of correction in the last 2 weeks.

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

Based on the statement (30 September 2018), we gain $310.18.

As of 18 October 2018, the total return has been reduced to just $39.27. In fact, it was negative a few days ago. We lost -$264.43 from investment returns with a huge currency impact of  $303.70. Not good! In our last monthly update, I said that I would have preferred the USD to be weaker because we will be going to the US for our honeymoon. Weaker USD meant that we can convert the same SGD for more USD to invest too.

SGD time-weighted returns: 0.7%
USD time-weighted returns: -4.7%



SGD $990.00 converted to USD $723.01 (USD $722.64 last month)
Exchange Rate:  1.3693 (1.3700 last month)


The fee stated is based on the monthly-average assets SGD $11,674.30 x 0.8% / 365 days * 30 days = $7.68

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 Nikko STI ETF/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".

This month commentary: All the investments regardless of the platform or underlying ETF are in red/losing money. StashAway is considered to be outperforming the STI ETFs as it is not losing as much. Assuming a capital of $1,000, losing $500 is equivalent to a 50% loss but to earn back that $500 (back to $1,000) requires a gain of 100%. The example may not be intuitive to some but a conservative portfolio will limit the losses and protect your capital.

Going forward it will be even more interesting when the commissions/fees incurred by StashAway exceed that of POSB Invest-Saver. This will be a battle between cheaper/lesser fees and asset allocation/diversification...

I believe 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
Here you go: KPO and CZM Referral Link

You might be interested in previous months update too:
StashAway - January 2018
StashAway - February 2018
StashAway - March 2018
StashAway - April 2018
StashAway - May 2018
StashAway - June 2018
StashAway - July 2018
StashAway - August 2018 + An Unpleasant Experience

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