Endowus - June 2020

Endowus statement always comes out pretty late around mid/late-mid month and this month seems to be much later. Anyway, I have reached out previously to ask and this was their response if you are wondering the same.

Junxu Lye, Endowus Chief Product Officer
We try to generate monthly statements as soon as we can, and right now it hovers around the 10th to 14th. The reason for this "delay" is because for some of our funds, the dividend payout date is on the last day of the month. Because we reinvest those dividends, our broker has to receive those dividends, put in a buy order, confirm the buy order, and then let us know the final confirmed units. Only after which we can then distribute it back to our clients. If we were to print the monthly statement without those, then we would have to re-print or send out an addendum, which would not be good as the statements would not be final. this is a slightly unique feature of the mutual fund industry (as opposed to say ETFs, where it is an accumulating share class where the funds take care of the reinvestment themselves). No good solution right now (and in the industry) but we are always on the lookout. Hope this helps!

Risk Profile
Goal type: General wealth accumulation
Risk tolerance: Maximise returns (loss tolerance -60%)

Monthly investment using SRS: $700

Account Summary

Capital: $6,650.00
Current: $6,471.66 (-3.88%)

There are quite a few differences as compared to StashAway. Firstly, all the cash has been invested while StashAway keeps 1% of the portfolio in cash. Secondly, the fees are not deducted on a monthly basis. The Access Fee charged by Endowus will be deducted at the end of each quarter as stated in their FAQ.

As of 22 July 2020, the portfolio value is $6,752.81 (+1.55%).

Asset Allocation

This shows that the number of shares for each fund that I owned:
- Dimensional Global Core Equity Fund (109.9920)
- Infinity US 500 Stock Index Fund (1,250.4800)
- Dimensional Emerging Markets Large Cap Core Equity Fund (43.8440)
- Dimensional Pacific Basin Small Companies Fund (38.8150)

It will be great if they actually showed my average price vs the current market price.

Transactions

Some of the funds have been sold/redeemed to pay for Endowus's fees. The fees are not presented clearly in the statement. I do not see a separate section for it except in the transactions above. Having said that, it is clearer in their web interface.

If we work backward, $3.67 * 4 / 0.004 ~ $3,670 is the invested amount being charged for the first quarter (01 Jan 2020 to 31 Mar 2020) which seems about right.

That's all! Overall, I think the statement is pretty straightforward and easy to read.

If you are interested in Endowus, do use our referral link for our readers! You will get S$10,000 managed free for 6 months ($20 equivalent) and we will get $20 too!

You might be interested in previous months update too:- Endowus CPF/SRS Review
- Endowus - January 2020 - $3,692.02
- Endowus - February 2020 - $3,704.57
- Endowus - March 2020 - $4,153.50
- Endowus - April 2020 - $4,849.67
- Endowus - May 2020 - $5,797.36
- Endowus - June 2020 - $6,471.66

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DBS Multiplier Upcoming Changes

DBS will be decreasing the Multiplier interest w.e.f 1st August. Most impacted will be those with salary crediting and 1 category (credit card). Surprisingly, DBS has decided to leave the 3 or more categories alone this time round when one would think this group of people are less likely to leave/change their savings account.

Anyway, I took a quick look at the various savings account and felt that the Multiplier is still one of the better savings accounts that do not really encourage/require you to meet a minimum spending per month. However, the low 1%+ interest is really a hard pill to swallow so we have decided to fulfill another category - Investments by starting a $100 monthly/regular savings plan (DBS Invest-Saver) on Nikko STI ETF which will only be recognized for the first 12 consecutive months. Alternatively, you can consider refinancing your housing loan but that is out of the question for us when we refinance a few months ago with UOB - My Experience with Mortgage Brokers - Redbrick and iCompareLoan.

There is really nothing new here. When we blogged about DBS Multiplier + SSBs + Joint Account = Higher Interest! 2 years ago, we decided to take the SSBs bond ladder route because it seems less troublesome and "permanent" but I guess not. lol. Since the SSBs are now useless, we went to redeem all 6 of them in order to partially finance this new plan as well as to hold more cash for the crash/baby whichever comes first. Haha.

If you have not tried redeeming the SSB before, you can take a look above. Honestly, it is not very intuitive as one will have to select the year and month you would like to redeem. To do it correctly, you will have to log in to your CDP in order to view them. Not sure how it is going to work if one were to redeem the incorrect bond, will the $2 admin fee be forfeited?

DBS Invest-Saver has a sales charge/fee of 0.82% which is a small price to pay for more interest. Assuming if we have $20k in our savings account, with 1.8% interest, we can get ~$30 by "sacrificing" $0.82 monthly. On the other hand, doing nothing will net us just ~$18 interest with 1.1% interest. Meanwhile, the $99.18 monthly investment might continue to grow too. The only troublesome part is this will only be recognized for the first 12 consecutive months so one will have to take note of its ending period and change to another ETF in order to fulfill the Investments category. Another benefit of fulfilling 2 or more categories is the increase in account balance (from $25k to $50k) that will be eligible for the bonus/higher interest.

In my opinion, DBS will probably nerf/cut the interest for the Multiplier account again in the next few months but it will be targeting those people with 3 or more categories. It is simply unsustainable in this low interest environment. Wait for it, it is definitely coming!

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Bye Sheng Siong! Hi SATS!

We decided to sell all our Sheng Siong shares (18,000 units) at $1.64 today and it has been our top/best investment after all these years.

After holding for about 1358 days (~3.7 years) with an average price of $0.907, we have almost doubled our capital with an absolute return of 94.54% and an annualized return of 19.58%.

We felt that Sheng Siong is currently trading at a pretty high valuation and the market seems to be overly optimistic. Sheng Siong Q1 financial report has been very impressive, almost doubling its profit/EPS when compared against the same period last year.

However, when we looked at the breakdown, the increase in revenue is mostly due to the "hoarding" effect whenever PM Lee gave his speeches. lol.

Anyway, if we were to look at the last few years, Sheng Siong has been trading at an average/median PE of 20-21. Based on the current price and its average/median PE, the market is expecting its EPS for 2020 to increase by 55% to 7.86 cents as compared to 5.04 cents last year. It just didn't look realistic when we forecast it, hence it felt overvalued when we were looking at it.

Will it goes higher? Maybe, just look at Tesla!

We have also decided to redeploy a bit of the cash from the sale of Sheng Siong to buy SATS (4,000 units) at $2.84. SATS came tumbling down from its high of $5+ due to COVID-19 where it even reported losses for the last quarter (ending 31 March 2020). The management was also being very prudent by cutting dividends by ~68%! We decided to buy it as we see this as an excellent opportunity to accumulate a good business (it is essentially a monopoly in Singapore) and it is a recovery play. I can see it returning to $5 once a vaccine is found but can't say the same for SIA especially after its right issues.

Similarly, I computed its average/median PE which is around 19-20. Based on the current price and its average/median PE, the market is expecting its EPS to decrease to 13.9 cents. In my opinion, this is still quite optimistic as its Q1 losses should be a lot more when travel restriction is placed around the world compared to the last quarter when it was just beginning.

In addition, there were multiple share buy back around ~$2.90 which could be a sign that the company is undervalued. You can read more about share buy back here - Why Would a Company Buy Back Its Own Shares?

Unfortunately, SATS has dropped quarterly reporting so we can only wait till around October for its half year financial statement to get a better overview of its business.

What's the worst that can happen? Getting kick out of STI lor like SPH. lol.

You can take a look at the above spreadsheet here.

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