Mar 27, 2017

Cory Diary: Is STI Performance truly understood ?

What is STI Index true performance ? The often quoted is 7% XIRR or so called Compounded which includes dividends distributed. This is achieved if one invest all their money one time exact in the year 2005 low and measured on the final price this month of STI. Yes is about 7%.

The issue is can this be repeated ? That is the catch.

Firstly our money in fund is constantly injected and for some withdraw during the 12 years period.

Secondly, how sure are we the next 12 years will be another 7%. Are we sure we can extrapolates ?

Finally, investment period is critical. Investing in 2005, 2011 and now will yield different STI performance. This can be shown by taking the dividends distributed and using different period of entry.

As you can see above, the Compounded or XIRR are total different on entry year. I am not saying STI ETF is not good. I have some too. But I want to remind myself that, if I started investing in STI in year 2008, you are only earning 0.56% after dividends. Is ALL ABOUT ENTRY TIMING.

So is it good to invest in STI ETF now ? You tell me :P



  1. I dont know anyone who invest a lump sum in STI ETF. They usually invest in regular interval over a long period of time; or attempt a bit of market timimg.

    Can STI performance be repeated? It is the same question to you - can your past performance be repeated (if it is good)? or improved (if it is bad)? Nothing special, there is no catch.

    It is not wise to invest for a period of only 12 months. We cannot extrapolate STI index over the next 12 months, just like we cannot extrapolate our stock investment returns in the next 12 months. Nothing special also.

    STI index returns measured from 2005, 2008 and 2011 are different, just like your portfolio returns measured from 2005. 2008 and 2011 are different. Nothing special.

    It is not about timimg, if you intend to invest regularly over a long term period.

    It is good to invest STI ETF now, if you intend to invest regularly over a long period of time.

    Many of us are unknowly affected by our own bias and emotion like ego, that we always think we are good investors with skill, and we are above average. We observed such scenarios, where people only talk about their investment returns when they are good, and stop talking when the returns underperform; similarly people talk about stocks that they made money, and not the stocks that they lost(or classified them as speculation buy, small sizing to justify the lost to themselves).

    In fact, most of us (me included) are just average or below average investors, but we just can't see it ourselves. We often talk about only wining stocks or other investment metrics like passive income, cummulative dividends, stocks that is of no cost etc. to justify ourselves that we are good investors with skill.

    I am not talking about you, so I hope you wont be offended. Just a general observation of myself.

    1. Hi Anonymous, I welcome intellectual debates. It will be better if you have a name. I would like challenge idea of regular invest in STI. This is as keen to DCA. Basically you are mainly riding the 3 Banks and Telco and I can replicate this easily and will not be very far off. However the definition of long term needs to be define. The last 20 years is not going to be same as next 20 years. How many years do you have to use what you have profited if you really does ?

      A personal portfolio is the best to me imo. You balance the next term risk, control the variation, dividends play for cash flow and some key stocks like the banks and telco if you want.

      If I am to strip away my new funds injections yearly (this year maybe 20%-30% increase I think of new fresh fund for the 3 months), PS, bonds .... and measured across 10 years, I easily beats the STI Index hands down. I have been in the market for more than 15 years.