How To Build The 3 Fund Portfolio In Singapore | Lazy Portfolio

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Investing is quite easy if you know the way, in fact you can even get the same returns compared to pro investors. In this video, I’ll share with you a super simple way of investing, the 3 fund portfolio, or lazy portfolio. I’ll discuss the benefits of this portfolio and how to create it. Enjoy!

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0:00 - Intro

0:49 - What Is Lazy Portfolio
The lazy portfolio was created by a group of investors from Bogleheads. It consists of index funds, which are just a group of stocks representing something, like a sector or a country.

With this portfolio, you do not have to spend time studying or researching about stocks, thus saving time. You will know exactly what to invest in, and all you need to do is just buy the same funds over and over again.

As this portfolio consists of index funds, it has a lot of stocks, meaning that your portfolio will be super diversified. So you will have a super low risk of losing money in the long term.

There’s no one behind actively managing the funds, so they have a very low expense ratio compared to mutual funds.

3:30 - Local market index fund
The first fund is a local market index fund, which is just a fund from your home country. If you are from Singapore, it would be STI ETF. The benefit of this fund is that you won’t have any currency risk as stocks in this fund will have the local currency. With this fund, you are betting that Singapore will do well in the long term.

You can choose either SPDR STI ETF or Nikko AM Singapore ETF.
https://www.ssga.com/sg/en/institutional/etfs/funds/spdr-straits-times-index-etf-es3
https://www.nikkoam.com.sg/etf/sti

Personally I prefer SPDR STI ETF for a few reasons. It has higher assets under management, slightly better performance, and has been giving higher dividends most of the time.

If you want to buy this fund, you can use any stock broker that can buy local stocks, like Tiger Broker or Moomoo.

6:32 - International market index fund
With this fund, you are buying all the top companies from as many countries as possible. You are essentially betting that our entire world will do well as a whole. We could invest in Vanguard Total World Stock ETF (VT), but we we shouldn’t do so as we will have 30% withholding tax on our dividends. An alternative is to invest in VWRA or VWRD. I prefer VWRA because it accumulates dividends. If we want to control the percentage of whether to invest more in emergin market or developed market, we can’t do so. A solution is to find a fund that represents the market separately. For developed market, we can invest in IWDA or SWRD. SWRD would be a better choice because it has a lower expense ratio. For emerging market, we can invest in EIMI.

If you want to buy these fund, you can use any stock broker that can buy UK stocks, like Interactive Brokers

9:55 - Bond fund
The bond fund is to give us safety. They are known to be stable even when times are bad. We can choose ABF Singapore Index fund which tracks Singapore government bonds, has 2.1% yield, 0.25% expense ratio.

Or we can choose Nikko AM Investment Grade Corporate Bond ETF which tracks corporate bonds, 2.75% yield, 0.3% expense ratio.

But if you are young, don’t invest in bonds because a study by Vanguard showed that bonds will give much lesser returns compared to equities. We have time on our side to handle any market crash.
https://investor.vanguard.com/investing/how-to-invest/model-portfolio-allocation

We also have CPF which already acts as a bond.

11:51 - How to allocate
How you allocate is totally up to you. Personally, I would allocate a small percentage to STI ETF, maybe 10% because its performance is quite bad these past few years. Then I would give 70% weightage to SWRD and the remaining to EIMI.

Видео How To Build The 3 Fund Portfolio In Singapore | Lazy Portfolio канала Kelvin Learns Investing