07 January 2014
Are Exchange Traded Funds (ETF) Right For You?
I have been dollar cost averaging STI ETF (ES3) monthly since 18 May 2011 and put in $160k up to end 2013 with 53455 ES3 units being purchased. Current market value was $172659 with dividend being reinvested, up 7.91%. During the same period from 18 May 2011 to 30 Dec 2013, STI INDEX rose from 3141.21 to 3167.43, up merely 0.83%! ES3 rose from 3.21 to 3.21. ES3 average cost (DCA COST) is 3.09, which means that $6414 is saved due to DCA effect:(3.21-3.09)×53455=6414, while $6245 is net dividend received: (172659-160000)-6414=6245. Net dividend contributes nearly half in ES3's market valuation gain!!! Conclusion - Dollar cost averaging stock index ETF is a better choice for small timers like me, which took me one and half years to reach this conclusion before implementing my current 30-year long term investment plan starting from 18 May 2011.
Labels: Dollar Cost Averaging, ETF, Live Trading Records, STI ETF
