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What Is Your Returns If You Dollar Cost Averaged Into The Straits Times Index Exchanged Traded Fund (STI ETF) For The Past 8 Years

” Invest into the STI ETF they say. It is good, they say.”

That was exactly what I did upon graduation.

The reason behind it was simple back then.

  • Most of the financial blogs were recommending STI ETF
  • Most of my friends were Dollar-cost averaging into the STI ETF
    (that was the only thing we know to invest in)
  • I am not really the best at handling peer pressure, so I invested too.

 

With time totally not on my side, I can finally write this article on the returns if you invest in the STI ETF over the past 8 years.

What is STI ETF?

To do a quick recap, the STI ETF stands for Straits Times Index Exchange Traded Fund.

Step By Step Guide ETF Seedly

  • It is designed for passive investors who are just getting started.
  • The STI basically tracks the top 30 companies in the Singapore market. Hence, it is made up of companies we are all familiar with, such as DBS or Singtel.
  • It is diversified across various industry verticals, which helps spread the risk of investors.

Step-by-step guide to STI ETF investing

Returns if you dollar-cost average into the STI ETF over the past 8 years

There are 2 methods to invest in the STI ETF, be it using

  • Dollar-cost averaging
  • Lump-sum averaging

The dollar-cost averaging method goes well with most beginner investors simply because:

  • It requires less time to monitor the price movement 
  • One can start investing with as little as S$100 per month through a regular savings plan
  • The dollar-cost averaging method helps an investor buy more shares when the price is low and lesser shares when the price is high.

Read more: Dollar-cost averaging vs Lump sum investing


 

Further Reading: S$100 per month investment, over 8 years into the STI ETF

“Brace yourself for some crazy numbers!”

Assuming, an investor

  • Invests S$100 per month into the STI ETF
  • He has been doing this for the past 10 years
  • He invests using a Regular Savings Plan that charges him 1% of the total investment amount
    (Since that is the cheapest in the market for his investment amount)
  • Because of the Regular Savings Plan, he is on, his money is invested into the Nikko AM Singapore STI ETF

To determine the total gains of this investor’s Dollar-cost averaging strategy into the STI ETF over the years, we will be running two sets of numbers:

  • Changes in the price of the STI ETF over the years
  • Total dividends collected over the years

For convenience, we use the monthly closing price in the illustration.

Read also: Which Regular Savings Plan Is The Cheapest?

Changes in the price of STI ETF (G3B.SI) over the years

Below, we calculate the returns over the years in terms of price and also, to find out the number of stocks he bought over the 8 years.

Changes in the price of STI ETF (G3B.SI) in the year 2010

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20102.7735S$97.92
Feb 20102.7935S$98.63
Mar 20102.9333S$97.66
Apr 20103.0033S$99.99
May 20102.8135S$99.33
Jun 20102.8334S$97.18
Jul 20103.0232S$97.61
Aug 20103.0033S$99.99
Sep 20103.1531S$98.63
Oct 20103.1831S$99.57
Nov 20103.1831S$99.57
Dec 20103.2630S$98.78
Total-393S$1,184.86
  • In the year 2010, one would have invested S$1,184.86 on 393 units of STI ETF.

Changes in the price of STI ETF (G3B.SI) in the year 2011

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20113.2430S$98.18
Feb 20113.0532S$98.58
Mar 20113.1431S$98.31
Apr 20113.2230S$97.57
May 20113.2030S$96.96
Jun 20113.1631S$98.94
Jul 20113.2230S$97.57
Aug 20112.9433S$97.99
Sep 20112.7236S$98.90
Oct 20112.8934S$99.24
Nov 20112.7336S$99.27
Dec 20112.6836S$97.45
Total-389S$1,178.96
  • In the year 2011, one would have invested S$1,178.96 on 389 units of STI ETF.

Changes in the price of STI ETF (G3B.SI) in the year 2012

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20122.9333S$97.66
Feb 20123.0232S$97.61
Mar 20123.0532S$98.58
Apr 20123.0232S$97.61
May 20122.8334S$97.19
Jun 20122.9333S$97.66
Jul 20123.0832S$99.55
Aug 20123.0832S$99.55
Sep 20123.1531S$98.63
Oct 20123.0932S$99.87
Nov 20123.1231S$97.69
Dec 20123.2230S$97.57
Total-384S$1,179.17
  • In the year 2012, one would have invested S$1,179.17 on 384 units of STI ETF.

Changes in the price of STI ETF (G3B.SI) in the year 2013

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20133.3329S$97.54
Feb 20133.3329S$97.54
Mar 20133.3729S$98.71
Apr 20133.3929S$99.30
May 20133.3729S$98.71
Jun 20133.2130S$97.27
Jul 20133.2930S$99.69
Aug 20133.1131S$97.38
Sep 20133.2730S$99.09
Oct 20133.2530S$98.48
Nov 20133.2230S$97.57
Dec 20133.2130S$97.27
Total-357S$1,178.55
  • In the year 2013, one would have invested S$1,178.55 on 356 units of STI ETF.

Changes in the price of STI ETF (G3B.SI) in the year 2014

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20143.0632S$98.90
Feb 20143.1631S$98.94
Mar 20143.2630S$98.78
Apr 20143.3529S$98.13
May 20143.429S$99.59
Jun 20143.3529S$98.13
Jul 20143.4328S$97.01
Aug 20143.4228S$96.72
Sep 20143.3629S$98.42
Oct 20143.3629S$98.42
Nov 20143.4628S$97.85
Dec 20143.4528S$97.57
Total-350S$1,178.46
  • In the year 2014, one would have invested S$1,178.46 on 350 units of STI ETF.

Changes in the price of STI ETF (G3B.SI) in the year 2015

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20153.4528S$97.57
Feb 20153.4628S$97.85
Mar 20153.5028S$98.98
Apr 20153.5727S$97.36
May 20153.4828S$98.42
Jun 20153.4228S$96.72
Jul 20153.2630S$98.78
Aug 20153.4228S$96.72
Sep 20153.0232S$97.61
Oct 20153.0932S$99.87
Nov 20152.9733S$99.00
Dec 20152.9933S$99.66
Total-355S$1,178.54
  • In the year 2015, one would have invested S$1,178.54 on 355 units of STI ETF.

Changes in the price of STI ETF (G3B.SI) in the year 2016

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20162.6836S$97.45
Feb 20162.7236S$98.90
Mar 20162.9134S$99.93
Apr 20162.9233S$97.33
May 20163.4828S$98.42
Jun 20162.9333S$97.66
Jul 20162.9333S$97.66
Aug 20162.9333S$97.66
Sep 20162.9733S$99.00
Oct 20162.9233S$97.33
Nov 20163.0232S$97.61
Dec 20163.0033S$99.99
Total-397S$1,178.94
  • In the year 2016, one would have invested S$1,178.94 on 397 units of STI ETF.

Changes in the price of STI ETF (G3B.SI) in the year 2017

DatePrice of STI ETF
(G3B.SI)
Lots PurchasedCosts
(Including Fees)
Jan 20173.1031S$97.07
Feb 20173.1631S$98.94
Mar 20173.2530S$98.48
Apr 20173.2630S$98.78
May 20173.3129S$96.95
Jun 20173.3429S$97.83
Jul 20173.4228S$96.72
Aug 20173.4129S$99.88
Sep 20173.3529S$98.13
Oct 20173.5128S$99.27
Nov 20173.5627S$97.09
Dec 20173.5427S$96.54
Total-348S$1,175.68
  • In the year 2017, one would have invested S$1,175.68 on 348 units of STI ETF.

Dividends of STI ETF year 2010 to 2017

Of course, it does not simply end here. The STI ETF gives out dividends twice annually.

The amount of dividends are one received depends on how many units one has during the exercise date and the amount dictated.

The history of dividends given out by NIKKO AM STI ETF looks like this:

dividend history of NIKKO AM STI ETF

source: SGX  

In the above example, where one dollar cost averaged in the STI ETF at S$100 per month, this is the total amount of dividends he would have received:

DateAmount of units accumulatedDividends per shareTotal Dividends received
29 Apr 2010136S$0.02S$2.72
30 Sep 2010301S$0.03S$9.03
29 Apr 2011516S$0.03S$15.48
13 Oct 2011676S$0.035S$23.66
27 Apr 2012911S$0.03S$27.33
11 Oct 20121,105S$0.035S$38.68
29 Apr 20131,282S$0.035S$44.87
10 Oct 20131,462S$0.045S$65.79
1 Jul 20141,730S$0.0465S$80.45
2 Jan 20151,900S$0.0495S$94.05
1 Jul 20152,069S$0.0482S$99.73
4 Jan 20162,263S$0.0452S$102.29
1 Jul 20162,460S$0.0344S$84.62
3 Jan 20172,655S$0.0604S$160.36
3 Jul 20172,832S$0.0231S$65.42
Total --S$914.70
  • The investor would have accumulated total dividends of S$914.70 by the end of 2017.

Average Price of STI ETF using Dollar Cost Averaging Method from the year 2010 to 2017

Based on the above calculating, using Dollar Cost Averaging Method, an investor would have invested a total of S$9,433.16 on 2,972 units of STI ETF.

This works out to be an average price of S$3.17 per unit. 

We cross-reference that to the latest price:

Dollar Cost Averaging STI ETF

chart plotted using: sg.finance.yahoo

  • The current price since the start of the year 2018 has been above 3.40.
  • To be modest and taking 3.40 as the benchmark, each unit would have gained a share price of 0.23.
  • This makes a total gain of S$683.56 based on share price.

Dividends of STI ETF bought him lunch for 9 months

Assuming an investor survive on his favourite fried rice for lunch at work every day.

 

  • He purchases 5 plates of fried rice per week, one for each weekday.
  • This delicious (and addictive) fried rice costs him S$5.
  • He decides to pay his lunch using dividends he collected over the years from the STI ETF
  • It allows him to purchase 183 plates of fried rice.
  • The dividends he collected paid for his lunch for 9 months.
  • This is excluding the face value gain of the units he purchased.

 

 

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