DBS Bank has a good webpage. It shows the structured investments marketed by them over the past years, and are still current. You can find out quite easily the current indicative price of these investments.
The structured investments are listed under the following categories:
Credit linked notes - 5 tranches
Currency linked deposits - 4 tranches
Equity linked deposits - 19 tranches
Index linked deposits - 47 tranches
Interest rate deposits - 76 tranches
Total: 141 tranches
Based on the prices posted in this website, it seems that most of the investments are below par, ie less than 100% in prices. In the worst case, the drop is more than 30%, if the investor cash out now.
There are just a few tranches under "indexed linked deposits" which show an apprecation of up to 24% for the period (about 4 years) that the investments were held. The annual return is about 5-6%.
It seems that most of the structured products performed poorly, and gave a poor return.
Saturday, July 7, 2007
Buy from NTUC Income
Dear Mr Tan,
If I like to buy insurance from NTUC Income, who do you recommend? Can I buy directly and enjoy a discount?
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REPLY:
You can approach any of the advisers who are listed in the right panel of my blog. They maintain their own blogs. They are:
Thomas Phua
Alvin Soong
John Low
Glen Toh
You can also call the NTUC Income business center, if you wish to buy directly.
If I like to buy insurance from NTUC Income, who do you recommend? Can I buy directly and enjoy a discount?
------------------------------------------
REPLY:
You can approach any of the advisers who are listed in the right panel of my blog. They maintain their own blogs. They are:
Thomas Phua
Alvin Soong
John Low
Glen Toh
You can also call the NTUC Income business center, if you wish to buy directly.
My approach towards insurance
Mr Tan,
If annuity is so good, how much of it did you buy? Also, how much of regular-premium ILP did you buy? It'll be good to see an insurance expert walking the talk.
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REPLY:
When I was younger, I bought regular premium policies to provide the insurance protection and accumulate some savings. I also bought insurance for my children. I must have more than 10 policies at one stage. I bought the policies from NTUC Income, as the sales charges are modest (and not excessive).
I now have many investment linked policies, invested in the combined fund and the money market fund. They are also with NTUC Income. They are mostly invested with single premiums.
I advise young people to buy a regular premium ILP plan from NTUC Income - as the sales charges are lower than similar plans from the market. You can also buy directly from their business center, and enjoy some incentive.
For those who are able to buy unit trusts directly through the internet, you can do so directly, and save on the adviser fee. But, you have to be careful about the fund that you invest in. Make sure that you are not hit with higher annual fees.
As I have more than sufficient savings, I do not need to participate in the pooling of longevity risks in a life annuity. My savings, which is in the combined fund, will last more than my remaining lifespan. So, I do not have any life annuity at this time. (But, I may change my mind at a later date).
If annuity is so good, how much of it did you buy? Also, how much of regular-premium ILP did you buy? It'll be good to see an insurance expert walking the talk.
-----------------------------------
REPLY:
When I was younger, I bought regular premium policies to provide the insurance protection and accumulate some savings. I also bought insurance for my children. I must have more than 10 policies at one stage. I bought the policies from NTUC Income, as the sales charges are modest (and not excessive).
I now have many investment linked policies, invested in the combined fund and the money market fund. They are also with NTUC Income. They are mostly invested with single premiums.
I advise young people to buy a regular premium ILP plan from NTUC Income - as the sales charges are lower than similar plans from the market. You can also buy directly from their business center, and enjoy some incentive.
For those who are able to buy unit trusts directly through the internet, you can do so directly, and save on the adviser fee. But, you have to be careful about the fund that you invest in. Make sure that you are not hit with higher annual fees.
As I have more than sufficient savings, I do not need to participate in the pooling of longevity risks in a life annuity. My savings, which is in the combined fund, will last more than my remaining lifespan. So, I do not have any life annuity at this time. (But, I may change my mind at a later date).
Life annuity - capital preservation
Dear Mr Tan,
Under a life annuity, the annuitant loses the capital on death. Is there a way to preserve the capital for the children?
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REPLY:
You can preserve the capital if you use only the interest. At present, interest rate is 2% per annum. If your capital is $100,000, you can use only $2,000 a year, ie less than $200 a month. This is not adequate for your needs.
If you spend more than the interest, your capital will be exhausted at some time in the future. For example, if you take out $6,000 a year (ie 6% of the capital sum), the capital may run out completely in about 20 years time, maybe earlier. Beyond that date, you will have nothing left.
When you buy a life annuity, you are pooling the risk with other annuitants. Those who die earlier will leave behind the balance of the capital in the fund, so that it can continue to make the payment to those who live longer, ie beyond the 20 years.
If you have a large capital sum, you can use a portion to buy a life annuity for yourself. You can distribute the balance to your chidren now, or invest it separately to be given to them later.
Under a life annuity, the annuitant loses the capital on death. Is there a way to preserve the capital for the children?
----------------------
REPLY:
You can preserve the capital if you use only the interest. At present, interest rate is 2% per annum. If your capital is $100,000, you can use only $2,000 a year, ie less than $200 a month. This is not adequate for your needs.
If you spend more than the interest, your capital will be exhausted at some time in the future. For example, if you take out $6,000 a year (ie 6% of the capital sum), the capital may run out completely in about 20 years time, maybe earlier. Beyond that date, you will have nothing left.
When you buy a life annuity, you are pooling the risk with other annuitants. Those who die earlier will leave behind the balance of the capital in the fund, so that it can continue to make the payment to those who live longer, ie beyond the 20 years.
If you have a large capital sum, you can use a portion to buy a life annuity for yourself. You can distribute the balance to your chidren now, or invest it separately to be given to them later.
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