Recently, more local investors are warming up to the benefits of ETFs, more specifically the STI ETF. In general, ETFs offer diversification and low cost. In his will, even Warren Buffet endorses the merit of owning low cost ETFs from Vanguard. He is confident that over the long run, a low-cost index fund will outperform actively-managed funds with high fees.
However, simply buying the STI ETF is not really optimal for local investors. When Warren Buffet said buy an index fund, I guess he is referring to one which tracks the S&P 500 index. That particular index is made up of Fortune 500 companies! Being vested in the top 500 corporations in USA is great diversification. Now, compare it to the STI's meagre 30 companies. So, if you live in America, for sure you should invest in some kind of S&P 500 ETF. Unfortunately, I live on a tiny island nation. ......