STI ETF XIRR Performance from 2007 to 2015 – Shocking Results

I have finished my portfolio review for the year and I want to compare it against the Index. I decided on a hypothetical scenario of buying 1 lot of STI ETF on 11 December 2006 (my first stock purchase). I will also include the dividends (source: SPDR website) in my XIRR calculation.

STI ETF XIRR 2007 to 2015

  2014 2015
XIRR: 4.16% 2.99%

Over a 9 year period my XIRR is just 2.99%. That could not be right.

STI ETF Performance Chart

Source: SPDR® Straits Times Index ETF (ES3) performance chart

The performance chart also shows an annualized return of 3.07% with dividends. I am not sure how cumulative returns is calculated.

It would mean that anyone who buy a high yielding REIT would have easily beaten the index. In fact a retail bond or Fix Deposits with 3% or more would have also beaten the index.

I still think that I could have made a mistake in my calculation. Any sharp eye investor can point it out?

Update: 30 Dec 2015

Added 10 year XIRR calculation as of 31 October 2015 to compare against the 10 year NAV from SPDR® Straits Times Index ETF (ES3) performance chart.

STI ETF XIRR - 31 Oct 2005 to 31 Oct 2015

6.99% XIRR is almost similar to 6.28% NAV.

Comments

  1. says

    Hey Derek,

    If I didn’t interprate wrongly, the actual return is 6.28%, 3.07% is only the STI index which does not factor in dividend.

    “The index returns are stated on a price only basis and do not include dividends. Index returns do not represent actual ETF performance and are for illustration purposes only.”

    And also STI ETF NAV return assumes that the pay out dividend will be reinvested. Which I think their reported return will always be higher than what investors would achieve as most of the time the dividend we collected is just so small that we cannot reinvest it.

    “The performance of the Fund, inclusive of dividends, is net of all charges payable upon reinvestment.”

  2. says

    to add 1 more:

    If you toggle between: FUND WITH DIVIDENDS and FUND WITHOUT DIVIDENDS, you will notice that the Index return does not change, and NAV changes significantly by about 3%.

    • says

      Hi GV,

      Thanks for your views. I believed we are both looking at the 10 year annualized performance ya?

      I have calculated and uploaded the 10 year XIRR from 31 October 2005 to 31 October 2015 inclusive of dividends. XIRR is 6.99% which is pretty close to the the 10 year annualized NAV with dividends.

      I think it is going to be difficult to calculate exactly how much our portfolio needs to earn to beat the index. I think a rough estimate of 7 to 10% multi-year XIRR will be good enough. What do you think?

  3. desmondC says

    You bought at 29.50, after accounting for the stock split 10 for 1, you would have bought $2.95 based on today’s prices (not accounting for inflation). Since the current level is $2.95, you would not have made any capital gains.

    If you have bought at the low level of $1.52 in Mar 2009, you would have made a gain of 94%. Your reference points (both buy and current) is important. You chose a time where stocks were arguably expensive and compare it to a time when it’s cheaper. The PE now is 11.69, what was the PE back in 2006?

    You may want to consider different scenarios, like dollar cost averaging or choosing different reference points for comparison.

    • says

      Hi Desmond,

      Dec 2006 was date I bought my first stock and I agree with you that if I have bought at different price levels especially during the lows of 2009, the results will be very different.

      My intent is to find out if my portfolio has beaten the index and I used a simple calculation. Given the many different scenarios, do you have any suggestions how I can more accurately and easily calculate the actual STI returns based on my investment portfolio from 2006 till present? One method that I have thought off is to replace all my stock purchases to STI ETF purchase but that is going to take a lot of effort.

    • says

      Hi Lizardo,

      Thanks for sharing. I’ve read your 2015 review and you are using IRR. Your STI IRR for the year is -11.3% (after 3% dividends) whereas my XIRR number is -8.51%. I wonder where is the missing 3%. Nevertheless, you earned more dividends and still beat the index comfortably and that’s all that matter.

Leave a Reply

Your email address will not be published. Required fields are marked *