Global Investment: A Pathway to Wealth Beyond Borders

The world has never been closer than it is today. With just one click, you can purchase shares in New York, London, or Tokyo while seated at a kopitiam in Tiong Bahru. For many in Singapore, investing in global markets is key to growing savings, preparing for retirement, and shielding wealth from fluctuations in the local economy. Numerous questions arise: Where to start? Which platform is secure? How to balance risk when stepping into broader markets?

A Global Perspective on Investment

Beyond the Straits Times Index, there are over 40,000 listed companies, thousands of bonds, and hundreds of ETFs. This vast landscape provides opportunities to profit from AI innovation in the U.S., green hydrogen in Europe, and long-term urbanization in India. Since many transactions are dollar-denominated, you naturally gain protection against a potential decline in a currency.

The global integration of capital markets continues to grow. From 2020 to 2024, retail accounts in the Asia-Pacific region increased by approximately 70%, and cross-border ETF flows hit a record US $3 trillion, according to BlackRock data. Singaporeans benefit from this, as it is easy to remit funds in and out, thanks to the liberal foreign-exchange regime supported by the MAS.

Why You Should Look Beyond Borders

First, global investment offers greater diversification. If you are solely anchored in the SGX, you rely on the profits of a few major banks and property developers. Growth is sporadic. Overseas, you gain access to the semiconductor boom, renewable energy expansion, and stable consumer staples that do not depend on just one region.

Second, price-to-earnings multiples in other markets can be more competitive. For example, in March 2025, the S&P 500 had a 18 times earnings ratio, while some emerging-market indices were as low as 11-12 times, making them attractive for bargain hunters. Third, you gain exposure to various currencies such as the U.S. dollar, euro, and yen. If local pressures weaken, your foreign earnings can act as a hedge.

Ways to Access the Global Market

Online Brokerage Account

The easiest route is to open a multi-currency brokerage account. Interactive Brokers and Saxo Markets allow trading on over 150 exchanges, including the New York Stock Exchange and Deutsche Börse. They accept Singapore dollars as base currency, which helps reduce forex costs. When buying U.S. stocks, allocate funds for the 30% IRS dividend withholding tax and file the required W-8BEN form to reduce it to 15%.

Exchange-Traded Funds (ETFs)

For a simple set-and-forget approach, choose an ETF. For instance, the Vanguard FTSE Global All Cap Index Fund offers exposure to more than 7,000 foreign companies. The fees are lower (typically 0.08% – 0.25% per year) compared to actively managed funds. Through POSB’s regular savings plan, you can subscribe with as little as S$100 monthly, automatically accumulating units.

Robo-Advisors

If you’re short on time, opt for a MAS-registered robo-advisor. Endowus and StashAway offer low-cost, globally diversified portfolios based on your risk score. They feature automatic rebalancing and tax-efficient fund selection. Simply download the app, complete the risk profiler, and auto-fund on your chosen date. Total fees have dropped to 0.6% – 0.8% per year, lower than most unit trusts.

Retirement Schemes and CPF Investments

You can use part of your CPF Ordinary Account to buy unit trusts or ETFs under the CPF Investment Scheme. For example, you can invest in the Nikko AM Global Dividend Growth Fund, which shares income from global companies. Note, you’ll need a minimum CPF balance and thorough evaluation as capital is not guaranteed.

Key Asset Classes with Global Reach

• Stocks of multinational companies (e.g., Apple, Toyota, Nestlé)
• Bonds issued by governments and corporations in different currencies
• Global REITs earning rental income from commercial spaces in various countries
• Alternative investments like gold, lithium, and thematic ETFs

Overcoming Common Barriers

Currency Conversion Costs: Don’t let your gains erode due to repeated exchanges. Use your broker’s multi-currency wallet to park USD, EUR, or HKD and transfer only when necessary. Set alerts when the spread drops below 0.15%.

Tax and Legality: The UK imposes a stamp duty of 0.5% on trade value, while the U.S. has no stamp tax but does have a Securities and Exchange Commission fee. Also, review Singapore’s double taxation treaties, especially if earning from the European Union.

Overconfidence Bias: Many beginner investors place all their funds in familiar tech giants. Build a balanced portfolio — don’t go all in on the U.S. Instead, add Asia ex-Japan and European healthcare to avoid simultaneous declines.

Developing a Strategy That Fits You

Start by setting clear goals. If it’s for your child’s tuition in ten years, you might want to avoid overly aggressive assets. If it’s for retirement in 25 years, a larger allocation to equities is feasible. Use a 60/40 or 70/30 equity-to-bond split, depending on age and your ability to tolerate declines.

Create an auto-debit plan so emotions don’t disrupt your discipline. When the market rises, rebalance annually: sell the overperforming assets and shift to underperforming ones to maintain your target allocation. The SPIVA 2024 report shows that 85% of active managers underperform the benchmark after five years, so low-fee index funds are preferable unless you have a unique edge.

A Success Story

In 2018, Grace Tan started with SGD $10,000 in an international broker. She experienced her first roller-coaster ride when global growth slowed in 2020, and her portfolio dropped by 30%, but she didn’t panic. She used Singapore Budget COVID vouchers to add to her ETFs when the market hit rock bottom. By April 2025, her total had grown to over SGD $21,500, an average 11% compounded return. Grace attributes her success to “reading diligently, budgeting patiently, and setting aside even a small amount each month.” Her story proves that you don’t have to be a millionaire to benefit from global growth.

The Most Important Lesson

The global market has expanded, and the doors are open to Singaporean investors as long as there’s an internet connection and a solid plan. Choose the right platform, watch costs, and set clear goals. When discipline is applied, and risks are understood, the vast world of finance can become a valuable ally.