One of the more popular options for investing our CPF Ordinary Account (CPF OA) is to top up our CPF Special Account (CPF SA) to get a 4% return, or to invest in the STI ETFs through CPF Investment Scheme (CPFIS) for diversification.
As someone who was working in a Temasek Linked Company, with a significant portion of my salary in variable bonus, I didn't want to have more exposure to the Singapore market. I looked for options to invest my CPF OA funds for global stock exchange exposure and was disappointed with the options that were available.
Also, the cost involving unit trust investments for CPFIS is complicated. The greater I read, the more confused I recieve. Upfront sales charges and/or trade costs, platform fees, wrap fees; perhaps it is best for me to just put it into to CPF SA and obtain it over and done with?
The way Endowus prices its fees is much simpler. All we need to know is that we are paying a 0.4% wrap fee to Endowus. This is an all-in fee that Endowus charges. At the fund level, which is the fees the funds charge, it is net 0.58% for any balanced 60:40 equity bond portfolio. Trailer fees, that are fees usually paid to distributors through the fund managers, are fully rebated back to us.
With Endowus, people who want to diversify from the Singapore market have a simple, transparent and cost-effective option. You can see the chart below on how Endowus has reduced the costs of investing in unit trusts for CPFIS.
Even so, is the fact that all the charges that we have to bear? We still have to pay agent bank charges for that investment and management of the funds.
Endowus is working with an approved CPF Investment Administrator, UOB Kayhian, for greater cost efficiency and therefore lower agent bank charges. For the same $10,000 investment made into the 7 funds curated by Endowus, there will be a saving of $63.50. For me, that is almost 3 months' price of weekly Fillet-o-fish Extra Value Meal!
| Transaction Type | Example | Through Non-IA Distribution Channel | Through Endowus |
| Purchase of Units | $10,000 investment into 7 funds | One-off charge: As much as $2.50 per fund Total charges: $17.50 |
One-off charge: $2 per portfolio of funds Total charges: $2 |
| Account Maintenance | Holding funds for a year | Quarterly charges: Up to $2 per holding Annual charges: $56 |
Quarterly charges: $2 for the portfolio Annual charges: $8 |
| Total Agent Bank Charges | $73.50 | $10 |
Note: Dollar values are excluding GST. Different Agent Banks have different charges, from $2 per 1,000 units to some maximum of $20 per transaction, to $2.5 per 1,000 units to some maximum of $25. The example above considers $2.50 per 1,000 units to a maximum of $25 per transaction Information is correct as of 28 Nov 19
For example, when we were to switch our risk profile which results in a purchase in equity funds along with a sale in bond funds, there won't be any agent bank charges with the Endowus setup.
At Endowus, we pride ourselves for structuring investment solutions right so that our customers do not spend unnecessary cost and obtain the best possible returns. The total cost of investing in diversified funds for our retirement should be similar to what we can do with this cash account.
To be fully transparent, I have invested half of my CPF investable sum with Endowus and am looking to invest the rest by the end of March 2021 to increase my investment horizon like a young working adult. Spreading my investments out help me manage my emotions better and gain confidence within my investing decisions. You can find out more about Endowus.
Invest Better With Endowus
If you’re interested to start investing with Endowus, you’ll gladly know that DollarsAndSense readers can have their first $10,000 managed for free for 6 months, which means savings of $20 in fees. Sign-up using this link to claim this special offer. Terms & Conditions apply.
