Endowus is one of the many robo-advisor available in Singapore. However, as of writing, they are the only one where you can invest your CPF with. This post will focus on the Fund Smart platform using CPF OA, as that is the one that I’m currently using.
Basic Summary
- Endowus All in Access Fee at 0.4% flat fee for any CPF & SRS amount
- Min $10,000 to start. (They are running a promotion this Feb 2021, when you can start investing from $888)
- Fund Smart Platform that allows you to customized your own portfolio
Why did I choose Endowus?
I wanted to invest in a low cost passive index ETF. But of course, we all know that is not possible in Singapore with our CPF funds. So the next alternative is unit trusts that feeds into an index fund.
Endowus has exclusive access to Lion Global Infinity Global Stock Index Fund and Lion Global Infinity US 500 Stock Index Fund for CPFIS.
Lion Global Infinity Global Stock Index Fund is a feeder fund into the Vanguard’s Global Stock Index Fund that tracks the MSCI World Index.
Lion Global Infinity US 500 Stock Index Fund is a feeder fund into the Vanguard’s US 500 Stock Index Fund that tracks the S&P 500 Index.
And with the Fund Smart Platform, I can do my own customized platform instead of using their selection of portfolios.
Endowus rebates the trailer fees back to their investors.
Let’s see how this works with the Lion Global Infinity US 500 Stock Index Fund:
Fund Level Fees: 0.675%
Trailer Fee Rebate: 0.275%
Total Fund Fee: 0.675% – 0.275% = 0.4%
Total Annual Fee including Endowus Access Fee: 0.4% + 0.4% (flat rate for CPF) = 0.8%
Fees for Equity Funds For CPF
Both Lion Global Infinity Global Stock Index Fund and Lion Global Infinity US 500 Stock Index Fund has the lowest fee at 0.86% and 0.8% respectively. For every $10,000 invested, you are paying $86 and $80 per year in fees.
Nothing to shout about if you compare these fees to a iShares MSCI World index ETF (0.24%) or Vanguard S&P 500 ETF (0.03%).
However, these are the best options available if you want to invest in a passive index fund using your CPF.
You can find out more on how expense ratio affect investment returns here.
Fees for Fixed Income and Multi Asset Funds FOR CPF
Personally, I don’t invest in bond funds using my CPF OA. If I wanted a bond allocation, I would do it by leaving money in my CPF OA to earn a risk free interest of 2.5% per year at no fees.
Sign up Process
Everything is done online with MyInfo onboarding. Because I already have a CPFIS Investment account, my account was up and running in less than a week.
If you do not fulfil any criteria set for the Client Knowledge Assessment, you’ll have to take an e-learning course and assessment. It took me 15 mins complete this. And then you just have to upload the e-certificate to your Endowus account.
Portfolio Creation
With Fund Smart, you have the option add up to 8 funds to create your own portfolio from the list available funds.
Once you confirm your funds and allocation, you cannot make changes to it.
I made this mistake. I allocated 100% to Lion Global Infinity US 500 Stock Index Fund. So when I wanted to add another fund to this portfolio, there’s no way for me to do it, unless I sell off the funds and recreate another portfolio.
I would say that’s a lucky mistake. I stuck to the portfolio because I didn’t want to sell and buy again, and now I’m at 10% gain.
My Endowus portfolio over time: 1-year and 2-year updates
1 year on (November 2021)
I started out investing $10,000 of my CPF in OA. I’ve since done additional lump sum contributions throughout the past year. If you DCA (dollar cost averaging) monthly via CPF, there is I think a $2 cost per transaction. So if you are looking to DCA your investment, this is something to note.
My portfolio is up by 21.70% at time of writing.
If I have invested $10,000, I would be in profit of ~$2,000. If I had left this $10,000 in your OA to earn the 2.5%, I would have only earned $250 worth of interest. $2000 vs $250, that is a significant difference!
2 years on (November 2022)
I started using Endowus in Oct 2020. When I started investing in S&P500, it looked like I was investing when the market is at a all time high period.
Along the way, I continued to do lump sum investments in Jan, Mar and Jul of 2021. And we all know that market went into another all time high in 2021. So basically I was buying all the way at the market high.
Then in 2022, we all know that market started dumping. I still continued to do additional lump sum investing whenever I have additional money in my CPF. I didn’t time the market.
My portfolio is still up 2.05% at time of writing. Unfortunately, I didn’t beat the CPF OA interest of 2.5%.
Last year, when I wrote the 1 year review, I was up 21.05%.
This just goes to show that, when investing in equity market, you need to be able to stomach these type of volatility. And S&P500 is a broad market index. Imagine if you are investing into thematic ETFs or even the FAANG stocks, you will face volatility worse than this. When investing, you should always have a long term horizon.
I’m just going to continue to DCA every time I have some additional money in my OA regardless of market ups or down. Simply because I always believe the best time to buy stocks was 10 years ago, and the next best time to start is NOW. You can find out more in Should You Invest In The Stock Market Now or Wait?
And S&P500 historically has returned at least 10% in the last 10 years. And 9.35% since inception.
Since I can’t withdraw CPF until 55, I have all the time in the world to let this investment grow. (unless you are in your 50s). And eventually, I should beat the CPF 2.5% interest in the long run.
Summary
Pros:
- Access to Lion Global Infinity Global Stock Index Fund and Lion Global Infinity US 500 Stock Index Fund for CPFIS.
- Trailer fee rebates
Cons:
- Min $10,000 to start
For CPF investment, this is something I’ll recommend especially if you are looking to buy into passively managed MSCI World Index and the S&P 500 Index funds.
For cash investments, I would prefer to buy ETFs directly or go with other robo advisor where you have access to ETFs rather than unit trust. Simply because even after rebating the trailer fees, it still is expensive, when you add the Endowus fee to it, compared to buying a ETF.
Lastly, if you are interest in opening an account with Endowus, you can do it via this referral link. Both of us will each get $20 in Access Fee credit (equivalent to $10,000 advised free, assuming Access Fee of 0.40%).
