Endowus Fund Smart: now the lowest cost unit trust platform for over 100 funds, with new exploration tools at your fingertips

Last year, we introduced Endowus Fund Smart, which allows our clients to build customisable portfolios with direct access to curated, best-in-class funds from the world’s leading asset managers. This came off the back of a client survey through which we found that clients were looking for more flexible ways to customise satellite investments to complement their core portfolios on the Endowus platform. Our clients wanted a greater selection of geographical and thematic funds, an easier way to navigate the fund selection, and a more affordable solution to access single fund offerings, which do not require other value-added services like rebalancing. The improved Endowus Fund Smart seeks to address these desires and more.

New pricing offers lowest all-in cost and fairest way to invest in over 100 unit trusts

Switching to Endowus could save clients 50% or more per year on their all-in investment costs. All-in costs are now lower on Endowus than any other retail fund platform in Singapore for over 100 of the best-in-class unit trusts offered.

• 0% sales charges, 0% transaction fees = so you don’t lose on day 1, and Endowus is not incentivised to make you repeatedly buy and sell strategies
• 100% trailer fee rebates = so you keep more of your returns, and Endowus is not incentivised to push products that pay higher trailer fee kickbacks. Trailer fees are typically kept by banks, brokers and online fund platforms that sell funds
• Lowered Access Fee of 0.30% p.a. for single fund investments= decreases the all-in cost for everyone to invest in unit trusts with Cash, CPF & SRS

Creating satellite investments alongside our core advised portfolios

Our core advised portfolios such as Core, ESG and Cash Smart serve our clients’ main investment goals - from short-to-long-term, and low-to-high risk. These portfolios are carefully built and maintained by the Endowus Investment Office, and suitable for novice and expert investors alike. You can transparently see the underlying funds and performance of our advised portfolios here.

However, we acknowledge the desire for flexibility and choice. Fund Smart was created to provide a flexible platform on which our clients can purchase single unit trust-s and custom build multi-fund portfolios using best-in-class funds curated by the Endowus Investment Office.

Approximately 15% of our clients now own a single unit trust as a unique investment goal, either because they want to own it as a satellite position to complement their core goals, or because they previously owned the fund elsewhere and want to consolidate their positions with immediate benefits of switching to Endowus.

But first, a heartbreaking true story

A colleague’s mother recently decided to speak to an Endowus MAS-licensed investment advisor to discuss putting some savings into Endowus Cash Smart. During that conversation, we found out that she had just bought a unit trust through her relationship manager at a retail bank. She shared with us how she had paid a full 2% upfront sales charge, which she assumed was normal. The unit trust, being a retail fund, had a 2% annual fund-level fee with an approximate 1% trailer fee embedded. This trailer fee is paid by the fund manager to the bank distributor in the form of a kickback commission.

Our colleague’s mother had no idea this was happening. The trailer fee is embedded within the fund expenses and is taken straight out of the fund’s net asset value (NAV).

With the sales charge her investment was immediately down 2% on day 1. In the first year, the bank gets to collect from both sides - 2% sales charge from the client, and 1% trailer fee paid by the fund manager, or 3% out of 4% of total fees in the first year. The bank will continue to earn a 1% kickback annually from the fund manager for as long as she owns the fund. We have to fundamentally change this for the sake of the human well-being and the industry.

Distributors sometimes play the “churn” game. They recommend switching into a different fund each year, as they attempt to predict market trends, thereby collecting the 2% upfront sales charge again and again. Popular “low cost” fund platforms profit enormously from receiving the trailer fee kickbacks every year even though they position themselves as zero cost or low cost when in fact they are clearly not. This deception is happening to our loved ones and it is time we put an end to it.

No one can guarantee what markets will do in the future, whether this country, sector or fund will outperform. But when we can reduce costs by just 1%, it compounds to a phenomenal 245% improvement in return over 30 years (comparing a 7% and 8% annualised return).

Imagine if our colleague’s mother bought her fund via Endowus - she would save almost 3% in the first year and almost 1% every year thereafter. We are starting with our colleague's mother but hope that Endowus will reach and benefit many.

Rigorously screening unit trusts to focus on the best-in-class

Meeting the needs of our clients through greater fund selection focused on desired themes

As of the end of August 2021, clients can access a total of 130 best-in-class strategies represented by 213 share classes to suit Cash, CPF, SRS, and multi-currency investing goals for both retail and accredited investors.

There are currently over 9,000 registered unit trusts in Singapore. The fund selection process of curation and due diligence is something that only institutional investors or private banks have the capability to do, but not the case for retail investors. An overwhelming assortment of choices often leads to analysis paralysis and inaction, or in many cases, selecting the wrong funds.

Example of the fund due diligence documentation for fund selection

Endowus wants to help clients block out the noise and only invest in best-in-class funds.  

"We provide institutional quality screening and due diligence to select the best-in-class funds in the universe based on a proprietary fund selection framework by the Endowus investment office,"- Wei Mei Tan, Endowus Chief Advisory Officer

We work to improve fund access, launching top-performing strategies that were previously not available to retail investors. We have continued to work with our fund manager partners — leading global and local fund managers to bring their top funds into Singapore.

Standing on the shoulder of giants - working with the leading global fund managers

Continuously reducing cost for everyone. We work with the fund managers to access institutional share class or clean share class funds, which offer lower fees and/or no trailer fees. For those who do still charge trailer fees, we always rebate 100% of the amount back to clients.

So what exactly is an Endowus Fund Smart “Single Fund” Goal?

When you create a Fund Smart Goal, you are able to do so with multiple funds (up to 8) in the portfolio, and decide on the % allocation to each fund. In the past, regardless of whether you created a single fund portfolio, or a multiple fund portfolio, you were charged the same level of fees as the Core advised portfolios (which also consist of multiple funds).

Since our initial launch of Fund Smart, we have received feedback from clients that in the case of a single fund portfolio, many of the usual portfolio features would not be necessary  — a single fund portfolio does not take advantage of the portfolio creation tool, and would not benefit from optimisation and automated rebalancing and is a pared down level of service versus multi-fund goals. In consideration of this feedback, we reduced the cost of single fund goals to a lower, flat Access Fee of 0.30% p.a.

Easier way to find funds by sector, geography or investment mandate

Whether it be for a single or multiple fund portfolio on Fund Smart, in this new experience, we have improved the way funds can be searched for on the platform. Being able to down-select funds based on fund manager, asset class, geography, and fund investment type will help speed up the fund selection process and reduce the number of steps needed to create your goals.

We have also replicated this experience on our Investment Funds List for greater ease of access.

"On top of a greater selection of geographical and thematic funds, we have created an improved fund screening experience and the lowest cost access single fund offerings,” - Samuel Rhee, Endowus Chairman & Chief Investment Officer

Being at the forefront of technology with the support our clients

We want to thank our clients for the feedback and their encouragement as we continue to lead the industry as a fee-only total wealth solution for all sources of wealth. Being at the forefront of the industry means that previous expectations and pricing models have to be challenged. We are appreciative that our clients take the effort to understand the nuances involved, and we want to thank those who have provided feedback on how to improve our offering. Do reach out to us at support@endowus.com if you have any further feedback on the improved Fund Smart solution or any other matter.

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Investment involves risk. Past performance is not necessarily a guide to future performance or returns. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.

Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endow.us Pte. Ltd (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus Pte. Ltd., its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.

Investment into collective investment schemes: Please refer to respective funds’ prospectuses for details of the funds, their related fees, charges and risk factors, The listing of units of the fund on a stock exchange does not guarantee a liquid market for the units. Before making an investment decision, you are reminded to refer to the relevant prospectus for specific risk considerations.

For Cash Smart Secure, Cash Smart Enhanced, Cash Smart Ultra: It is not a bank deposit and not capital guaranteed, and is subject to investment risks, including the possible loss of the principal amount invested. Investment products are not insured products under the provisions of the Deposit Insurance and Policy Owners Protection Schemes Act 2011 of Singapore and are not eligible for deposit insurance coverage under the Deposit Insurance Scheme. Interest rates are indicative and subject to change at any time.

Product Risk Rating: Please note that any product risk rating (the “PRR”) provided by us is an internal rating assigned based on our product risk assessment model, and is for your reference only. The PRR is subject to change from time to time. The PRR does not take into account your individual circumstances, objectives or needs and should not be regarded as advice or recommendation to purchase, hold or sell any fund or make any other investment decisions. Accordingly, you should not solely rely on the PRR in making your investment decision in the relevant Fund.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

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