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POTENTIAL GAINS FROM BEING CPF INVESTED WITH ENDOWUS
Investing your CPF with Endowus can be done entirely online. As the first and only CPF digital advisor, and we have partnered with UOB and UOB Kay Hian to make this possible.
Just create your account and we will guide you through the process.
At Endowus, we believe in investing for the best chance of success -- this means keeping costs low, being diversified across geographies and sectors, and investing at a risk tolerance suitable for you.
CPF investing is for the long-term, and your Endowus investment portfolio has a high probability of performing better than the 2.5% interest rate of your CPF OA investible balance over the long-term. Based on the historical returns of markets, we project the long-term annualised returns of the Endowus portfolios to range from 3 to 9% depending on your selected portfolio and risk tolerance.
Read more: Why investing your CPF is important.
You can invest all of the balance of your CPF OA savings after setting aside the first S$20,000. This is your OA investible balance, and up to 100% of it can be invested in our portfolios of unit trusts via the Endowus platform.
The Endowus CPF portfolios consist of exposure to best-in-class SGD-denominated stock and bond funds that are CPFIS included. Our advised allocation to the funds will depend on your risk appetite, which we will ask about in our questionnaire before we create your personalized portfolio.
We aim to minimise your risk by diversifying your investment, investing in the stocks of companies across the US, developed markets, Asia and emerging markets through professionally managed funds.
Infinity US 500 Stock Index Fund
This is a low-cost, passive fund that invests in the popular S&P 500 index. As of Jan 2020 Endowus is the only platform that can access this fund for CPF investment.
Infinity Global Stock Index Fund
This is a low-cost passive fund that tracks the MSCI World Free Index (global developed market equities). As of Apr 2020 Endowus is the only platform that can access this fund for CPF investment.
First State Dividend Advantage
This is a best-in-class Asia-ex Japan fund invests primarily in high quality, higher dividend yield companies.
Schroder Global Emerging Market Opps Fund
This is a best-in-class emerging market fund is diversified across emerging markets worldwide.
The bond portfolio consists of a diversified portfolio of high-quality Singapore dollar hedged bond funds with global exposure to sovereign and corporate debt.
Legg Mason WA Global Bond Trust
This fund invests in high-quality debt securities of governments and government-linked companies in Singapore and other major global economies.
UOB United SGD
This fund invests in highly liquid money market and short term interest-bearing debt instruments and bank deposits.
Eastspring INV UT Singapore Select Bd Fund
This fund aims to maximise total return by investing primarily in SGD-denominated debt securities, including Singapore government, quasi-government and regional Asian credit.
You pay an Access Fee to Endowus, which includes access to the underlying products used, investment advice, portfolio creation and rebalancing, brokerage, and transfers. For CPF investing, this all-in transparent fee is 0.40% per annum including GST.
Explaining fund-level fees
In the finance industry, a fund-level fee is charged by fund manager. Known as the expense ratio, this is the cost of operating a fund, and is taken out of the fund’s net asset value (NAV). These costs include investment management fees, trustee fees, and audit fees, and are usually passed on to investors - in this case, you.
At Endowus we work with fund managers to bring this fee down as low as possible, rebating any trailer fees we may receive. The fund-level fees of our CPF portfolios after trailer rebates range from 0.47% to 0.78% per annum, versus the Singapore industry average of 1.75%.
Explaining 100% trailer fee rebates
Trailer fees are paid by fund managers to distributors (i.e. your broker/financial advisor), in this case, Endowus. The distribution commission is paid continuously as long as an investor holds the funds and usually ranges between 0.5% - 1% per annum, or greater than 50% of the fund-level fees. This potentially leads to misalignment in incentives between an investor and distributor, and higher fund-level fees. We don’t believe in this practice so we rebate 100% of what we receive to you.
Endowus wants to stay completely independent and only paid by you, so we can be completely focused on sourcing and building the best portfolios for you.
No, your investment proceeds will be returned to your CPF account so your money is ready for you later in life.