Flagship CPF Portfolios enhanced with low-cost Amundi passive fixed income fund
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Flagship CPF Portfolios enhanced with low-cost Amundi passive fixed income fund

Updated
19
Sep 2023
published
28
Aug 2023
Endowus Flagship CPF Portfolios enhanced with low-cost Amundi passive fixed income index fund
  • The recommended portfolio change improves the Flagship CPF Portfolios by lowering the investment cost significantly (by 41%) to 0.24% p.a., while improving the diversification and credit quality in its fixed income component.
  • This is achieved by introducing the Amundi Index Global 500m Fund, a low-cost fixed income passive index fund that is exclusive to Endowus. Endowus and Amundi have worked together strategically to bring the fund first to Singapore investors investing their Cash and SRS savings, and now for CPF monies as well.
  • Watch our webinar to learn more about the recommended portfolio change. To start investing your CPF with Endowus, click here.

In our latest recommended portfolio change (RPC), Endowus is including the Amundi Index Global Agg 500m Fund in the fixed income component of the Flagship CPF Portfolios.

These changes, if taken up, will lower the cost of investments for clients, and make the fixed income exposure more globally diversified and of higher credit quality.

The Amundi Index Global Agg 500m Fund is the cheapest fixed income fund available for investment through the CPF Investment Scheme (CPFIS), with a fund-level fee of just 0.1% per annum (p.a.). The fund’s recent inclusion in the CPFIS is a result of Endowus and Amundi’s collaborative efforts to improve investment options for CPF investors.

In April this year, we had performed an RPC to the equity component of the Endowus Flagship CPF Portfolios, making it more balanced and lowering the investment cost. For details on the proposed changes to the equity component, click here

The latest RPC — for the fixed income component of the Flagship CPF Portfolios — is part of Endowus’ continuous commitment to source for funds that will optimise your portfolios. We believe the new Flagship CPF Portfolios stand a better chance of delivering investment success for our clients. 

Clients can choose to accept or reject the recommended changes.

Key improvements to the Endowus Flagship CPF Portfolios

Lower investment cost 

The new portfolio will be 17 basis points (bps) cheaper. This is a significant reduction, of about 41%, in the investment cost, and is expected to improve one’s investment results in the long term.

Endowus Flagship CPF 100% Fixed Income Portfolio

Table: Underlying funds of the Endowus CPF 100% Fixed Income Portfolio, including the Amundi Index Global Agg 500m Fund, Eastspring Singapore Select Bond Fund, Franklin Templeton Western Assets Global Bond Fund, and United SGD Fund. The fund-level fee or TER of the new portfolio is 0.24% p.a. as of 31 July 2023, down 41% or 17bps from the current portfolio.

More globally diversified

The inclusion of the Amundi Index Global Agg 500m Fund, together with the reduction of Asian-centric funds, will meaningfully reduce home bias and improve the geographical diversification of the portfolio.

Pie charts: Geographical allocations of the current and new Flagship CPF 100% Fixed Income Portfolios, across Asia, Europe, America, and other regions. As of 30 June 2023.

Higher credit quality 

The new portfolio will also have a higher credit quality than before, reducing the overall credit risk taken by the portfolio without much compromise on return. 

Bar chart: Credit rating allocations of the current and new Flagship CPF 100% Fixed Income Portfolios, across AAA, AA, A, BBB, and below BBB. As of 30 June 2023.

Continues to be sectorally diversified 

The new portfolio continues to be sectorally diversified. The differences in sectoral allocation between the current and new portfolios is a reflection of the improvements in terms of geographical diversification and credit quality.

Pie charts: Fixed income sectors of the current and new Flagship CPF 100% Fixed Income Portfolios. Across government / govt-related, investment grade credit, emerging markets (EM) bonds, and securitised. As of 30 June 2023.

Long-term performance comparison 

The latest RPC to the fixed income component, combined with the earlier RPC for the equity component, offers a holistic upgrade to the overall Endowus Flagship CPF Portfolios.

The charts below plot the 10-year return to risk for the:

  1. Flagship CPF 100% Fixed Income Portfolio before and after this upgrade 
  2. Flagship CPF 60-40 Equity-Fixed Income Portfolio before and after the upgrades to both components
Charts: Aiming for improved long-term risk-adjusted return with each upgrade. The charts show the 10-year return-risk of the Flagship CPF 100% Fixed Income and 60-40 Equity-Fixed Income Portfolios, as of 30 July 2023.
Source: Endowus Research. As of 31 July 2023. Monthly rebalancing assumed. In Singapore dollars (SGD). Based on Endowus representative historical data. A full disclosure of the methodology can be found here.


The new Flagship CPF 100% Fixed Income Portfolio will have a risk level closer to the benchmark than the previous version. This means it will be able to capture the fixed income market return better throughout a full market cycle. 

The new Flagship CPF 100% Fixed Income Portfolio currently has a forward-looking yield to maturity of 4% and a duration above 6 years. The fixed income market’s drawdown in 2022 — due to the rapid change in the interest rate environment — has improved the outlook and forward-looking return for the asset class. In the event that interest rates start to come down, longer-duration fixed income assets will also stand to benefit from price appreciation. 

Portfolio characteristics 

Portfolio characteristic Current 100% Fixed Income Portfolio New 100% Fixed Income Portfolio Bloomberg Global Aggregate Bond Index
Yield to maturity 4.3% 4.0% 3.7%
Effective duration (years) 5.6 6.3 6.7

Source: Endowus Research, fund factsheets. As of 30 June 2023.

Most of our CPF investors will have exposure to a combination of equities and fixed income in their Flagship CPF portfolios as a function of higher risk tolerance to maximise long-term wealth accumulation. 

We believe that with the recommended changes for both the fixed income and equity components, the new Flagship CPF portfolios stand a higher chance of delivering better risk-adjusted returns. While historical return is not representative of future return, backtested to 10 years ago, the new 60-40 Flagship CPF Portfolio would have delivered higher return per unit of risk. 

For a more detailed historical return and risk comparison, please refer to the Appendix below.

Our philosophy for better investing 

At Endowus, we believe in a long-term approach to investing. We use our Strategic and Passive Asset Allocation (SPAA) framework to guide our recommended portfolio changes. Rather than trying to beat the market by making tactical shifts, we focus on enhancing our advised portfolios through improving long-term asset allocation and fund selection. For more on our SPAA framework, please refer to the Appendix below.

The Endowus Flagship Portfolios’ goal is to provide low-cost, globally diversified exposure to the equity and fixed income markets, with the allocations weighted differently to suit different investors' risk tolerance levels. 

Watch our webinar to learn more about the Amundi Index Global 500m Fund and its proposed inclusion in the fixed income component of the Flagship CPF Portfolios.

A guide to accepting the recommended portfolio change

When the RPC is initiated, you can opt for the change via either one of these methods:

  • Click on the Login button directly from the RPC email you would have received.
  • Click on the notification bell on the Dashboard.
  • Alternatively, click on the relevant page under the My Goals section, then select “View the Recommended Portfolio Change” under Goal Settings.
Screenshot of Endowus user's dashboard - how to accept the recommended portfolio change

The platform will take you through a comparison of the existing portfolio allocation and the updated portfolio allocation.

Choose to accept or reject the recommendation. If you reject the recommendation but subsequently change your mind, you can always come back to modify your choice via the Goal Settings button.

Once the recommendation is accepted, the portfolio will be rebalanced. The units of the old share class or classes will be sold. Proceeds from the redemption will then be used to buy units in the updated share class or classes.

As a value-added service from Endowus, we will also take the opportunity to rebalance your portfolio in a holistic way, back to its target asset allocation. This will be done even if the usual 15% deviation threshold is not breached.

Clients may also accept the RPC by clicking on the Login button from the RPC alert email.

The entire process will take about 5 to 10 business days to complete. You may continue to invest in and partially redeem funds from the portfolio during rebalancing. However, a full redemption cannot be performed until the rebalancing process is completed.

Enjoy lower fees, stronger long-term gains with Endowus

The Endowus Investment Office is constantly monitoring your advised portfolios and searching for new options that will improve these portfolios. Opt in for the recommended portfolio change today to upgrade your CPF Flagship Portfolios. 

Appendix

Have more questions? The Endowus Investment Office is here to guide you through them.

Detailed historical performance comparison 

Historical performance and risk for Flagship CPF 100% Fixed Income 

Current 100% Fixed Income Portfolio New 100% Fixed Income Portfolio Bloomberg Global Aggregate Bond Index
2023 YTD 2.0% 2.2% 2.4%
2022 -9.8% -10.7% -11.5%
2021 -2.1% -1.8% -1.3%
2020 6.7% 6.2% 5.4%
2019 6.2% 7.2% 7.7%
2018 0.1% 0.7% 1.1%
3 Year -3.0% -3.3% -3.5%
5 Year 0.6% 0.7% 0.6%
7 Year 0.4% 0.5% 0.4%
10 Year 1.7% 1.8% 2.0%
15 Year 2.2% 2.5% 2.9%
3 year vol 3.8% 4.2% 4.8%
5 year vol 3.6% 4.0% 4.5%
10 year vol 3.0% 3.3% 3.6%

Source: Endowus Research. As of 31 July 2023. Note: Monthly rebalancing assumed. In Singapore dollars (SGD). Based on Endowus representative historical data. A full disclosure of the methodology can be found here.

Historical performance and risk for Flagship CPF 60-40 Fixed Income

Flagship CPF 60/40 Portfolio - Old Flagship CPF 60/40 Portfolio - New 60-40 MSCI ACWI - Bloomberg Glb Agg Index
2023 YTD 9.7% 10.6% 11.0%
2022 -15.2% -15.8% -15.8%
2021 10.0% 10.4% 11.6%
2020 12.5% 13.0% 11.2%
2019 17.5% 18.7% 17.9%
2018 -3.7% -3.7% -4.0%
3 Year 3.7% 3.9% 4.1%
5 Year 4.9% 5.3% 5.0%
7 Year 6.1% 6.4% 6.1%
10 Year 6.4% 6.6% 6.4%
15 Year 5.5% 5.8% 5.5%
3 year vol 8.9% 9.4% 9.7%
5 year vol 9.4% 9.8% 9.9%
10 year vol 7.4% 7.7% 7.8%

Source: Endowus Research. As of 31 July 2023. Note: Monthly rebalancing assumed. In Singapore dollars (SGD). The Flagship CPF 60/40 Portfolio - Old represents the portfolio mix of 60% equity and 40% fixed income before the recommended portfolio changes to both the equity and fixed income components. Based on Endowus representative historical data. A full disclosure of the methodology can be found here.

What is Endowus' Strategic and Passive Asset Allocation framework?

Endowus takes an evidence-based approach to investing for the highest probability of success, which brings together strategic passive asset allocation and global diversification, expressed through best-in-class funds, at a low cost. We use these building blocks to design portfolios customised to your goals and preferences.

Endowus’ Strategic Passive Asset Allocation (SPAA) framework is:

  • Strategic top-down, meaning the allocation to different asset classes such as equities, fixed income, geography, style or factors, are set based on the goal of the portfolio 
  • Passive in implementation, meaning Endowus does not believe in tactically or actively changing your allocations based on market conditions or economic indicators
  • Curation of portfolio design bottom-up, meaning Endowus carefully selects best-in-class funds to best represent your goal’s SPAA. We access leading global fund managers with the expertise, scale, and a low-cost structure. They have real, proven track records in implementing their strategies with tens and hundreds of billions of assets successfully over time. These strategies can be passive, systematic or active, depending on the asset class they try to represent, and the investment objective. 

You may read more about our SPAA framework here.

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Endowus Flagship CPF Portfolios enhanced with low-cost Amundi passive fixed income index fund

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