4 in 5 Singapore respondents plan to invest more amid strong concerns over inflation and rising costs: Endowus Wealth Insights 2022

Endowus, Singapore’s leading digital wealth platform, today launched the Endowus Wealth Insights. The three-part report breaks down investment trends and insights derived from a study of 680 Singapore respondents from five age brackets (below 29, 30-39, 40-54, 55-64, 65 and above). The report also provides an update on the firm’s overall performance across all investment portfolios in 2021, as well as its business strategy and views on the general investment outlook for 2022.

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The study, which concluded in February 2022, focused on the following themes: financial-related concerns and goals for 2022, investing behaviours and sentiments, as well as the adoption of offline and online investment platforms and services. 

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Singapore respondents are worried about rising costs but plan to stay invested 

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One key finding noted that a large majority (79%) of Singapore respondents are planning to invest more amid growing concerns over global inflation and volatility in the markets. 19% of Singapore respondents noted that they will be keeping to their current level of investments, with less than 2% indicating that they will be investing less.

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Observing a similar trend of consumers planning to stay invested in 2022, there is a 19% increase in the total number of funded clients on the Endowus platform in the first quarter of 2022. It is worthy to note that the gender gap is closing with females now accounting for 39% of all clients on the platform. Additionally, it is observed that the younger the lifestage of Endowus’ clients, the higher the level of female representation. 

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In terms of funding source, cash remains the dominant source on the Endowus platform. However, the percentage of clients investing either or both of their CPF and SRS monies has risen to over 65% of the Endowus client base. This suggests stronger awareness and active adoption of government-approved CPF and SRS investment schemes. 

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When asked about their top financial-related concern for 2022, a majority of respondents (45%) indicated inflation, while 27% were worried about retirement adequacy. 12% of Singapore respondents also indicated that the pandemic’s impact on job security and salary was their top concern. Unlike all other age categories, for respondents aged below 29, the impending GST increase (58%) and rising property costs (13%) were cited as their top concern.  

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Rising popularity of digital investment platforms

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Digital investment platforms are popular among respondents, with 90% of them currently using digital wealth platforms and robo-advisors. 74% of them are currently using online brokerages while 28% of respondents are using crypto trading platforms. Comparatively, only 1 in 5 respondents are tapping the services of traditional financial advisors, while 1 in 4 noted that they are using the investment services offered by banking institutions and traditional brokerages.

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Among respondents who are currently not on any digital investment platform, an overwhelming 92% of respondents noted that they plan to start using them in 2022. By contrast, investors may be showing less interest in offline providers — among respondents who are currently using the services of banking institutions and traditional brokerages, more than half indicated that they plan to stop using these services this year.

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When selecting an investment platform or provider to use, more than half (69%) indicated that the credibility of the platform or provider is the most important factor, followed by cost and fees (13%), and projected returns (10%). 

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“We are finally seeing the light at the end of the tunnel after more than two years of continual adjustments to the changing pandemic environment. However, as borders reopen and endemic living ensues, we are facing a new set of challenges with stagnating economies and rising inflation. Sharing similar sentiments as the majority of respondents in our study, many of Endowus’ clients have expressed concerns over the rising cost of living and recent market volatility. However, as historical data has shown, continuing to stay invested during times of uncertainties is a time-tested and successful course of action for long-term investors. We believe that this is the best way for everyone to ensure that they can achieve retirement adequacy in the long run,” said Samuel Rhee, Chairman and Chief Investment Officer of Endowus.

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Endowus portfolio performance

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Endowus Core Flagship Cash/SRS 100% equities portfolio ended 2021 with a 22.3% return, outperforming the MSCI All Country World Index that tracks global developed and emerging market stocks. Endowus Core Flagship CPF 100% equities portfolio, which can be seamlessly invested online with one’s CPF Ordinary Account (CPF OA), returned 17%.

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In 2022, we are witnessing an increase in market volatility and persistent concerns about the macroeconomic environment. With Russia’s invasion of Ukraine in late February, volatility spiked further to a 12-month high in March. Despite this, the key portfolios that are strategic passive asset allocations constructed by the Endowus Investment Office have continued to show resilience when compared to benchmark indices in the first quarter of 2022.

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Endowus was founded to bring institutional quality wealth management to the individual, to empower people to live easier today and be better prepared for the future. Endowus does this by providing expert financial advice and access to best-in-class investment solutions at a low and fair fee. With no sales charges and 100% trailer fee cashback, Endowus has returned more than S$2 million in trailer fees to its clients in 2021. 

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Emphasising an all-in-one fee model, Endowus is committed to driving performance across all offerings in an unbiased manner by not taking on hidden commissions or incentives, and only transparently charging its clients directly. 

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“2021 was a good performing year for Endowus and our clients. Despite the volatile conditions of markets this year, we remain steadfast in our evidence-based investment philosophy, and on our mission to democratise high-quality investing. From day one, we have been fighting for fairer and more transparent fees for our clients, so it is particularly gratifying that we were able to return more than $2 million of trailer fees to them. We hope this action will encourage other industry players to put the client first, which will lead to better outcomes for everyone. In the wealth management space, the credibility of providers is important to consumers, as further corroborated by the findings from our recent study. We are thus incredibly honoured that our clients have entrusted us with more than $1.5 billion in assets. We will continue to stay committed to supporting more people in acquiring deeper financial knowledge, while supporting them in reaching their wealth goals effectively and effortlessly,” said Gregory Van, Chief Executive Officer of Endowus. 

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