How are the funds selected by Endowus?

We place paramount importance on selecting the best fund managers to partner with, and have leveraged data and technology to build a rigorous framework for manager and product due diligence. The fund selection and due diligence are done by our Investment Office team, led by our Chief Investment Officer. As we do not take trailer fees from the investment products on our platform (unlike most banks, brokers, advisors, and other online fund platforms too!), we can always act in your best interest. Our goal is to access the best products at the lowest cost possible, so all of us can build the best portfolios.

We work closely in partnership with major global fund managers to bring you the best products to build your portfolios. We apply a high bar to find the best-curated funds across asset classes, geographies, sectors, themes and factors. Quantitative screens and qualitative assessments are applied to find funds that have outperformed their peer group and benchmarks over various periods of time, and have demonstrated good risk management practice. For example, we assess and weigh a fund’s performance consistency, volatility and downside risk relative to their peer group and benchmarks, amongst many other factors that we also consider. Generally, we would require a track record of at least three years, but we would also consider reputable fund managers who have run similar strategies in the past. The size of the fund on which the track record was based, tax and currency efficiency for Singapore-based investors is important as well.

We also focus on fees as they have a significant effect on long-term returns. To achieve this, we screen for funds with lower expense ratios. Additionally, we look for efficient trading and implementation and avoid excessive portfolio turnovers as trading costs contribute to the expense ratio of the fund that investors would ultimately bear.

If the fund passes our quantitative screens, we will look to better understand the fund’s investment process, team structure, portfolio implementation and risk control policies. Some of the factors we look at include how the fund breaks down its investment process, the background and experience of the investment team, and the fund’s risk management strategy.