With access to leading fund managers globally, Endowus allows the everyday investor to grow CPF, cash and SRS at a low cost. Here’s what Endowus has to offer amidst the competitive investment landscape.
What is Endowus?
Endowus is a Singapore-based financial technology company that allows you to invest your CPF, Supplementary Retirement Scheme (SRS) money, and cash savings. With access to funds from leading global fund managers, Endowus curates your investment portfolio with institutional-quality financial products, at the lowest cost possible.
Here’s what you’ll find in this review:
- Pros and cons of using Endowus
- How does investing with Endowus work
- Why choose Endowus as your robo-advisor
- Who should use Endowus
- Charges and fees involved
- Endowus vs StashAway vs Syfe vs MoneyOwl
- Eligibility criteria
- Current sign up promotions for Endowus
Overview of Endowus
- What you are investing in: Mutual funds/unit trusts
- Minimum investment amount: $10,000
- Types of funds Endowus offers: Funds from reputable fund managers such as Dimensional Fund Advisors and PIMCO. Full list of funds here.
- Management fee: 0.60% for first $200,000 or 0.40% flat fee for any amount for CPF or SRS money
- Endowus Cash Smart projected returns after all fees:
- Core: 0.9% to 1% p.a.
- Enhanced: 1.5% to 1.7% p.a.
- What can you invest? Cash, CPF and SRS
Here are the pros and cons of using Endowus for your investment needs.
|Pros of investing with Endowus||Cons of investing with Endowus|
|Access funds from respectable fund managers otherwise only available to institutional investors||$10,000 starting amount required|
|Invest not just cash, but also your CPF and SRS money||Must be 21 years old to open an Endowus account|
|Low, all-in access fee that is 1/3 of the industry average||Large investment amounts required to enjoy even lower fees|
|Cash management account available to store (and grow) your spare cash|
How does investing with Endowus work?
Providing wealth accumulation solutions
With Endowus, you can choose from six different portfolios to invest your cash, CPF and SRS money, depending on your investment objectives and risk tolerance. Your funds will go into a portfolio that is globally diversified, offering the best-in-class mutual funds (also known as unit trusts) from leading fund managers globally, without spending any more than you should on fees (more below).
The portfolios you’ll be choosing from are broken down into a percentage of stocks versus bonds.
Your investments come with automated rebalancing to ensure that your portfolio is aligned to your goals. You will also receive investment advice, and you have an option to set up recurring monthly investments. The cost of these transactions is factored into a single, all-in access fee.
Invest your way, with Endowus Fund Smart
Endowus has recently introduced Fund Smart to the mix. With Fund Smart, you can now build and personalise your own portfolio, a solution that was sorely missing in the robo-advisory field.
With Fund Smart, you get exclusive access to best-in-class institutional funds from the world’s top asset managers to make up your portfolio. This means that Endowus has done the heavy lifting by screening out the best funds available for that asset class or category. Much like the existing Endowus offerings, you also enjoy no sales fees, no transaction fees and 100% trailer fee rebates.
You do the rest. Select the funds that make up your portfolio and customise your fund allocations. Currently, you can select up to 8 funds, choosing between equity, fixed income and multi-asset funds. Here’s the list of funds that are available for your selection with Endowus Fund Smart.
You’re not all on your own when creating the portfolio. Upon selecting your funds, Endowus will provide you with an overview that includes your average annual return based on historical data, goal projection and total annual fee.
Do keep in mind that investing with Endowus requires a minimum initial investment amount of $10,000.
#2: Cash management accounts: Grow idle cash
Endowus also offers a cash management account — Cash Smart. Cash management accounts are an alternative to savings accounts, helping you grow your idle funds.
Unlike many high-yield savings accounts that require you to fulfill certain criteria to earn your interest, you can grow your money simply by keeping the money in your Cash Smart account. There is no lock-in period, no tiers to hit, no limit to the amount you can keep in the account and your interest returns are accrued daily.
The cost? 0.05% per year (excluding fund-level fees).
The Endowus Cash Smart account is available not only for your cash, but also for your idle SRS funds. Here are the two different Cash Smart accounts available.
Endowus Cash Smart Core:
- What is it: A diversified portfolio of cash and money market funds
- Underlying funds: 50% Fullerton SGD Cash Fund, 50% LionGlobal SGD Enhanced Liquidity
- Projected return after all fees: 0.9% to 1% p.a.
Endowus Cash Smart Enhanced:
- What is it: A diversified portfolio of money market and high quality short duration bond funds
- Underlying funds: 50% UOB United SGD Fund, 50% LionGlobal SGD Enhanced Liquidity
- Projected return after all fees: 1.5% to 1.7% p.a.
Why should you choose Endowus as your Robo-Advisor?
#1: Access leading global funds at the lowest cost possible
Endowus opens the doors for retail investors to invest in funds that are typically only available for institutional investors.
With access to the funds from these fund managers, Endowus uses evidence-based investing to give investors the highest probability of investment success over the long-term. This means selecting the investment products that have exhibited good long-term performance with proven track records, that are also offered at attractive institutional-level costs.
#2: Invest your CPF, SRS and cash in a single platform
You can invest your CPF money with Endowus under the CPF Investment Scheme (CPFIS). To do so, you will need to open a CPF Investment Account. Once your CPF-IA is linked to your Endowus account, you can start investing and fund your Endowus investments with your CPF accounts.
While the money in your CPF Special Account (SA) earns a solid 4% p.a. interest, the money in your CPF Ordinary Account (OA) earns a modest 2.5% p.a. There is also an extra 1% you earn on the first $60,000 of combined CPF balances, capped at $20,000 for the CPF OA. While a 2.5% p.a. interest rate isn’t too shabby, there are investors who will feel like they can do much better by investing their retirement savings — specifically, by investing with the Supplementary Retirement Scheme (SRS) or CPF OA.
Through Endowus, your SRS or CPF OA funds can access a globally diversified portfolio at some of the lowest costs for CPF-related investments.
#3: Low, all-in access fee
Fees are amongst the top concerns when making investments. The reason is simple: fees eat into your returns. The less fees you pay, the more returns in your pocket. For example, if your fees add up to 3%, in order to earn a 7% return on your investments, the investments would have to reap 10% in returns before fees.
Your returns would depend on other factors as well, such as your risk appetite, which determines the makeup of your portfolio. Not all portfolios are primed for high returns as risk-averse investors could choose to take on lower risk for modest returns.
Rather than paying multiple different fees at different levels, Endowus employs a simple, all-in fee that covers all the costs involved. The only fee that isn’t included in the all-in access fee is the fund-level fee of 0.18% to 0.64% p.a.
#4: Grow your spare cash
With the present low interest rate environment, numerous banks have slashed the interest rates for their savings accounts. This means fewer avenues to grow your spare cash or emergency funds. With their Cash Smart account, Endowus provides the opportunity to earn up to 1.7% p.a. on your idle cash, without bothering with criteria like minimum credit card spending or salary credit. You even have the option to choose between two different Cash Smart accounts depending on your risk tolerance and how soon you’ll need these savings.
#5: Curate your own investment portfolio
With their latest investment solution — Endowus Fund Smart, Endowus gives investors the opportunity to design their ideal investment portfolio with the click of a few buttons. Similar to the Endowus advised portfolios, you can invest your cash, CPF or SRS funds with Fund Smart. Investors looking for a robo-advisory option that allows you to customise the components of the portfolio and each individual allocation will find Fund Smart useful.
#6: It’s secure
What if the company ceases to exist? One major concern many investors have when it comes to new-age robo-advisors is the security and safety of keeping money with the robo-advisory company.
When you create an Endowus account, Endowus creates a trust account in your own name at UOB Kay Hian, Singapore’s largest broker. This means that regardless of what happens to Endowus in the future, you will have full access and claim to your assets that are held in the UOB Kay Hian account under your name.
For whom is Endowus best for?
Endowus is best for investors looking to invest and maximise their ‘locked money’ – namely CPF funds. Where Endowus stands out is also their commitment in offering the lowest fee possible for institutional level funds.
Unlike other robo-advisors that allow you to start investing with just $1, Endowus is suitable for those with sizeable capital, with a $10,000 minimum investment amount.
However, this minimum investment amount can be made using different modes of funding across cash, CPF and SRS. For example, you can invest $5,000 through cash and $5,000 with your CPF OA in order to make up the $10,000 minimum.
Your subsequent investment amounts beyond the first $10,000 are set at a minimum of $100. The minimum for a new goal or transaction for Fund Smart is also $100, with no minimum balance required.
What charges or fees should you look out for?
Endowus works with asset managers to access the lowest fees possible, ensuring that customers get 100% rebate of any trailer fees or sales commissions. As such, Endowus charges a single, all-in access fee that is based on your assets under advice (AUA), inclusive of GST. The more you invest, the lower the fees.
|Investment type||Fee details|
|CPF and SRS money||0.40% flat fee for any amount|
|Cash (tiered, not stacked)||Up to $200,000: 0.60%|
$200,000 – $1,000,000: 0.50%
$1,000,001 to $5,000,000: 0.35%
More than $5 million: 0.25%
|Cash Smart||0.05% flat fee for any amount|
However, do note that these fees exclude fund-level fees of 0.18% to 0.64%. These fund level fees are built into the cost structure of the fund and indirectly affects the fund returns.
What does this all-in access fee include? It includes the account and portfolio creation, investment advice, rebalancing costs, dividend withholding tax, FX transaction charges, transfers into and out of the account and brokerage fees. With a single access fee, this also means that there are no sales charges, no transaction fees and no hidden charges. To top it off, you enjoy a 100% trailer fee rebate.
How is this fee charged? The access fee is charged on a quarterly basis, based on your daily average total AUA for that quarter. To make this a seamless process, if you have cash in your account, your cash balance will be used to pay for the fees. Otherwise, Endowus will redeem part of your investment portfolio that is equivalent to your fees due for the quarter.
|Underlying asset||Mutual funds||ETFs||ETFs||Mutual funds|
|Management/advisory fees* (per annum)||0.60% for first $200,000 |
0.40% flat fee for any amount for CPF or SRS money
|0.8% for the first $25,000||0.65% for sum invested of less than $20,000||0.50% – 0.60% p.a. (0% fee for the first $10,000)|
|Cash management account||Endowus Cash Smart: 0.9% to 1.7% p.a.||StashAway Simple: up to 1.4% p.a. ||Syfe Cash+ (coming soon): Projected return of 1.75% p.a.||MoneyOwl WiseSaver: 0.4% p.a. (5-day moving average as at 24 November 2020)|
|Minimum investment amount||$10,000||No minimum amount ($10,000 minimum required for Income portfolio)||No minimum amount||$50 per month (or $100 lump sum)|
|Cash, CPF or SRS?||Cash, CPF and SRS||Cash and SRS||Cash and SRS||Cash and SRS|
*Do note that besides management/advisory fees, other fees such as fund expense ratio apply
To open an Endowus account:
- At least 21 years of age
- Minimum investment amount of $10,000
To invest your CPF money under CPFIS:
- are not an undischarged bankrupt;
- have more than $20,000 in your OA; and/or
- have more than $40,000 in your SA.
From 1 October 2018, new CPFIS investors will also need to take the Self-Awareness Questionnaire (SAQ) before you can start investing under CPFIS
What are the promotions available?
Endowus promotion: Apply with a referral link from your loved ones and friends, plus fund your Endowus account a minimum of $10,000 and hold it with Endowus for a minimum of 90 days, in order to receive $10,000 in assets advised for free for 6 months (equivalent to a $20 access fee discount).
Endowus sets the bar high with a minimum investment amount of $10,000. However, this $10,000 is not difficult to meet, considering it can be can be combined using different modes of funding — cash, CPF and SRS. Endowus also happens to be the only robo-advisor that you can invest your CPF OA funds with! If that’s not reason enough, their latest Fund Smart offering even allows you to curate your own investment portfolio using their approved funds.
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By Ching Sue Mae
A flat white, an adventure-filled travel and a good workout is her fuel. This Manchester United fan enjoys sharing knowledge on personal finance while chasing the dream of financial independence.