Endowus Review 2022 – that will be the topic of today’s article. Nothing written here should be considered as formal financial advice, or any other kind of advice, but we have done our best to be objective.
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Read a detailed review of Endowus for 2022 alongside insights into Premier Trust.
Introduction
For most Singaporeans and PRs, CPF savings are inviolable until you buy a house or reach retirement age. But have you ever wondered how you can invest your savings from CPF?
Endowus is an advisor robot that allows you to invest your savings in a regular CPF and SRS (Supplementary Retirement Program) account in addition to any other cash you may have.
What is Endowus?
There are many consulting robots currently working in Singapore, but the difference with Endowus is that it allows you to invest both your regular CPF account and your savings in the SRS.
When you open an Endowus account, you will also receive a UOB Kay Hian trust account, which will hold all of your assets as well as process your Endowus transactions. UOB Kay Hian is one of the largest brokerage firms in the region and offers potential new investors some peace of mind.
The minimum initial investment is S$ 10,000 and you should be prepared to keep this amount in your account. This S$ 10,000 can be obtained from several sources of funds – for example, you can take S$ 5,000 in cash and S$ 5,000 from your regular CPF account to cover this amount.
According to Endowus, placing your CPF money in their investment portfolio will give you 3% to 9% annual return based on historical data, far more than the 2.5% CPF rate.
With its low management fees and functionality with CPF and SRS funds, Endowus is a great option for individual investors in Singapore. Not only that, this robot consultant prides itself on being an independently owned and operated financial consultant and does not charge its users any trailer or sale commissions.
Endowus is one of the leading robotics consultants in Singapore for a number of reasons. First, the platform charges competitive fees (0.25% – 0.60% of cash portfolios, 0.4% of CPF / SRS portfolios), making it the cheapest robotic advisor among those investing in mutual trusts (not in ETF). It is also the only robot advisor that allows users to invest their money and CPF or SRS funds.
In addition, Endowus does not charge users any fees for opening or closing accounts, transferring or withdrawing funds. Finally, the independently owned and operated platform does not charge investors for trailers.
Trailer fees are usually collected by third party fund managers (eg brokers, financial advisors) who sell the fund to investors. Since Endowus does not charge its users for trailers or sales commissions, it avoids any potential conflict of interest (that is, it has no incentive to use certain funds) and keeps its independent financial advisor reputation.
From April 15, 2021, Endowus is offering Cash Smart Ultra, which offers higher maximum profitability opportunities. This portfolio optimizes your investments for high returns with minimal risk. Endowus Cash Smart Ultra’s yield target of 1.8% to 2.0% is the highest cash management account on the market.
Pros
- An independent robotics consultant
- Access to funds from reputable fund managers, otherwise only available to institutional investors
- Invest not only cash, but also CPF and SRS money
- Low full access fees at 1/3 of the industry average
- A cash management account is available to store (and increase) your free cash
- ESG multi-asset portfolios tailored to your risk resilience
Cons
- This is the cheapest robo consultant
- You cannot invest less than $ 1000
- You must be 21 years old to open an account with Endowus
- Big investment required to get even lower commissions
How does Endowus work?
Unlike some robotic investors, which allow you to invest in ETFs, Endowus portfolios invest in mutual funds managed by professional fund managers.
Endowus then structures your portfolio for you based on your risk profile and periodically adjusts it for you.
The company creates specially cultivated portfolios for its users, which is done based on each client’s risk level. For example, if you identify as a fairly high risk investor, you might choose their aggressive portfolio of 80% stocks and 20% bonds.
Cautious investors may prefer a portfolio of measurable risks of 40% stocks and 60% bonds. Meanwhile, risk averse investors in the Conservative portfolio receive 20% of stocks and 80% of bonds.
The stock-to-bond ratio is the same for all portfolios, no matter cash, CPF OA savings, or SRS savings. Note that only the composition of the portfolio can be different.
Endowus will also help you rebalance your portfolio and tell you when it will happen based on market conditions at no additional cost. You can opt out of rebalancing your portfolio according to their advice if you wish.
And when it comes to the return on your investment, the best part is that there is no fixed period! They say they will process your request within one business day.
What can Endowus offer you?
The company is mainly focused on two most important financial services, which are investments and cash management.
Endowus tries to cultivate customized portfolios depending on risk preferences, investment objectives and preferred time horizons. The Robo Advisor prides itself on its global diversification and thorough analysis of historical performance.
Another notable difference between Endowus and its competitors is its focus on unit trust portfolios. Unlike ETFs, mutual funds are usually professionally managed and aim to outperform market indices, which are often tracked by ETFs.
Endowus is also the only advisor robot that allows you to invest in a locally packaged Vanguard UCITS CPF mutual fund.
Investments
Endowus Core Portfolios
Endowus will give you the chance and the wide variety of six different portfolios to invest your cash, CPF or SRS cash. This will depend on your investment goals and risk tolerance. Your funds will go into a globally diversified portfolio offering best-in-class mutual funds (also known as mutual funds) from the world’s leading fund managers without spending more than you owe on commissions (more below). The portfolios you will choose from are broken down by shares versus bonds.
Your investments are automatically rebalanced to ensure your portfolio is aligned with your goals. You will also receive investment tips and have the option to set up regular monthly investments. The cost of these transactions is counted towards a single total access fee.
Endowus Fund Smart
Endowus has recently added Fund Smart to its range. With Fund Smart, you can now create and personalize your own portfolio – a solution that has been sorely lacking in the robotics consulting arena.
With Fund Smart, you get exclusive access to best-in-class institutional funds from the world’s leading asset managers to build your portfolio. From this you can conclude that Endowus is a professional in picking out the best funds available for that class or asset category. As with existing Endowus offerings, you also do not receive any sales commissions, transaction fees, and 100% discount on trailer commissions.
You will do the rest. Select the funds that make up your portfolio and set up the allocation of funds. Currently, you can choose from up to 8 funds, choosing between stock funds, fixed income and multi-asset funds.
When building a portfolio, you are not alone. Once you have selected your funds, Endowus will provide you with an overview that includes your average annual return based on historical data, forecast targets and total annual fees.
Endowus ESG Portfolios
Investing in ESG is fast becoming one of the global investment megatrends. On March 17, 2021, Endowus launched Asia’s first ESG (Environment, Social & Governance) portfolio with multiple assets for investors looking to invest in a more sustainable future. This means investing that contributes to positive environmental and social impacts.
This ESG portfolio of best-in-class ESG funds allows investors to invest in both stocks and fixed income products from leading ESG fund managers. Like their other portfolios, Endowus has provided institutional-grade funds with 100% discounts on investor fees.
Cash Management
Endowus also offers a cash management account – Cash Smart. Cash management accounts are an alternative to savings accounts, helping you grow your free cash.
Unlike many high yield savings accounts that require you to meet certain criteria to earn interest, you can multiply your money simply by keeping money in your Cash Smart account. There is no blocking period, there are no levels to be reached, there is no limit on the amount you can keep in the account, and your interest is calculated daily.
An Endowus Cash Smart account is available not only for your cash, but also for your free SRS funds. Here are three different Cash Smart accounts available:
- Endowus Cash Smart Core is a diversified portfolio of cash and money market funds. 50% Fullerton cash fund SGD, 50% increased liquidity LionGlobal SGD. Projected yield after all fees: from 0.8% to 1% per year.
- Endowus Cash Smart Enhanced is a diversified money market portfolio and high quality short-term bond funds. 50% UOB United SGD Fund, 50% increased LionGlobal SGD liquidity. Projected yield after all fees: from 1.2% to 1.5% per year.
- Endowus Cash Smart Ultra is a diversified portfolio of short-term fixed income and money market funds. 27.5% LionGlobal SGD extended liquidity fund, 25% Fullerton short-term interest rate fund, 25% LionGlobal short-term bond fund, 12.5% Nikko AM Shenton income fund, 10% PIMCO GIS low-income fund. Projected yield after all fees: from 1.8% to 2% per year.
Endowus fees and commissions
In addition, Endowus points out that it is one of the cheapest robotics consultants in terms of fees – there is only a flat fee of 0.4% per year. if you invest with CPF and SRS funds.
If you invest in cash, the following fees apply:
| Up to USD 200,000 | 0.6% per year |
| From USD 200,001 to 1,000,000 | 0.5% per year |
| From USD 1,000,000 to 5,000,000 | 0.35% per year |
| USD 5,000,000 and above | 0.25% per year |
The above fees do not include fund-level fees (0.18% to 0.64%) charged by fund managers. The maximum commission for cash investments will be only 1.24% per annum.
In addition, for CPF portfolios, the agent bank will charge $ 2 to $ 2.50 per transaction, as well as a service fee of $ 2 to $ 2.50 per quarter including goods and services tax. Rejected trades will be charged $ 5.
Those using SRS funds will have no transaction fees and unsuccessful transactions will be charged $ 5.
Compared to other robotics advisors, these fees are already considered quite low.
In addition, one of the key benefits of Endowus is that it does not accept trailer commissions – the commission that brokers or financial advisors charge when they sell funds to you.
What are the Endowus advantages as your robo consultant?
Access to the world’s leading funds at the lowest possible cost
Endowus opens doors for retail investors who can invest in funds that are usually only available to institutional investors.
Their platform allows you to access Smart Beta and actively managed fixed income products from reputable fund managers like Dimensional Fund Advisors and PIMCO at the lowest total cost.
With access to funds from these fund managers, Endowus uses evidence-based investing to give investors the highest likelihood of investment success in the long term. This means choosing investment products that have shown good long-term performance with a proven track record, which are also offered at an attractive institutional price.
Invest your CPF, SRS and money in a single platform
You can invest your CPF money in Endowus under the CPF Investment Scheme (CPFIS). To do this, you 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 Special Account CPF (SA) brings in a solid 4% per annum. percent, the money in your regular CPF (OA) account brings in a modest 2.5% per annum. There is also an additional 1% you earn on the first S $ 60,000 of CPF combined balances, up to a maximum of $ 20,000 for CPF OA. And 2.5% per annum. the interest rate isn’t all that bad, there are investors who will feel they can do much more by investing their retirement savings – in particular by investing in Supplemental Retirement Benefits Scheme (SRS) or CPF OA.
Through Endowus, your SRS or CPF OA funds can access a globally diversified portfolio with some of the lowest CPF investment costs.
Low overall access fees
Fees are one of the biggest investment issues. The reason is simple: fees eat up your income. The less commission you pay, the more income you have in your pocket. For example, if your commission is 3%, in order to receive a 7% return on your investment, the investment must receive a 10% return before fees are paid.
Your profitability will depend on other factors as well, such as risk appetite, which determines the structure of your portfolio. Not all portfolios are focused on high returns, as risk averse investors may choose lower risk for moderate returns.
Rather than paying several different fees at different tiers, Endowus uses a simple flat fee that covers all of the associated costs. The only fee that is not included in the total access fee is a fund-level fee ranging from 0.18% to 0.64% per annum.
Increase Your Free Money
With current low interest rates, many banks have cut interest rates on their savings accounts. This means fewer opportunities to increase your free or emergency funds.
With your Cash Smart account, Endowus gives you the opportunity to earn up to 1.4% per year. with your spare money without worrying about criteria such as minimum credit card spending or wages. You even have the option to choose between two different Cash Smart accounts depending on your risk tolerance and how soon you need those savings.
Build your own investment portfolio
With its latest investment solution, Endowus Fund Smart, Endowus gives investors the ability to build their ideal investment portfolio with the click of a few buttons. Similar to the portfolios recommended by Endowus, you can invest your cash, CPF or SRS funds with Fund Smart. Investors looking for a robotic advisory option that allows customization of portfolio components and each individual allocation will find Fund Smart useful.
Sustainable investing with ESG investing
With Endowus ESG Portfolios, retail investors now have an ESG-focused portfolio to invest in. This ESG portfolio combines two goals: generating financial returns while ensuring a positive environmental and social impact. Investors looking for an ESG solution can use Endowus ESG Portfolios to invest in both ESG stocks and fixed income products.
Endowus also offers this ESG portfolio at a low cost, providing access to institutional funds and providing a 100% discount on trailer fees.
Safety
What if the company ceases to exist? When it comes to the next generation of robotic consultants, many investors have serious concerns about the safety and security of keeping money at a consulting robot company.
When you create an Endowus account, Endowus creates a trust account in your name with UOB Kay Hian, Singapore’s largest broker. This means that no matter what happens to Endowus in the future, you will have full access and rights to your assets, which are stored in UOB Kay Hian’s account under your name.
The benefits of robo-consultants
Robo consultants are automated investment services aimed at ordinary investors – are becoming an increasingly popular way to access the markets.
On the other hand, robotic advisors are very cheap and often have no minimum balance requirements. They also tend to follow optimized indexed strategies that work best for most investors.
Robo-consultants do not offer many flexibility options for investors, they tend to muddle traditional advisory services, and there is a lack of human interaction.
What you will like about robotic advisors?
1. Low fees
Prior to the introduction of robotic advisor platforms, investors were fortunate enough to receive professionally managed investment assistance for less than 1% of assets under management (AUM). Robots have significantly changed this paradigm. From scratch for smart portfolios Charles Schwab Corp. up to 0.25% for the Betterment portfolio (after the first free year) there are plenty of low-cost robots to choose from. Wealthfront and improved game models contribute to a counter-cost consumer.
2. Robo advisors are not universal for everyone
There are robo-advisors with low commissions for different categories of clients. For example, if you are interested in a specific sector or investment topic, then 151 existing Motif portfolios offer you a platform.
Veres’s article mentions that Motif excels in giving its users a variety of portfolios based on ideas ranging from a shale gas portfolio to a “fight against fat” suggest for investors interested in weight loss companies to a caffeine portfolio that coffee-related companies choose for you. If minimum fees are your primary concern, there are several advisor robots with widely diversified ETF portfolios with low fees.
Some robo-advisors say they have rebalancing and tax loss collection in their arsenal. There are unified approach and hybrid robo-advisors. Others, such as Rebalance IRA and Personal Capital, have higher entry barriers, starting from $ 100,000, respectively. to the recently lowered $ 50,000 minimum entry fee.6 However, even robots with high entry requirements are more affordable than financial advisors with a minimum portfolio of $ 1 million.
3. Low minimum balance
For investors with small capital, getting professional advice on robotics is a blessing. Robo-consultants with zero minimum balance technology include Folio Investing and Wise Banyan. Betterment also has no minimum balance. Other robo consultants are available for $ 1000-5000 to start with. Personal capital is free for those interested in accessing portfolio monitoring, and higher balance tiers are reserved for access to a dedicated financial advisor.
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