Endowus Singapore Review (2020) – Should you Use This Robo Advisor to Invest your CPF?

Endowus Singapore robo advisor review - should you invest CPF

For most Singapore citizens and PRs, CPF savings are untouchable until you buy a home or when you reach retirement age. But have you considered how you can invest your CPF savings? 

Endowus is a robo advisor that lets you invest your CPF Ordinary Account and SRS (Supplementary Retirement Scheme) savings in addition to any other cash you might have. 

What is Endowus?

There are many robo advisors operating in Singapore right now, but Endowus’s distinction is that it enables you to invest both your CPF Ordinary Account and SRS savings.

When you open an Endowus account, you’ll also get a UOB Kay Hian trust account that will contain all your assets, as well as process your Endowus transactions. UOB Kay Hian is one of the largest brokerages in the region, which offers potential new investors some peace of mind.

The minimum initial investment amount is SGD 10,000, and you need to be prepared to maintain that amount in your account. This $10,000 can be derived from a few fund sources — for instance, you can take $5,000 in cash and $5,000 from your CPF Ordinary Account to meet this amount. 

According to Endowus, putting your CPF monies in their investment portfolio will give you 3% to 9% annual returns based on historical data, which is much more than the 2.5% rate from CPF.  

 

Endowus robo advisor review

Endowus aims to keep investment costs at a minimum by concentrating mainly on mutual funds in SGD in order to avoid currency conversions and other fees.

It uses one set of funds for its cash and SRS portfolios, and another set of funds for its CPF portfolios, so your investments are sufficiently diversified. 

Types of funds Endowus offers

The funds in the Cash/SRS portfolios include:

  • Lion Global Infinity US 500 Stock Index Fund
  • Dimensional Global Core Equity Fund
  • Dimensional Emerging Markets Large Cap Core Equity Fund
  • Dimensional Pacific Basin Small Companies Fund
  • Dimensional Global Core Fixed Income Fund
  • PIMCO GIS Global Bond Fund
  • PIMCO GIS Income Fund
  • PIMCO Emerging Markets Bond Fund
  • Dimensional World Equity Fund
  • PIMCO Global Real Return Fund

The CPF portfolios include:

  • Lion Global Infinity Global Stock Index Fund
  • Lion Global Infinity US 500 Stock Index
  • First State Dividend Advantage
  • Schroders Global Emerging Market Opportunities Fund
  • Legg Mason Western Asset Global Bond Fund
  • Eastspring Singapore Select Bond Fund
  • United SGD Fund
  • Natixis Harris Associates Global Equity Fund

Endowus fees and charges

Plus points to Endowus for being one of the cheaper robo advisors out there in terms of fees — there’s just a flat fee of 0.4% p.a. if you invest using CPF and SRS funds.

If you invest using cash, the following fees apply:

Cash
Up to $200,000 0.6% p.a.
$200,001 to $1,000,000 0.5% p.a.
$1,000,000 to $5,000,000 0.35% p.a.
$5,000,001 and above 0.25% p.a.

The fees above exclude fund-level fees (0.18% to 0.64%) charged by fund managers. The max fee for cash investments will be just 1.24% p.a.. 

In addition, for CPF portfolios, the agent bank will charge $2 to $2.50 per transaction, as well as a $2 to $2.50 service charge per quarter, subject to GST. Rejected trades will be charged $5.

Those using SRS funds will have no transaction fees and any unsuccessful transactions will be charged $5. 

Compared to other robo advisors, these fees are considered pretty low already. 

Apart from these, one key advantage that Endowus offers is that it does not accept trailer fees — the commission fee that brokers or financial advisors take when they sell you funds.  

 

How does investing with Endowus work?

Unlike some robo investors such as StashAway and Autowealth that let you invest in ETFs, Endowus’s portfolios invest in mutual funds managed by professional fund managers. 

Endowus then structures your portfolio for you based on your risk profile, and rebalances it for you periodically.

Endowus creates portfolios for users based on their risk appetite. For instance, if you identify as a fairly high-risk investor, you might opt for their Aggressive Portfolio comprising 80% stock and 20% bonds. 

Investors on the cautious side may wish to opt for the Measured Risk Portfolio comprising 40% stocks and 60% bonds. Meanwhile, risk-averse investors on the Conservative Portfolio get a 20% stocks and 80% bond allocation.

The stock-bond ratio for all portfolios is the same for cash, CPF OA savings and SRS savings, but the composition of the portfolio may differ.

Endowus will also help you rebalance your portfolio and prompt you when it does so based on market conditions, at no extra cost. You can choose to not rebalance your portfolio according to their advice should you wish to do so. 

And when it comes to redeeming your investments, the best part is that there’s no lock in period! They say that they’ll process your request within one business day. 

 

Endowus vs MoneyOwl

MoneyOwl isn’t technically a robo advisor but more of an advisory service for beginning investors. Their portfolio consists of equities and bonds, and they also allow you to invest your SRS savings in addition to cash.

In addition, Endowus’s fees are much lower than MoneyOwl’s 1.13% to 1.23%. But MoneyOwl’s minimum investment amount is just $50 a month or a lump sum of $100, compared to Endowus’s $10,000. If you can afford to use Endowus, it offers much better value in terms of fees.

 

Endowus vs Stashaway

Stashaway’s portfolios focus on ETFs rather than mutual funds, and also charges higher fees than Endowus’ of about 0.8% for the first $25,000. But they have a much lower barrier to entry with no minimum investment, compared to Endowus’s minimum account value of $10,000.

Overall, Stashaway is more beginner-friendly, but you’ll pay for the privilege with higher fees. They do have regular webinars and podcasts on financial management, which is pretty helpful for beginners. 

However, if you prefer to invest in mutual funds rather than ETFs at this point in time or want to invest your CPF funds, you’ll want to go with Endowus.

 

Endowus vs AutoWealth

AutoWealth’s fees of 0.5% + US$18 are higher than Endowus’s cash investment fees of 0.4%, but AutoWealth has a lower minimum investment amount of $3,000. In addition, you can’t invest your SRS or CPF funds with AutoWealth.

AutoWealth’s portfolios are focused on ETFs rather than mutual funds.

 

Endowus vs Syfe

Syfe has a much lower barrier of entry than Endowus with no minimum investment. Syfe’s first account tier for amounts of $20,000 and less is more expensive than Endowus at 0.65%. To match Endowus’s 0.4% cash fees, Syfe account holders must have more than $100,000.

Syfe’s portfolios focus mainly on REITs, ETFs and equities, so if you have a preference for mutual funds you’ll want to go with Endowus instead.

 

How to sign up with Endowus

The entire sign up process can be completed online in about 10 to 15 minutes. Just click the “Sign up” button on Endowus, fill in the online forms and you’re good to go.

If you need assistance, you can speak with one of their financial advisors. Their customer service is known to be quite responsive.

 

Concluding thoughts

As a robo advisor that accepts both CPF and SRS funds, Endowus is an obvious choice if you are looking for a straightforward, fuss-free way to invest your CPF and SRS savings with minimum work required on your part. 

Of course, you have to have at least $10,000, which shouldn’t be a problem if you have been working and contributing to CPF for a few years.

SRS funds should always be invested, otherwise they just languish in a bank account and get eroded by inflation.

However, when it comes to CPF funds, don’t rush to invest them without first considering if you need them to buy a home later on. Markets are depressed at the moment due to COVID-19, so it might be quite some time before you can cash out.

In addition, CPF offers decent interest rates, so you can also consider simply transferring your OA savings into your SA in order to reap higher interest rates if you are sure you do not need them to buy property.