EndowUs Roboadvisor: investing using CPF

[qhong61]

I can kind of see where you're coming from, but IMO there's a better way to look at it:

a) if you leave your money in CPF OA, you get 2.5% interest p.a.

b) if you use CPF funds to invest via Endowus, you (ideally) want to get >2.5% returns. Now, Endowus offers various options with differing risk-return profile, so you have to determine what is your risk appetite, what is your investment horizon etc., and then see if what Endowus can offer is suitable for you. There could be portfolios that give say ~3.5% avg returns, with a low level or risk, or portfolios that give ~7.5% avg returns, with a higher level of risk.

c) it may also be attractive to consider the one-way transfer from CPF OA to CPF SA, so that you earn 4%, rather than 2.5%. Over the long-term, this makes a big difference, and I guess most of us will view the 4% rate is being guaranteed (i.e. no risk) although in reality, CPF can change it. This options also depends on whether you have plans for your OA monies (e.g. to fund housing purchase, etc.)

For me personally, 2.5% p.a. is low. I am quite young, and my investment horizon is long. I am prepared to stomach risk, because I feel that over the long-term, the average returns will exceed 2.5%. A few years ago I transferred some OA to SA. There was no Endowus option available then. Currently, I prefer Endowus because I feel that in the long-term, the portfolio I am invested in has a good chance of exceeding 4%.

Is it captal guaranteed?

 

[gold_eagle36]

Is it captal guaranteed?

Of course not

 

[yuzu28]

I can kind of see where you're coming from, but IMO there's a better way to look at it:

a) if you leave your money in CPF OA, you get 2.5% interest p.a.

b) if you use CPF funds to invest via Endowus, you (ideally) want to get >2.5% returns. Now, Endowus offers various options with differing risk-return profile, so you have to determine what is your risk appetite, what is your investment horizon etc., and then see if what Endowus can offer is suitable for you. There could be portfolios that give say ~3.5% avg returns, with a low level or risk, or portfolios that give ~7.5% avg returns, with a higher level of risk.

c) it may also be attractive to consider the one-way transfer from CPF OA to CPF SA, so that you earn 4%, rather than 2.5%. Over the long-term, this makes a big difference, and I guess most of us will view the 4% rate is being guaranteed (i.e. no risk) although in reality, CPF can change it. This options also depends on whether you have plans for your OA monies (e.g. to fund housing purchase, etc.)

For me personally, 2.5% p.a. is low. I am quite young, and my investment horizon is long. I am prepared to stomach risk, because I feel that over the long-term, the average returns will exceed 2.5%. A few years ago I transferred some OA to SA. There was no Endowus option available then. Currently, I prefer Endowus because I feel that in the long-term, the portfolio I am invested in has a good chance of exceeding 4%.

Thanks for the info! Will assess again and look into endowus again.

For OA transfer to SA, Unfortunately, I am unable to, cos max out already.

 

[RedsYWNA]

I tend to agree. But if Dalio is right and US loses supremecy to China in those 20 years, then you might end up being super suay.
I'm in Infinity Global myself.

Infinity Global index is created by Angmo. Hence it under-weighs China, with a huge allocation to Europe, Japan etc. I would rather invest in USA's 500 best companies, and re-weigh China myself through cash. But that's me lah, and I may well be wrong. But either Infinity Global or Infinity 500 is better than 2.5% I feel.

Oh for yuzu28, there's no need to pay back the 2.5% to CPF OA. Investment is a different concept vs use of CPF for property purchase.

 

[yuzu28]

Infinity Global index is created by Angmo. Hence it under-weighs China, with a huge allocation to Europe, Japan etc. I would rather invest in USA's 500 best companies, and re-weigh China myself through cash. But that's me lah, and I may well be wrong. But either Infinity Global or Infinity 500 is better than 2.5% I feel.

Oh for yuzu28, there's no need to pay back the 2.5% to CPF OA. Investment is a different concept vs use of CPF for property purchase.

Thanks! If no need to return the 2.5% interest then it make more sense to use. Will relook again into endowus. Cos I find endowus's portfolio isn't diff to copy.

I'm actually doing dca into infinity global, s&p, and other China funds using cash.

 

[dappermen]

Thanks! If no need to return the 2.5% interest then it make more sense to use. Will relook again into endowus. Cos I find endowus's portfolio isn't diff to copy.

I'm actually doing dca into infinity global, s&p, and other China funds using cash.

these infinity global, s&p, and other China funds will nd alot of ready cash woh

 

[yuzu28]

these infinity global, s&p, and other China funds will nd alot of ready cash woh

Not really la. Lumpsum is min 1k. Rsp min 100. I'm doing rsp into a few uts. When market down, I'll add lumpsum. I'm actually not even 50% vested.

 

[Mr Anonymous]

I just whack only. Ez ez cross 2.5%

 

[s0crates]

Not really la. Lumpsum is min 1k. Rsp min 100. I'm doing rsp into a few uts. When market down, I'll add lumpsum. I'm actually not even 50% vested.

No please please please DONT do a RSP of $100 for CPF monies. You will incur $2/$2.50 for each transaction you make. At least try to do $500 for a monthly RSP so you don't pay ridiculous agent bank charges on a % basis.

 

[yuzu28]

No please please please DONT do a RSP of $100 for CPF monies. You will incur $2/$2.50 for each transaction you make. At least try to do $500 for a monthly RSP so you don't pay ridiculous agent bank charges on a % basis.

Thanks for the info. The rsp I mentioned is done in cash. I have not set up my CPFIA yet.

 

[VanquishShadow]

No please please please DONT do a RSP of $100 for CPF monies. You will incur $2/$2.50 for each transaction you make. At least try to do $500 for a monthly RSP so you don't pay ridiculous agent bank charges on a % basis.

Thanks v much for highlighting this, I didn't know this previously.
I've been investing CPF monies in Endowus 3x a month, and I had no idea my Agent Bank was happily charging me this fee. (I'm aware this has nothing to do with Endowus, though I really hope CPF Board can compel Agent Banks to reduce/remove these frivolous fees).

Will revise to monthly investments instead.

 

[dappermen]

Alwys tell urself nothing is free even when using cpf to invest!
These are the charges levied by the Agent Bank of your CPF Investment Account (DBS, UOB, OCBC).

• Transactions (buy or sell): S$2 - $2.50 per transaction. No transaction fee will be charged for switching/rebalancing of portfolio
• Service charge: S$2-2.50 per quarter
• Rejected trades: $5 to process each unsuccessful transaction (i.e. due to insufficient funds)

 

[yuzu28]

Alwys tell urself nothing is free even when using cpf to invest!
These are the charges levied by the Agent Bank of your CPF Investment Account (DBS, UOB, OCBC).

• Transactions (buy or sell): S$2 - $2.50 per transaction. No transaction fee will be charged for switching/rebalancing of portfolio
• Service charge: S$2-2.50 per quarter
• Rejected trades: $5 to process each unsuccessful transaction (i.e. due to insufficient funds)

The service fee will be charged quarterly no matter if there's any transaction / inactivity?

I remember 20+ years ago when I worked in CPFB, I saw quite a number of people lose money in their investment account and many actually lose money becos of service fee, even they never trade.

 

[twosix]

 

[RedsYWNA]

Meaning we should do the opposite and use our OA to invest?

Same theory as asking you not to invest in Bitcoin, but Temasek bought in 2018. Lol

 

[Mr. Wood]

The service fee will be charged quarterly no matter if there's any transaction / inactivity?

I remember 20+ years ago when I worked in CPFB, I saw quite a number of people lose money in their investment account and many actually lose money becos of service fee, even they never trade.

u worked in cpf be4 shud know better right?
banks will charge as long as u holding. $2-$2.5 per counter per quarter.
simple maths says is not viable to DCA using CPF, and probly at least $5000/yr/transaction to make it worthwhile.

 

[yuzu28]

u worked in cpf be4 shud know better right?
banks will charge as long as u holding. $2-$2.5 per counter per quarter.
simple maths says is not viable to DCA using CPF, and probly at least $5000/yr/transaction to make it worthwhile.

Thanks. That was 20+ years ago. Dunno what has changed ma... Last time can take out profit. My lesson learned then was, never invest using CPF. Cos I met some public who was bankrupt too cos of investment.

 

[twosix]

OA earns 2.5% interests. but most importantly, CPF is ur reserves. usually reserves should not be touched at all. if u want to invest, use ur spare cash, not CPF. this is what the article is about.

 

[s0crates]

u worked in cpf be4 shud know better right?
banks will charge as long as u holding. $2-$2.5 per counter per quarter.
simple maths says is not viable to DCA using CPF, and probly at least $5000/yr/transaction to make it worthwhile.

Idk why you look at it that way, can you explain? Shouldn't it be more from a minimum per transaction basis rather than a minimum per year basis?

I am doing $1.2k a month with one transaction and with $2 agent bank fee that is just slightly less than 0.2% one off for my monthly investment. Even at $500 it is only 0.25% recurring>

 

[RedsYWNA]

Thanks. That was 20+ years ago. Dunno what has changed ma... Last time can take out profit. My lesson learned then was, never invest using CPF. Cos I met some public who was bankrupt too cos of investment.

CPF is for long term investment but the business world is such that there are now no sure thing. I had lost my fair share of CPF by investing in individual stocks when I was young.

Now though, with diversified ETFs, the tables have turned, and it makes sense to invest in diversified ETFs with a time frame of 15-30 years.