Thank you so much for the info! I will take the forex risk into consideration. Yes it was introduced from Aviva, and ILP product.
I'm wondering if there's any other similar products in the market for me to do comparison?
Don't misunderstand the forex risks. A fund (ILP or ETF) can be denominated in any number of currencies, but you should only be concerned with the currencies of the stocks that make up the fund. For e.g. the IWDA fund that unhinged shared with you comes listed in USD, GBP, CHF etc etc. But it is made up of equities all over the world with about 58% listed in the US in USD.
In any case, with the current interconnectedness of the world economy, even when you buy into Singtel, you are exposed to other currencies such as the AUD. And most US companies derive their income all over the world, and so we are all exposed to currency risks whether we like it or not. It's just a matter of who is managing that risk.
A so-called currency-hedged fund is not necessarily a good idea, as all those currency hedging employed by the fund manager comes with costs; there is no free lunch. A plain vanilla "unhedged" fund will be just fine.
Like kehyi4 and unhinged, I don't think ILP is a good idea. Don't lump investment and insurance together because you end up with something that does neither well. An ILP does not provide enough protection per insurance buck, and doesn't provide enough returns either due to high costs. Your premiums for the first three years go towards lining the pockets of the insurance company and your agents and not really into the investment bucket. In this sense, it does worse than a normal high-cost unit trusts.
And unit trusts in turn, suffers from high fund expense ratios, typically above 1% annually. Imagine, if the fund returns 3%, one third of your returns gets eaten up. And also it's quite hard for active fund managers to consistently outperform the market.
Lastly, Morningstar ratings mean nothing about future fund performance. Even Morningstar itself is at pains to point it out. Smarter people than you and I (read: Nobel prize winning economists) have done research backtesting highly rated Morningstar funds and proved that future performance is, if anything, worse for 5-star funds as performance mean reverts. This is due to many factors, but I'll just list one of them here: As a fund becomes more successful, insurance agents will start to tout its performance to retail investors saying that it's a very good fund. And while that is true when that fund was just a $50 million size fund, it becomes a victim of its own success when suddenly fresh funds pour into the fund manager due to its success. Fresh funds is AWESOME for fund managers as their fees are based on percentage of assets under management (AUM), but bigger funds find it more difficult to hunt for returns as it becomes more difficult to buy and sell stocks without moving the market. Even Warren Buffett said that if he was still managing a fund of the size when he was just starting out, he can guarantee 50% returns every year, but not now that he is managing a behemoth.
TLDR: stay away from ILPs, and high costs funds. No one can guarantee fund returns, but high costs are recurring and guaranteed to eat into whatever returns you get.
