EndowUs Roboadvisor: investing using CPF

[foozgarden]

LG is about 0.7%. Now do you still think endowus' managed, diversified portfolio of stocks and bonds at 0.8x% is high?

this is via FSM? or another broker?
0.7% is the all in fee?

 

[hwmook]

this is via FSM? or another broker?
0.7% is the all in fee?

0.7% is fund level so its already assuming zero sales charge and platform fees. FSM charge platform fees so its going to be more than 0.7%.

 

[s0crates]

The whole point is that you can do it consistently with no additional transaction charges with Endowus. If my salary this year is good ( it isn't) I would have consistently top up $500 into my SRS and invest $500 monthly as part of my retirement plans.

No need to even accumulate to lump sum at 15300, just spread it out. End of year SRS top up promo sucks anyway.

Monthly DCA is a gd point, I forgot about it. Although many boglehead would advocate lump sum, instead of DCA.

 

[FinalDestiny...]

I understand the part abt withholding tax, but isn't it the same with funds?
At the fund level, there is oso withholding tax at each individual stock.

and den forex cost and forex risk is passed on to the fund managers, which is similar and someone got to make money out of somewhere. fund managers cannot be doing a free service. there is proly still a bid/ask spread, which other robos will say the same thing their bid/ask spread is competitive or tight, or virtually zero.

There is WHT at the individual stock level for a fund, but the WHT at the fund level is avoided. This is my understanding, please correct me if I am wrong.

Hmm when the USD returns have to be converted to SGD, the exchange rate may not always be in our favour. SGD has generally been appreciating against USD, so returns will be affected. Some robo advisors will claim they are able to obtain good Fx rates, it is up to us to trust them. This FX risk and cost can be entirely avoided by buying SGD denominated funds instead.

Ultimately, investing has risks and if investors are comfortable with the risk, there is no wrong in doing so.

 

[Mr. Wood]

There is WHT at the individual stock level for a fund, but the WHT at the fund level is avoided. This is my understanding, please correct me if I am wrong.

Hmm when the USD returns have to be converted to SGD, the exchange rate may not always be in our favour. SGD has generally been appreciating against USD, so returns will be affected. Some robo advisors will claim they are able to obtain good Fx rates, it is up to us to trust them. This FX risk and cost can be entirely avoided by buying SGD denominated funds instead.

Ultimately, investing has risks and if investors are comfortable with the risk, there is no wrong in doing so.

dunno oso.
but layperson thinking tells me fees is hidden somewhere. even if sgd denominated, someone have to convert sgd to usd to buy the underlying units right? or quote the underlying frm usd to sgd? either way there seems to hav a conversion cost.

yah but agree with yr last sentence. must be comfortable with the risk and the person handling yr money.

 

[hwmook]

dunno oso.
but layperson thinking tells me fees is hidden somewhere. even if sgd denominated, someone have to convert sgd to usd to buy the underlying units right? or quote the underlying frm usd to sgd? either way there seems to hav a conversion cost.

yah but agree with yr last sentence. must be comfortable with the risk and the person handling yr money.

You use IBKR only need to pay USD2 fees for currency conversion, why the heck would anybody think that these huge fund managers even need to pay significant costs for that? Forex costs is probably 0.001%

 

[s0crates]

At any one point of time there can be parties buying and selling the SGD denominated funds. Because no new units are created, there is no FX cost.

Can't say the same when a group of Singaporeans buy and sell usd denominated etfs..

dunno oso.
but layperson thinking tells me fees is hidden somewhere. even if sgd denominated, someone have to convert sgd to usd to buy the underlying units right? or quote the underlying frm usd to sgd? either way there seems to hav a conversion cost.

yah but agree with yr last sentence. must be comfortable with the risk and the person handling yr money.

 

[Mr. Wood]

You use IBKR only need to pay USD2 fees for currency conversion, why the heck would anybody think that these huge fund managers even need to pay significant costs for that? Forex costs is probably 0.001%

comparing betw robo to robo. coz endowus say there is virtually zero fx cost. other robos with big institutes backing can hav same insignificant cost?

 

[assiak71]

comparing betw robo to robo. coz endowus say there is virtually zero fx cost. other robos with big institutes backing can hav same insignificant cost?

I dont understand why you need to care about this mr nofap

You should care about the expenses/costs borne by you

 

[zoneguard]

this is via FSM? or another broker?
0.7% is the all in fee?

Better to pick a broker without AUM fee like POEMS or DollarDex if you want to invest in this.

 

[Mr. Wood]

I dont understand why you need to care about this mr nofap

You should care about the expenses/costs borne by you

becoz endowus keep on saying they are the best, lowest fees, whatever whatever "unlike other robos".
I guess is job hazard. alwys scrutinize my suppliers more when they criticize their competitors.

 

[s0crates]

So what's your opinion of them?

It gets a bit old when they criticise (I have watched many of their webinars and read their content) but end of the day as someone that invest in ETFs myself I understand and experience some of the shortcomings of buying ETFs. Spreads were wider in March, and it's true I pay some FX conversion cost.

It would be interesting to see how other robos fight back though, but honestly their refutes or replies on forums like seedly is so weak. Ughh. And the part about security (using shared custodian account like Smartly) is also unsettling.

The way Endowus put it... It's like you need to be really uninformed to be on other platforms. So I get why you are cautious about them. Then again I cannot find any weakness in their arguments so....

becoz endowus keep on saying they are the best, lowest fees, whatever whatever "unlike other robos".
I guess is job hazard. alwys scrutinize my suppliers more when they criticize their competitors.

 

[cfleee]

dunno oso.
but layperson thinking tells me fees is hidden somewhere. even if sgd denominated, someone have to convert sgd to usd to buy the underlying units right? or quote the underlying frm usd to sgd? either way there seems to hav a conversion cost.

comparing betw robo to robo. coz endowus say there is virtually zero fx cost. other robos with big institutes backing can hav same insignificant cost?

Their argument is that the fund manager is the one doing the fx conversion, so fx cost is very low. Since we can't tell what their actual costs are like, maybe should just think of it as the fx cost is shifted onto the fund manager and becomes part of the TER? Perhaps you're not just paying for your own cash moving in or out, but if it's low enough...

In comparison to the other robos buying USD-denominated ETFs, they or their custodian/broker will charge you probably 8 or 10 bps each way on the amount moving around. Or at least that's what they all say -- I dunno, maybe those using individual custodian accounts can't net off fx movements, maybe those doing the pooled/omnibus accounts can net it off and then charge you the 8-10 bps anyway

 

[Mr. Wood]

So what's your opinion of them?

I rather they focus more on their offerings, rationale for choosing these funds. keep on saying dimensional and pimco are the best in class, but hardly explain why they are the best in class. no charts to show performance relative to benchmark.

then there is one guest, dunno is promotor or wht, keep saying endowus good endowus good, but himself admit only buy S&P500. No skin in the game.

If they really wanna compare, they shud compare with FSM, dollardex etc who are offering UTs, and compare against other UTs.

 

[assiak71]

I rather they focus more on their offerings, rationale for choosing these funds. keep on saying dimensional and pimco are the best in class, but hardly explain why they are the best in class. no charts to show performance relative to benchmark.

then there is one guest, dunno is promotor or wht, keep saying endowus good endowus good, but himself admit only buy S&P500. No skin in the game.

If they really wanna compare, they shud compare with FSM, dollardex etc who are offering UTs, and compare against other UTs.

For info they have some rationale for the funds mentioned in their faq

The thing is for UT, there arent any perfect ones.

If you want to compare, theres one set for you to compare already, which is the cpf portfolio.

 

[s0crates]

Yea I get your point. But focus on performance unfortunately lead to very short sighted views. Or maybe mid term views (which dimensional fared slightly poorly relative to index funds haha).

The 1m65 guy is quite amusing, as with many of their other guests that they invite in their events/webinars hahaha. They don't sound like they are paid by endowus, since they have different views.

On your last point, I don't think it's fair to compare a total self service unit trust platform to endowus. Their service is more like an advised portfolio, so despite the different type of fund used, it's actually more like stashaway and moneyowl.

I rather they focus more on their offerings, rationale for choosing these funds. keep on saying dimensional and pimco are the best in class, but hardly explain why they are the best in class. no charts to show performance relative to benchmark.

then there is one guest, dunno is promotor or wht, keep saying endowus good endowus good, but himself admit only buy S&P500. No skin in the game.

If they really wanna compare, they shud compare with FSM, dollardex etc who are offering UTs, and compare against other UTs.

 

[assiak71]

Anyone knows what time the portfolio value is updated and which day's NAV is that, "today" or "yesterday"?

 

[decibel.]

After watching the video regarding the portfolio change, it appears to me the key thing is that the new changes are slightly better in terms of volatility, returns and diversification which may not matter that much in the short term, but in the long term it would matter more. A difference of even 1% in annualised returns would compound to a significant amount over the years.

It is implied that this change has been well thought out as it is the first portfolio change since they started in March 2018 :O

The rationale for Pacific Basin fund is because it has the lowest correlation to other equity funds in the portfolio. Is this a strong enough reason, I can't say for sure. cfleee raised some good questions regarding this and the role of the Vanguard S&P500 ETF in the new portfolio.

I find their arguments against US ETFs pretty convincing, as the low fund level fees are only part of the total fees incurred. There is Withholding tax of 30%, forex cost, forex risk and brokerage costs (perhaps not as significant due to IBKR low cost) that we have to factor in as well.

I don't think so. The returns are based on past results and US has been in a bull run for years. The new portfolio has more exposure to US market - I think 60%+? And investing into PAC because of low correlation doesn't check out for me - I don't think this market will even do well. The main factor in the higher estimate returns is purely from S&P inclusion while PAC lowers down the estimate risks with neutral growth. It "seems" diversified but it looks concentrated in US performance. Won't the returns be comparatively lower if US failed to perform? In the old portfolio I believe the US exposure is below 60%. Speaking from SRS perspective, that estimated 2% increase in annualized return probably won't mean that much of a difference since it's locked up till 62 anyway and even with 7% estimated, it's good enough?

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[Barracudaz]

How's the returns compared to stashaway???

 

[s0crates]

It's at 60.2%, up from 55%. I wouldn't call that over weighing.

I mean end of the day historical numbers are just for reference la, but it's still the best indication of how they will do in the future. I do hope future portfolio changes have more tangible change. Like change in the weighted TER of the fund la.

The fact that we can nitpick and question their choices mean what they are doing is clear enough and still largely consistent. The rest is up to the market already.

I don't think so. The returns are based on past results and US has been in a bull run for years. The new portfolio has more exposure to US market - I think 60%+? And investing into PAC because of low correlation doesn't check out for me - I don't think this market will even do well. The main factor in the higher estimate returns is purely from S&P inclusion while PAC lowers down the estimate risks with neutral growth. It "seems" diversified but it looks concentrated in US performance. Won't the returns be comparatively lower if US failed to perform? In the old portfolio I believe the US exposure is below 60%. Speaking from SRS perspective, that estimated 2% increase in annualized return probably won't mean that much of a difference since it's locked up till 62 anyway and even with 7% estimated, it's good enough?

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