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Endowus is our recommended Robo Advisor in Singapore due to their ability to invest CPF funds, passive-investing approach, and easy to use website and app.
Endowus is an investment platform where you can buy ready made, passive, all-in-one portfolios that contain equity & fixed income and are tailored to your risk appetite i.e. its a Robo Advisor. The portfolios are made of mutual funds that invest globally, are low cost & tax efficient and relatively passive.
Endowus is the only Robo Advisor in Singapore that allows you to invest CPF balances cheaply. It is licensed by MAS, is regularly audited and keeps your money in a separate account under your name.
Endowus has an easy to use website and app that guides you through the process of investing. Endowus has a simple, asset size based fee structure and rebates you any payments from the mutual funds. The all-in cost of investing on Endowus is slightly higher than other Robo Advisor but still much cheaper than traditional channels.
On Endowus, you can easily invest all your money, including eligible CPF funds, in low-cost, globally diversified passive portfolios that are appropriate for your risk appetite.
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Endowus is an investment platform with 3 products:
CPF Endowus is the only pure Robo Advisor today that lets you invest your CPF funds on the platform. CPF money can be invested in single mutual funds on the platform or in the advised portfolios that Endowus recommends based on your risk tolerance.
Passive Flagship Portfolios Endowus follows a largely passive investing style as the equity portion of their Flagship portfolios track the MSCI All Country World Index (MSCI ACWI) very closely. Endowus also appears to follow a more conservative investing strategy than its peers with lower equity allocations for similar risk tolerance.
Mutual Funds Based Portfolios Endowus uses mutual funds to construct their Robo portfolios unlike other Robos that rely on lower cost ETFs. They use institutional class shares of these mutual funds to get a lower management fee and also pass on (rebate) the trailer fee from the funds to investors, leading to lower expense ratio for clients.
Relatively Expensive Despite the trailer fee rebate the total expense ratio of 0.45% for the flagship portfolio is still higher than the 0.20% on the average ETF in peers portfolios. According to Endowus this is more efficient than using ETFs because most liquid ETFs trade in US and require FX conversion for purchase and after sale and also attract the dividend withholding tax of 30%. These costs are not included in the 0.20% estimate provided by the competitors. The platform fee of 0.5%+ on Endowus, for assets <S$1m is also on the high side vs. peers.
Endowus does not reveal the algorithm behind their Robo. However we experimented with the Robo to see if we could understand what it was doing. This is our understanding of how it works.
It appears that Endowus has a total of 30 pre-configured portfolio for 6 types of goals and the app recommends one of these based on the goal and risk profile you choose. A goal is a combination of the funding source (CPF/SRS/Cash) and the type of investment you want. The risk profile primarily consists of indicating the maximum drawdown (loss from peak value) in a 12 month period that you are comfortable with.
Of these 30 portfolios, there are 3 portfolio each for Cash Smart (fixed deposit alternative) & Income (passive income generation) goals and 6 portfolios in the Satellite (thematic portfolios) goal. The remaining 3 goals (Core-CPF, Core-Flagship, Core-ESG) each have 6 portfolios, which differ primarily on the asset allocation between Equity and Fixed Income (0|100, 20|80, 40|60, 60|40, 20|80 and 100|0) based on your risk appetite.
The underlying funds for a portfolio within each goal are largely the same, e.g. there are 4 Equity and 4 Fixed Income funds in the Core Flagship portfolio with varying weights depending on the risk tolerance you indicated. The CPF funded Flagship portfolios are different due to restrictions on the funds CPF monies can be invested in.
Portfolios Construction Endowus seems to follow a more conservative asset allocation strategy for the Flagship portfolios relative to peers for a similar risk profile.
Their “default” recommendation only had a 40% Equity allocation in the portfolio despite indicating a 30% loss tolerance, which was in the middle of the possible range (0%-60%) in their tool. The loss tolerance appears to be the maximum possible loss for the suggested portfolio based on a back test period that includes the 2008 Global Financial Crisis.
Peers do not seem to use such hard limits but rather rely on models like value at risk or fuzzier estimates and recommend more aggressive portfolios. For example, a similar risk profile (in our subjective assessment, since it is tough to compare different methods), led to only a 30% Fixed Income allocation in StashAway with Equities, Commodities and Real Estate accounting for 70%.
Looking at the underlying securities in the Equity portion of the portfolio, Endowus seems to follow a very passive strategy with most country and sector allocations very similar to that in MSCI ACWI. Based on our calculations Endowus had the most passive portfolios of all the Robos we reviewed.
While Endowus does not change the asset allocation once set during the initial risk assessment, some of the funds within the advised portfolios are actively managed and therefore the portfolios are not fully passive. The CPF and ESG portfolio have much larger active components.
On our estimates, Endowus is among the more expensive Robo Advisors, ranking 7th – 9th in a comparison of 12 option we considered and usually the most expensive Robo outside of the traditional bank platforms across tiers. However the difference in fees between the 5th ranked and the 9th ranked advisor was not meaningful in our opinion.
They charge a flat 0.40% platform fee for CPF & SRS funds invested in advised portfolios and 0.30% if invested in single funds. For other investments in advised funds the platform fees range from 0.60% for amounts below S$200k to 0.25% for amounts above S$5m. Unlike most peers, there is a 0.05% fees on the FD alternative as well.
The platform fee is over and above the management fee for the underlying funds. The management fee averages to about 0.45% after trailer fee rebates for Core portfolios according to Endowus but may be higher for other portfolios. In our testing we saw average management fees as below:
| Portfolio | Average Management Fee | Total Cost* |
|---|---|---|
| Core Flagship | 0.45% | 1.05% |
| Core CPF | 0.55% | 1.15% |
| Core ESG | 0.90% | 1.50% |
| Cash Smart | 0.23% | 0.28% |
| Satellite | 1.20% | 1.80% |
| Income | 0.70% | 1.30% |
| Fund Smart | 0.85% | 1.45% |
| *For portfolios smaller than S$200K | ||
Endowus has a Capital Market Services License for Fund Management and Dealing in Collective Investment Schemes (Mutual Funds, ETFs etc.) from the MAS.
As a part of the process for approving this license, MAS ensures that the officers of the company are “Fit and Proper”, have competency in core business areas such as fund management, risk management, operation and compliance. Licensees should also have adequate capital and processes in place to manage risk and compliance related issues.
They need to be audited internally on a regular basis and independently at least once a year. They must also ensure that customer assets are valued independently and reported accurately via a 3rd party or an in-house department that operates independently of the investment management function. The annual audit is supposed to additionally verify the independent valuation.
Most importantly the license requires Endowus to keep customer assets segregated from their own assets and with an independent custodian so that they are protected and available to customers in the event of Endowus going bankrupt or facing other difficulties.
Endowus uses UOB Kay Hian as its custodian and all your assets are segregated in your own name in a trust account at UOB Kay Hian.
Endowus has also raised a substantial amount of equity from reputed venture and other investors like LightSpeed, SoftBank, Prosus and UBS, as recently as Nov ’21. The Chairman & CIO, Samuel Rhee was the former CEO and CIO of Morgan Stanley Asset Management in Asia and CEO Gregory Van led payment partnerships at Grab.
UI/UX We found Endowus to be one of the more user friendly platforms with consistent interface on web and in app. The flow of each action is smooth and logical as the system guides you step-by-step to completion. Most common tasks can be completed in a few intuitive steps and we were never lost or confused.
Signing Up Endowus supports onboarding of Singapore Citizens and PRs through Singpass. This means your account is ready and fully functional within a few minutes with no paperwork required. The process for non SC/PR does require more effort and we did not test it.
Funding Once ready the account can be funded via PayNow (SGD only) or Bank Transfer. PayNow transfers are very convenient using the QR code provided. A nice touch at Endowus is that even the reference code for the transfer automagically shows up in your Bank app when you scan the QR code. We did not see this happen in any other platform and we had to type or copy + paste it manually.
The funds are usually reflected in Endowus in 1-2 days. In our testing we found Endowus to be somewhat slower than the fastest peers in completing these transactions.
CPF Setting up CPF investments takes time as it requires completing the CPF administered learning modules and clearing self-awareness questionnaire (SAQ), and also setting up a CPF Investment Account (CPFIA) with an Agent Bank.
The learning modules take about 15 minutes and the quiz takes a similar amount of time. Setting up the CPFIA takes 2-3 weeks although the entire process can happen online if you open the account at UOB.
Investing On the platform you can create multiple portfolios or as Endowus calls them, goals. The app walks you through the setting up these portfolio step-by-step, setting up the funding source, selecting an appropriate risk profile and naming the goal.
Creating a recurring investment is simple and requires you to select the recurring option for an existing goal and select the day of month on which the top up happens. You must then set up a recurring transfer at your bank.
Advised Portfolios If you choose to invest in advised portfolios, the app guides you through selecting a goal, funding source, risk profile etc. It then provides details around the composition of the portfolio such as the underlying funds and their allocation and the top holdings by country, sector and stocks / bonds. The fee details are also provided here.
Mutual Funds If you choose Fund Smart i.e. create your own portfolio, you end up with a spreadsheet of curated funds that fit your selected risk tolerance and you can then select up to 8 funds and their respective allocations to build a portfolio. If you choose a single fund, you get a lower platform fee of 0.30%, otherwise its 0.40%.
The list of funds is presented as an Airtable and is probably the most clunky aspect of the website, requiring a ton of scrolling to figure out details about various funds. The actual fund selection and portfolio set up is again smooth like rest of the website.
If you are looking to invest in Mutual Funds, Endowus offers more than 100 funds to choose from and our comparisons show that the Net Management Fee you pay for these funds is about 0.35-0.8% lower than what you would pay for the same fund on FSMOne.
For people with less than SG$500k on platform, that can represents a meaningful improvement. The advantage is less meaningful for people with more than SG$500k on platform since FSMOne waives platform fees of 0.35% for these clients, but it is still there. The advantage relative to buying these funds from Banks or other channels is significant in any case.
Cash Smart Endowus offers 3 portfolios under the Cash Smart umbrella that are relatively low risk alternatives to FDs (which carry nearly 0 risk). The indicative yields on these vary from 0.7% for the Secure portfolio to 2.2% for the Ultra portfolio.
These funds achieve the higher yields by varying allocations to institutional FDs, money market and short duration fixed income funds. The Secure and Enhanced funds are nearly identical in composition to similar offerings from peers while the Ultra fund is a more unique product.
Its important to know that although these funds compete against FDs, unlike FDs, the value of these funds fluctuates and it is possible that they lose money. In fact, our investment in these funds is down marginally at the time of writing.
Satellite Endowus offers 6 thematic portfolios under this category, four 100% equity allocated portfolios and two 100% fixed income. The themes for the equity portfolios are Technology, China, Global Real Estate and Megatrends, while the 2 fixed income portfolios are focused on China and Low volatility.
Like all other portfolios on Endowus, the Satellite portfolios are also effectively a fund of funds. However, unlike most of the other portfolios, we struggled with the rationale for investing in these portfolios. The Core (esp. CPF) portfolios can make sense as a relatively low cost option for investing in an all-in-one passive portfolio that is regularly re-balanced and optimized. The Cash Smart portfolios are a way of optimizing returns on your cash balances if you are comfortable with a little extra risk. Their all-in cost isn’t very different from the alternatives, in most cases and in some cases (CPF), there is no comparable cost alternative.
But the Satellite portfolios have an average all-in cost of 1.80% p.a. This is after a rebates of 0.6% offset by the 0.6% platform fee. The equivalent portfolio on StashAway, constructed using ETFs with an average management fee of 0.52%, has an all-in cost of 1.2%. That is a large gap. Or you could simply buy a few thematic ETF and bring the cost even lower. Since these are equity only (or fixed income only) active portfolios, the value added for the platform fee is not clear to us.
Income Endowus offers 3 portfolios under this category that target 3.5-10% total return with payouts of 3.5-6%, that can kept with Endowus or directly deposits in your bank account. These portfolios are classified as conservative or very conservative and allocate 60-100% in fixed income. They have a minimum investment requirement of S$10K, in order to ensure that the monthly payouts are sizeable enough to justify the operating costs.
For both Satellite and Income portfolios, selecting the Risk Tolerance does not impact the portfolio construction. If you choose a too low a risk tolerance for the selected portfolio, the app simply highlights this fact, without impacting your ability to choose the portfolio. We wonder if it would have been better to simply indicate the maximum drawdown risk for these portfolios instead.
Endowus Private Wealth This is Endowus’ offering for customers with more than S$1m in assets on the platform. We did not test this product.
However Private Wealth clients can work with a dedicated relationship manager who will provide personalized advise based on their entire portfolio, on and off platform, including real estate, private investments, business cashflows etc. They can also able to access more products that are only available to accredited investors, create tax-efficient portfolios and portfolio denominated in other major currencies.
Customer Service We interacted with the Endowus customer service on many occasions, usually via e-mail. We found them to be prompt and helpful, usually resolving our query. They are also available on WhatsApp and phone. The support team also conducts a demo and Q&A every Friday at 12pm and you have the option to set up a personal call with one of their advisors.
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Robo-Advisors in Singapore had a mixed 2H2022. Their Flagship portfolios underperformed while some Thematic portfolios did well.
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Robo-Advisors in Singapore had a mixed 1H2022. Their Flagship portfolios outperformed while Thematic portfolios bombed.
