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MoneyOwl vs. Endowus: The Battle for CPF-OA Funds

by Apoorv Trivedi on
MoneyOwl vs Endowus

The Bottom Line

Newly launched MoneyOwl CPF portfolios are cheap and simple but do not offer exposure to Emerging Markets (EM) equities.

We continue to recommend Endowus for investing your CPF-OA funds as their portfolios offer more diversified exposure and the overall user experience is much more polished.

The all-in cost is higher than MoneyOwl by 0.12% – 0.18% of AUM but that is likely due to the higher cost of providing EM exposure. The platform fee is identical for the two at 0.40%.

Our pick
Endowus
The best platform to invest CPF-OA Funds

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.

If you found this useful, consider signing up for Endowus via the link above. This gives you access to the best deals and helps us maintain the site.


What’s new?

When we picked Endowus as the Best Robo Advisor in Singapore in Jan 2022, our reasoning was simple: Endowus was the only option in Singapore to invest your CPF-OA funds in a low-cost, globally diversified and passively managed portfolio.

That changed when MoneyOwl launched CPF portfolios in April 2022.

Now that Endowus finally has much needed competition for our CPF-OA funds, we decided to compare the two and figure out if our recommendations needed to change.

If you are unsure about investing CPF-OA funds in the market via the CPFIS, read our article on that question here. The TL;DR version is that if you can invest CPF-OA funds for more than 10 years & don’t need the money for a mortgage down payment or education before that, it makes sense to invest those funds in a low cost globally diversified portfolio.


What are MoneyOwl CPF portfolios?

MoneyOwl CPF portfolios are low cost, globally diversified and passively managed portfolios that  are eligible for CPF-OA investments under the CPFIS.

MoneyOwl currently offers 3 CPF portfolios – CPF Balanced, CPF Growth and CPF Equity that have different allocation between Equity & Fixed Income.

MoneyOwl CPF Portfolios
MoneyOwl CPF Portfolios (Source: MoneyOwl)

The equity portion of the portfolio is invested in the LionGlobal Infinity Global Stock Index Fund while the fixed income portion in invested in UOBAM United SGD Fund.

The LionGlobal Infinity Global Stock Index Fund simply provides access to the Vanguard Global Stock Index Fund, which passively tracks the MSCI World Index.

The UOBAM United SGD Fund actively invests in money market instruments, short term debt and bank deposits and tries to get a better return than SGD deposits.

The LionGlobal fund charges a 0.42% Total Expense Ratio (TER) while the UOBAM fund charges a 0.38% TER. The effective TER for the 3 MoneyOwl CPF portfolio is between 0.40% for the Balanced fund to 0.42% for the Equity fund.

MoneyOwl has waived their advisory fee of 0.40% on the CPF portfolio through Dec 2022. Assuming that this kicks in from Jan 2023, the total annual portfolio management cost for you will be 0.80% – 0.82%. Our analysis assumes this fully loaded cost.


Endowus CPF vs. MoneyOwl CPF

MoneyOwl CPF portfolios are a more simple and slightly cheaper versions of Endowus CPF portfolios.

The end outcome is similar. On both platforms you get low cost, globally diversified and passively managed portfolios. But there are a number of differences that add up to a meaningful gap between the two.

Portfolio Construction MoneyOwl portfolios are simple – one fund for global equities and one for fixed income. They give you 3 portfolios with different mixes of the same two funds.

No snazzy math, jazzy acronyms or other funky stuff. 2 funds, 3 portfolio – 60:40, 80:20, 100:0. Couldn’t be simpler and we like simple.

Endowus CPF portfolios have 4 funds for equity allocation and 3 for fixed Income.

Those are mixed up to give you 6 portfolios containing 3-7 funds each. The portfolios have equity and fixed income ratios of 0:100, 20:80, 40:60, 60:40, 80:20 and 100:0.

Why so many funds? We don’t know but it could be related to the respective benchmarks.

Equity Portfolio Benchmarks MoneyOwl CPF portfolios passively track the MSCI World index for their equity portion.

MSCI World includes stocks in 23 developed markets, such as USA, UK, Japan, Germany, Singapore, Hong Kong. It does not include emerging markets (EM) like China, India, Indonesia etc.

Endowus, on the other hand, tries to replicate the exposure of MSCI All-Country World Index (ACWI). The ACWI includes stocks in 47 markets, including 24 emerging markets. In the ACWI, China has a 3.47% weight, and EMs in total have a more than 10% weight.

Apparently none of the unit trusts approved by the CPFB for CPFIS passively replicate the MSCI ACWI. Therefore Endowus is likely using a mix of 4 funds in different ratios to replicate the actual exposure of the MSCI ACWI.

MSCI World has outperformed the MSCI ACWI marginally since 2001 and somewhat more meaningfully recently. This is probably because the US stock market has done so well after then GFC while pretty much everything else has lagged. MSCI World has a 68% exposure to US vs. 60% for the ACWI.

MSCI ACWI vs MSCI World Performance
MSCI ACWI vs MSCI World Performance (Source: MSCI)

Despite this underperformance, we would actually prefer the ACWI over MSCI World for getting exposure to a diversified equity portfolio. It’s a more diversified index and the exposure to EM is worth having in a portfolio like this, in our opinion.

Fixed Income Portfolio Benchmarks For the fixed income portion, Endowus CPF portfolios try to loosely and somewhat imperfectly replicate the Bloomberg Aggregate Bond Index. This is hard since they are restricted to using funds approved for CPFIS by the CPFB.

The United SGD Fund used by MoneyOwl for fixed income allocation aims to do better than SGD deposits rate. That’s a low bar –  lower than the guaranteed 2.5% you get on CPF-OA.

However the United SGD fund has actually delivered 2.67% annualized over the last 10 years, although more recent performance has been weaker (3yr 1.55% and 5yr 1.64%).

In comparison, a 100% fixed income portfolio at Endowus has delivered 3.13% over 10 years (our est. based on data on their website) and 3.47% & 2.73% over 3yrs and 5yrs respectively.

However this is likely overstating the performance of Endowus vs. United SGD Fund because the metrics for United SGD fund are through Feb 2022, while those for Endowus are through Dec 2021.

Most fixed income portfolios are down a lot in 2022 (SPDR® Bloomberg Global Aggregate Bond UCITS ETF is down 11.3% YTD through April 2022). So the actual performance of the two portfolio is possibly quite similar.

Fees Both MoneyOwl and Endowus charge 0.40% fee for managing your CPF portfolio. MoneyOwl calls it the advisory fee while Endowus calls it access fee.

Both do not collect any other fee from the fund providers and pass on the savings / rebates back to you.

In addition to the advisory / access fee, you also need to pay the Total Expense Ratio (TER) to the fund managers of the funds that make up these portfolios.

Here, MoneyOwl is cheaper.

The TER on their portfolios ranges from 0.40% – 0.42% for an all in cost of 0.80% – 0.82%.

For Endowus CPF portfolios, the TER ranges from 0.42% – 0.60%, leading to an all in cost 0.12% – 0.18% higher than MoneyOwl.

MoneyOwl vs. Endowus CPF Portfolios: All-in Cost

Equity : Fixed Income ↓ MoneyOwl CPF Endowus CPF
100 : 0 0.82% 1.00%
80 : 20 0.81% 0.96%
60 : 40 0.80% 0.92%
Equity < 60% N/A 0.82 – 0.92%

The higher cost is likely a result of including EM exposure in the portfolio as EM funds tend to be a lot more expensive.

To check this, we looked through the prospectuses of all the funds included in the Endowus CPF portfolios. The FSSA Dividend Advantage fund (Asia Ex-Japan exposure) and Schroders Global EM Opportunities funds (EM exposure) had more than 2x the TER of the remaining DM focused funds in the portfolio.

While these documents show the TER charged to retail investors and Endowus probably get a lower TER, it still suggests that the higher all-in cost for Endowus is due to the EM exposure.

User Interface In our original review of the two platforms, we found Endowus to be the more user-friendly of the two. This is still true.

Both platforms have made some changes to the interface and functionality but the overall experience is unchanged from what we saw in Jan 2022.

Endowus does a better job of helping you understand the risk of each portfolio by focusing on a single-metric, the maximum likely loss in a single year. They incorporate it well in the process of selecting a portfolio.

At the same time Endowus also makes it easy to explore the various options and understand the impact on risk, portfolio mix and costs.

MoneyOwl’s interface is not hard but it is less intuitive & efficient than Endowus and somewhat less informative.

They use a multi-step risk assessment questionnaire during portfolio construction, which means that experimenting with different portfolios is hard. You much go through the questionnaire for every scenario. This can be quite tedious.


Our Pick: Endowus

After comparing Endowus CPF portfolios against the new service from MoneyOwl, we continue to prefer Endowus as the best robo advisor in Singapore and the best option for investing your CPF-OA funds.

We like that their portfolios provide some EM exposure because they track the MSCI ACWI and the platform is more user friendly. We think their approach to communicating risk and helping users choose appropriate portfolios is much better than peers, including MoneyOwl.

Those benefits are worth the additional 0.12-0.18% that you pay in TER (likely the cost of adding EM exposure), in our opinion.

MoneyOwl is a credible alternative to Endowus and its good to see more options for investing your CPF-OA funds easily. Their CPF portfolios are simple and cheap but lack EM exposure.


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