I have been using Endowus since end August 2023. So, I thought that it is a good time to take a look back at the use of Endowus platform for investment and to share my experiences. Overall, I like the easy to use mobile and web version of the platform. For today's sharing. I think I will touch on the fees chargeable by Endowus for access to their platform via cash investments.
1. Any Upfront Sales Charge or Transaction fees?
The unique thing about investing via Endowus platform (relative to direct purchase of Unit Trusts) is that there is no upfront sales fees and transaction fee. In addition, Endowus also provides a 100% Cashback on trailer fees. Hence, there is no point to buy unit trusts from the traditional route of banks or insurance companies Investment Linked Products ILP).
In addition, there is no charges for redemption/selling of units in the "Endowus Goal' being created.
2. Annual Fees of up to 0.6% per annum Chargeable by Endowus.
There are basically 2 types of recurring management fees here for buying into Unit Trust on Endowus. (i) The first one is the usual fund level management fees by the actual fund managers and (ii) Endowus level management fees, which is of interest here to us for the purpose of today's discussion.
If one is investing into the "Advised Portfolios" of "Core", "Satellite", "Income" or self-created Multi Fund portfolio, the Endowus level management fees will be between 0.25% to 0.60% per annum. The higher your investment quantum per goal, the lower is your fees. Note that quantum threshold to determine your fees is based on quantum of per investment goal you created in Endowus. Hence an Endowus user CANNOT combine all the balances in different goals to argue that he/she has reached the higher level tier to enjoy cheaper rate.
Most retail and newbie investor will end up with this higher 0.60% management fees due to smaller capital being invested upfront in any single goal. If one invested just into one single fund, then this platform management fees will drop by half to only 0.30%. For a S$200K capital, this is a savings of +$600 per annum and +S$6K over a decade!
Hence instead of creating a single goal with say multiple funds of 5 unit trusts, one can simply just create 5 goals with 1 unit trust in each goal. This will drop the platform management fees to only 0.30% since Endowus has a special single fund goal charges of a mere 0.30% per annum.
Parting thoughts
If one wants to go with the pre-set "advised" portfolios such as Income Portfolio recommended by Endowus, then there will be the higher platform management fees charge of 0.60%. This is well worth it given that Endowus investment team will monitor and give various recommendations to change the constituents of the portfolio to those better performing or drop under performing ones.
If one decides to DIY to create a portfolio of one's own favourite unit trusts and if one wants to save on the platform management fees of 0.30% differences per annum (as alluded to pt 3 above), one can simply create multiple goals with 1 single fund in it. The downside to this would be that one would need to manually track on excel one's recurring allocation per month into the different months and also perform one's own balancing.
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