10 min read

Endowus Review (2022)

Endowus is the first digital advisor for CPF, SRS, and cash. Read whether it's the right robo-advisor for you.
Endowus Review (2022)

What is Endowus?

Endowus is the first digital advisor for CPF, SRS, and cash, helping everyone invest holistically, conveniently, and with expert advice at the lowest cost possible.

As a fee-only independent advisor paid solely by its clients, it is able to offer advice  unaffected by conflicts of interest. It uses proprietary systems to provide data-driven wealth advice in constructing personalised solutions.

Its portfolios are built on access to institutional-quality financial products at the lowest cost possible.

Endowus Products

Endowus is a digital advisor, and doesn't strictly offer investment products on its platform. Instead, Endowus helps you construct personalized investment portfolios based on your needs and goals, and invests your funds with reputable fund managers with the expertise, scale and proven track records.

Endowus offers the following array of products:

  • Endowus Core
  • Endowus Satellite
  • Endowus Income
  • Endowus Cash Smart
  • Endowus Fund Smart

Endowus Core

Endowus Core is its core investment offering to help investors invest in globally diversified portfolios designed for their goals. Within Endowus Core, it offers several sub-categories of investment products.

Endowus Core Flagship

Endowus Core Flagship portfolios

Endowus uses an evidence-based approach in designing its flagship portfolios to give you the highest probability of success in growing your wealth over the long-term.

There are 5 model portfolios you can choose from, depending on your risk appetite. This ranges from 100% equities and 0% bonds to 0% equities 100% bonds.

Endowus uses empirical data and time-tested academic evidence to provide the highest possible expected return for a given risk level. The allocations to capture those factors identified by academic research that can enhance the return profile of a broad market exposure portfolio.

Core ESG Portfolio

Endowus ESG portfolios allow investors to invest in the best ESG, sustainable and climate funds for both equities and fixed income from top ESG fund managers at the lowest achieveable cost.

ESG (Environmental, Social and Governance) investing is an investment practice that takes into consideration the impact of investment on the environment and society at large. ESG investing avoids irresponsible companies and prefers companies that are responsible corporate citizens.

It believes that it is possible for ESG investing to generate higher risk adjusted returns while doing good.

These portfolios are made up of best-in-class ESG funds from top award-winning, experienced ESG asset managers, invested in a passive strategic asset allocation according to Endowus' investment philosophy.

Endowus Factor Portfolios

Endowus Factor Portfolios allow investors to access globally diversified, systematic, multi-factor portfolios with tilts towards the proven factors of returns,
‍suitable for their specific risk-return objectives.

They have partnered with Dimensional - a global leader and pioneer in systematic factor-based investing - to implement the Factor Portfolios due to their long track record, implementation expertise and low cost.

Endowus Core Flagship vs ESG vs Factor Portfolios

Comparison between Endowus Core portfolios

Endowus Core Flagship Portfolios are designed to passively track global indices and have a mix of Dimensional and non-Dimensional funds in the portfolio. There is also a mix of pure passive and active funds across asset classes.

Endowus ESG Portfolios are passive in asset allocation, globally diversified and low cost just like the Flagship Portfolios, but actively allocated to the ESG factors.

Endowus Factor Portfolios are purely factor-based investing implemented systematically by Dimensional and managed actively on a discretionary basis by Endowus Investment Office. This mean that Endowus is empowered to automatically make changes to the portfolio such as rebalancing and optimising the fund allocation.

All 3 portfolios are designed by the Endowus Investment Office as a multi-asset portfolio across the equities and fixed income risk spectrum.

These portfolios are suitable for new and experienced investors alike and should always form the backbone of any investors’ overall investment strategy.

Endowus Satellite

Endowus Satellite Portfolios lets you take advantage of optimised, best-in-class portfolios designed by Endowus to target your favorite regions, themes, asset classes, and trends.

In a core-satellite investment philosophy, adding a satellite portfolio is often used to potentially enhance risk-adjusted returns or achieve further diversification.

There are currently 6 satellite portfolios to choose from: Technology, Global Real Estate, Megatrends, China Equities, China Fixed Income, and Low Volatility Fixed Income.

Endowus Income

Endowus Income Portfolios are designed to cater to different investors’ needs depending on the life stage of investors, based on their current payout income needs while balancing it with the longer term wealth accumulation needs.

Endowus Income portfolios are designed to fit the needs of each demographic segment and life stage of the investors and currently structured into 3 buckets:

  • Stable Income - 100% fixed income
  • Higher Income - 80% fixed income 20% equities
  • Future Income - 60% fixed income 40% equities
Endowus income portfolios visualised

Depending on an investors preference for income - for example, do they want stable monthly payouts which is suitable for retirees or higher payouts with some capital appreciation, suitable for adults with higher living expenses - the investor can build an income portfolio for his or her needs.

Each Endowus Income Portfolio is globally diversified and covers multiple fixed income sectors and almost all equity sectors to ensure that the income payouts are resilient and not overly-reliant on certain funds or sectors or asset classes.

Endowus Cash Smart

Endowus Cash Smart is a cash management solution for investors to earn more on their idle cash based on their risk tolerance. It is a diversified investment portfolio of cash, money market, and short duration fixed income funds.

Investors depositing into Cash Smart's three optimised portfolios at varying levels of risk can enjoy higher yields from 0.7% to 2.4% projected yields annually with no lock ups, limits or tiers, penalties, hidden charges, and transfer limits.

Endowus Cash Smart portfolios
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Endowus Fund Smart

Endowus Fund Smart platform

Endowus Fund Smart is a curated list of best-in-class funds at the lowest cost possible across asset classes, geographies and sectors selected by Endowus Investment Office, who has conducted due diligence on thousands of funds.

When using Endowus to access the institutional share class of funds, investors may gain access to the lowest fee share class with no trailer fees embedded. However, if the institutional share class funds are not available, Endowus may offer the retail share classes and rebate all trailer fees received by the fund manager.

However, Endowus will charge an all-in Access Fee for this service, which even after all-in costs, could be cheaper than if the investor would buy a similar product through a private or retail bank.

Comparing Endowus Fund Smart vs similar solutions

For instance, if you buy the PIMCO GIS Income Fund SGD-Hedged at a bank, you may be paying first-year fees of close to 3% including upfront sales charges, custodian fees and the higher retail share class TER of 1.45%. Buying the same fund through Endowus could cost just 1.15% (0.55% TER on the institutional share class + 0.6% access fee).

Endowus Private Wealth

Endowus Private Wealth is a bespoke offering for affluent individuals and their families with a minimum deposit of S$1 million in assets across Endowus services, allowing them to gain access to more personalised solutions and products, bespoke portfolio construction, smart monitoring and more.

Investors here can also access investment solutions that are estate and dividend withholding tax-efficient for Singapore-based investors, build investment portfolios denominated in major currencies and more.

How does Endowus invest?

Endowus investment philosophy is rooted in the belief of science over speculation.

They advocate broadly diversified, passive and systematic strategies that have global market exposure with tilts towards the proven factors of returns such as value, size, and profitability as backed by Nobel Laureate academic research.

Endowus is a fee-only advisor, whose interests are fully aligned to the investor. Hence, they are always trying to reduce fees by having no sales fees or transaction fees and rebating 100% of any trailer fees that they receive. The higher your return, the more you deposit with them, they more they earn.

Endowus implements portfolios by accessing leading global fund managers with the expertise, scale and real, proven track records in implementing their strategies successfully over time.

Here are their 8 investment principles:

  • Maximise returns by minimising cost: Removing the single biggest drag to portfolio performance over time
  • Enduring belief in power of markets: Taking broad market exposure through the wisdom of crowds to capture the best long-term performance
  • Time in markets vs market timing: Giving the long-term investor the highest chance of success in reaching their financial goals
  • Asset allocation is everything: Setting up an appropriate, intelligent asset allocation strategy is the most important driver of long-term return
  • Strive for the efficient frontier: Generating the highest possible expected return for every level of risk taken
  • Diversification improves risk-return: Having broad exposure across diverse assets whose correlation characteristics reduce risk without sacrificing returns
  • Optimise based on personal risk tolerance: Customising personal portfolios is essential as there is no one size fits all in investing
  • Know your limitations: Partnering with experts and leading global institutions to access best in class financial solutions to achieve your goals

Why invest in Endowus?

Endowus advocates for passive, strategic and long-term investments across all your sources of funds – from cash, to SRS and CPF, ensuring that you are holistically covered.

With a wide variety of products for every individual, there is bound to be something that's suitable for your investment preferences, risk appetite and time horizon. Their investment philosophy is sound, the returns are in-line with market, and their fees are competitive. They also have a great reputation in the industry too.

Unlike most competitors, Endowus allows Singaporeans to invest in SGD, which virtually eliminates any foreign exchange risk of the investment portfolio. This is extremely critical especially during retirement phase when drawing down one's assets –  you don't want to see a huge loss in the value of your portfolio due to foreign currency fluctuation.

Funds invested with Endowus are also stored in a separate trust account in your own legal name at UOB Kay Hian, one of Asia's largest brokerage firms.

What the risks involved when investing with Endowus?

Generally, Endowus is one of the safest and most secure robo-advisors because it leverages technology and plugs into existing financial infrastructure that has already been battle-tested for decades.

The greatest risks when using Endowus may come from unauthorized investments and transactions, but these are easily mitigated.

Endowus has systematic processes and procedures in place to ensure the safety of our website and your personal information.

They store data on secure servers, where your account information is encrypted and connections between you and our servers have the highest level of security.

They also constantly audit, backup and safeguard data, and periodically run security audits of our software and systems. If you are inactive for a period of time, they will automatically log you out of your account to prevent unauthorized logins.

How much does Endowus cost?

Endowus charges an all-in access fee based on the value of assets that you hold with them.

For Core, Satellite and Income portfolios:

  • Cash portfolios are charged at between 0.25% to 0.6% annually depending on amount deposited
  • SRS and CPF portfolios are charged at 0.4% annually

For Fund Smart portfolios:

  • 0.3% annually across cash, CPF and SRS

For Cash Smart portfolios:

  • Cash and SRS portfolios are charged at 0.05% annually

These fees are close to 66% cheaper than existing solutions in the market and a difference of just 1% in fees is equivalent to over 240% of lost returns after 30 years.

The effect of fees projected over 30 years

Across all portfolios, there are no upfront sales fee and transaction fee, no lock-ups, no deposit and withdrawal fees, and 100% trailer fee commission rebate.

Wrapping up

We like Endowus for many reasons – among all the robo-advisors in the scene, Endowus is the most credible, and in our opinion, has the best investment strategy and offers investment options across cash, SRS and CPF (yes, CPF!).

The use of SGD-hedged portfolios also means that most Singaporeans can access globally diversified investment options without foreign exchange risk - this is something that's difficult to access for retail investors and something that cannot be replicated when investing using a DIY approach.

Furthermore, Endowus is giving retail investors back 100% of the sales commissions known as trailer fees so we can keep more, save more and earn more.

Sign up for an account with Endowus using this link and invest at least $1,000, and you will get $20 in Access Fee credit (equivalent to $10,000 advised free, assuming Access fee of 0.40%).

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