Robo Advisors Singapore Market

My Thoughts on the Endowus Launch of Amundi Low-Cost Passive Index Funds for CPF

Calvin Lo

Endowus just had a webinar for the launch of 2 low-cost passive index funds by Amundi asset management for CPF investment. Note that these 2 funds were already available for cash and SRS investment. The 2 funds are:

  • Amundi MSCI World Index Fund – tracks the MSCI World Index, TER 0.10%
  • Amundi Prime USA Fund – tracks the Solactive US Large & Mid Cap Index, TER 0.05%

Here’s the announcement by Endowus: Amundi low-cost passive index funds now available for CPF, exclusively on Endowus Fund Smart

Here’s a video recording of the launch event:

You can use my referral link to sign up for an Endowus account, and we’ll each get S$20 Endowus Fee credits when you invest S$1,000.

Key points from the presentation

  • Amundi chose the Solactive US Large & Mid Cap index for Prime USA fund due to lower cost vs S&P 500 index, also covers large/mid cap US stocks very similar to S&P 500 index, and has very close correlation ~0.99
  • These 2 Amundi funds are the cheapest funds in Singapore market for CPFIS and even when compared to Singapore SGX-listed ETFs
  • Endowus uses funds instead of ETFs because funds have no bid-ask spread, trades on NAV once a day
  • Whether to invest your CPF OA is up to individual, but generally stocks outperform 2.5% CPF OA interest rate over the long term
  • These 2 Amundi funds are currently only available on Endowus Fund Smart (customisable portfolio)
  • Endowus Core Flagship CPF in the works, expected late April

My thoughts

Endowus x Amundi opening up these 2 broad market funds for CPF investment at such low cost is a very attractive proposition and definitely worth considering in my opinion. Amundi Prime USA fund has very low cost TER 0.05% which is impressive for Singapore market, which unlike the US market doesn’t really have low-cost options like Vanguard funds.

Note though that Endowus charges an all-in platform fee of 0.3-0.4%. There are no other fees on Endowus side, i.e. no sales fees. Also, Endowus gives you back 100% cash back on trailer fees.

When looking to invest on a platform, I usually to do my due diligence on the platform provider as well, in this case Endowus. In the news, Endowus recently announced laying off 10% of staff, citing a “sharp pullback in financial market and tech sector”.

In October 2022, Endowus also acquired a majority stake in wealth manager Carret Private to expand to Hong Kong. Overseas expansion will inevitably require cash burn, and with funding tightening up I’m wary of how this might affect Endowus’ financials. Endowus is still privately-held so we can’t have any insight into its financials.

Endowus has been around since 2017 so a little over 5 years, and is currently the only digital advisor in Singapore you can invest CPF funds with. That in itself being approved by MAS for CPF investments doesn’t mean that Endowus is safe, so do keep in mind that you’re taking on more risk by investing your CPF.

Finally, I think these 2 Amundi funds on Endowus offer a great proposition for investing CPF OA funds. With passive index investing, cost is probably the most important factor in reducing tracking error against its benchmark. Even small savings in costs can compound over the very long term, in this case for CPF, until retirement and beyond.

Personally, I’m currently invested with Endowus using SRS in Cash Smart. My initial intention was to invest into the Core Flagship portfolio (which also holds the Amundi Prime USA fund), but I think these 2 funds are also worth considering if you’re looking for a more DIY approach through Fund Smart.

What do you think of these 2 Amundi funds for CPF?

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Disclaimer: This is not financial advice. I am not professional financial advisor nor do I work in the finance industry. Anything I write here is purely my personal opinion. Please do your own research and due diligence before investing into anything. All investments come with associated risks. Best to consult a financial advisor if you’re still unsure.

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