facebookEndowus has recently launched Endowus Fund Smart. What are some of the advantages of this and how can I invest like an institutional investor now? - Seedly

Anonymous

21 Jan 2021

Robo-Advisors

Endowus has recently launched Endowus Fund Smart. What are some of the advantages of this and how can I invest like an institutional investor now?

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Zac

21 Jan 2021

Noob at Idiots Invest

That's a really good question.

Regarding the advantages of Fund Smart, here are a few:

  • Curated. Endowus has done the legwork in selecting the best few funds with lower fees, better risk-adjusted returns, etc. You can read more on their website under Fund Smart FAQ. It really is quite user-friendly and easy to navigate.

  • Lower fees than investing in unit trusts yourself. This is self-explanatory. Endowus rebates trailer fees (a fee paid by the fund house to the broker/agent for selling their fund) to you so they literally don't earn "commission" for selling you any particular fund.

  • Fund houses. Endowus has partnered up with very good fund houses in the asset management industry (Dimensional, LionGlobal, Franklin Templeton, etc) and this saves you time and trouble of searching for good fund houses yourself. You can read up more about why the particular fund was included in Fund Smart under "Fund Rationale" when you're selecting a fund to invest in.

As to how you can "invest like an institutional investor now" - I'm not sure what your concern is, so maybe you could offer some details.

But Endowus' own recommendations for Fund Smart usage are that you should use an Endowus-advised core portfolio to gain exposure to the global markets. This ensures proper diversification and risk-management. Thereafter, you can use Fund Smart as a satellite portfolio, to gain additional exposure to a specific country/market/sector that you wish to.

Bear in mind that Endowus is a proponent of the efficient market hypothesis, so their investment philosophy is to capitalise the efficiency of markets, minimise risk and capture market-like returns for the long term. If your notion of an institutional investor is a hedge fund manager that aims to generate higher returns than the market, this may not be the instrument of choice.

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