Is this the most cost-efficient way to invest in the US stock market?

I want to regularly invest in the US stock market (specifically the S&P 500) and I found out about FSM One. They allow users to invest in the iShares S&P 500 ETF but it is in USD currency and the fee is USD$1. I plan to invest SGD$350 every month so the fee isn't that much percentage wise, however, there is FX conversion which is a risk.

I want to know if this is the most cost-efficient way in Singapore to regularly invest in the S&P 500. Looking forward to hear from those who have done this!

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Benjamin Seah

28 Mar 2020

I'm in the same position as you! I'm looking to invest in S&P 500 and I was considering between FSMOne, Interactive Brokers, and kristal.AI.

FSMOne's RSP is one of the cheaper alternatives for investors with lower capital, and I think it is great if you want to DCA monthly. However, I noticed that they do have a bunch of hidden fees, which made me less inclined to invest on their platform.

I have also seen Interactive Brokers as a frequently recommended online brokerage for individuals looking to invest in the US market due to their comparatively lower fees. They have really low trading fees, but they do have a monthly account management fee of US$10 if your account is under $100K, but it is US$3 for individuals under the age of 25. One thing I have read though, is that IB's FX rates are really good, which is another reason why people go for them! I still think this is better suited for investors with more capital, as the monthly fees can add up.

After much consideration I chose to go for kristal.AI. The first $50k of investments are free up to 25 transactions. Note that there is a minimum sum required for each transaction, which varies based on ticker. If you are looking to invest SGD$350 you can look at the IVV and SPY tickers available on their platform, whose minimum is around USD$245. Ireland-domiciled S&Ps such as CSPX have a minimum of US$2K+.

If you decide to use kristal.AI, you can pm me for a referral code if you are comfortable with it! Else I do hope you manage to find a method that works for you. :)

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CH

28 Mar 2020

I don't use FSM or any of those unit trusts platforms providers, so I am sharing what I would look out for.

You also need to ask whether are there any dividend handling charges, dividend withholding tax, custodian fees, platform fees, management fees etc on top of the $1 fee.

Usually I find these platform providers are not exactly transparent in their disclosures.

S$350 is about US$245 at current exchange rate. which not even get 1 share of ishares S&P500 (or IVV as many know it as). so you need to ask if FSM allow fractional shares.