Should I continue with IFAST unit trust with CPF OA?

I started without any investment knowledge. By a friend's introduction, I met her long time friend and agent, opened an IFAST account 2 years ago (at age 42). The ideas is to get better return than CPF OA interest for at least 13 years. The agent advised me on the funds to put in based on the assessment, and as a diversified portfolio. Only later I found out about the 3% upfront sales charge.

2 years has passed. By lump sum and monthly RSP $1000, I have invested $47,250 for a portfolio value of $50,397. That's a profit of $3147 (6.66% for 2 years)

Based on the portfolio data:

Aberdeen India Opportunities - 3.08% profit
First State Bridge - 6.28% profit
Schroder Asian Growth Fund - 12.90% profit
Schroder Multi-Asset Revolution Cl A - 6.53% profit

The overall result looks better than CPF OA will get, but now I also aware of the sales charge. Should I continue with the RSP or are there better investment options with the CPF OA?

1

Discussion (1)

What are your thoughts?

Learn how to style your text

Hariz Arthur Maloy

15 Aug 2018

Independent Financial Advisor at Promiseland Independent

The sales charge will soon go down to 1.5% in October 2018. And then to 0% in October 2019.

If the portfolio is doing fine, has a good risk adjusted return, plus a positive market outlook, you can continue.

It's very easy to beat 2.5% for OA. Another thing to check is if you are holding a Wrap Account with your advisor. This is a payment every year for managing the portfolio. It allows for free fund switches and rebalances.

Reply

Save

Write your thoughts