facebookWhat are the differences between Unit Trust vs ILP? - Seedly



07 Jun 2019


What are the differences between Unit Trust vs ILP?

Hello guys! What do you think of unit trust as investment? I've also been told by wary relatives to never do ILP (investment and insurance should be kept as two separate things). Let's keep it a beginner level discussion, coz most articles I find online are super long-winded.

Discussion (6)

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Kenneth Lou

07 Jun 2019

Co-founder at Seedly

Hey! Let me explain to you to the best of my ability: Before that, I will define what Unit Trusts are. For more info you can read here: https://blog.seedly.sg/diy-vs-active-unit-trust...

What are Unit Trusts:

These are an actively managed investment funds which are not traded on a stock market. It’s usually higher cost due to the nature of the way that a fund is managed… In this case, as seen above, like a team of analysts running behind the scenes looking to try and beat the market.


  • Potential to outperform the market
  • Easy to switch, buy and sell on online platforms
  • FundSuperMart (FSM), DollarDex, Philips Securities POEMS


  • 1.5% – 4% Management Fee paid to the fund managers regardless of performance
  • Performance strongly depends on advisors and fund manager
  • Can be complicated to understand fund fact info sheets

Examples include:__ First State Dividend Advantage Fund, East Spring Fund Franklin Templeton Bond Fund


  • Set up a FundSuperMart (FSM), POEMS, or DollarDex account
  • Note: POEMS has $0 platform fees compared to FSM’s (0.05%) but the platform interface is slightly older looking

What are ILPs:

This is one of the many ways to buy a Unit Trust. So basically if you see above, I have shared the DIY approach to buying a Unit Trust via one of the platforms described (FSM, POEMS etc). However, with ILP (Investment Linked Policies) they are more like Insurance first with investment components inside as well.

ILPs have a wide range of funds (unit trusts) for the policyholder to choose from. Some of these funds require a high initial capital to invest.

However, this is the main con - Allocation rate: The full amount of your premium will not be used to buy into investment units for your early years. This method of front-end loading ensures that distribution and administration cost is incurred on the policyholder during the early years of his policy. Read more about what ILPs are and why you should consider strongly before committing to a ILP in Singapore: https://blog.seedly.sg/investment-linked-policy...

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Jonathan Chia Guangrong

25 Oct 2018

Cybersecurity Trainee at Bank in blue

One word: avoid. No guarantee that the unit trust price will go up and continue to go up. And fees are payable even in years of negative returns. ILPs are basically insurance contracts structured around unit trusts, only with more fees involved on top of the management fees. Would rather manage my own portfolio where I can make money in any market condition

Luke Ho

25 Oct 2018

Founder and Director at CFX Money Maverick Pte Ltd

If you want a beginner level analysis - an ILP is just the wrapper held by an insurance company for ...

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