facebookWhich is better for higher returns StashAway vs Syfe Vs Endowus? I have read most of the comparison here but if all factors aside (fees etc), which platform can offer the highest returns? - Seedly

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Anonymous

17 Apr 2021

βˆ™

Robo-Advisors

Which is better for higher returns StashAway vs Syfe Vs Endowus? I have read most of the comparison here but if all factors aside (fees etc), which platform can offer the highest returns?

I am risk taker and I hope to optimise the returns I get from taking the highest risk. Many have compared syfe equity 100 with StashAway 36%. I am curious which is better for higher returns in the long term? Thanks in advance!

Discussion (2)

What are your thoughts?

Zac

Zac

17 Apr 2021

Noob at Idiots Invest

You can check out this thread, it's pretty new and you may not have read it. I'll paste my answer down below anyway.

If you really have read most of the comparisons on this forum, I don't think you would be asking about "which has the higher returns in the long term" because you would know that (1) there is a lot more to picking a platform than just the returns and (2) the past performance or back-calculated returns is no indicator of future returns.

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I would go with Endowus because I am most aligned with their investment philosophy, which is (amongst other things) to invest in low-cost and diversified portfolios. There are also plenty of small plus points about Endowus here and there which I think many people aren't aware of? But overall they really add up.

Fees

A lot of people hype up Syfe for low fees but in honesty, Endowus' fees are pretty competitive too. For cash advised portfolios, Endowus charges a tiered access fee starting from 0.6% which gets stepped down with increasing AUM (illustrated on their website).

  • Note that the access fee (aka annual management fee) is separate from the fund-level fee (aka the fund management fee). You pay Endowus an access fee for advising you where to put your money. You pay the fund manager a fund-level fee for investing your money.

  • You might find other digital platforms have marginally cheaper fees. However, understand also that other platforms invest your money in fundamentally different instruments - so it's not an apples to apples comparison. Rather, you need to decide what you want in your portfolio. Fees are important but frankly, they aren't the end-all. Endowus also makes sure that the portfolios they offer are low-cost and efficient.

  • What's special about Endowus is they rebate this thing called the trailer fee. So if a fund manager pays them a commission to sell you a product, Endowus will arrange for the commission to be refunded to you so effectively, you're only paying the fund management fee.

Funds vs ETFs?

Many will go with Syfe and StashAway because the underlying assets vested in are ETFs.

  • The thinking is that ETFs are cheaper than unit trusts - which, on the surface, is generally true. ETFs tend to have lower TERs than funds.

  • However, Endowus-selected funds are all SGD-denominated so you save on FX fees/risk and this is one of the things about Endowus which I feel is under-rated and less well-known - which at the same time makes a big difference especially for fee-conscious people.

  • Also, worth noting that some of the funds Endowus invests in are actively managed and this may explain higher fees as compared to ETFs which are passive. As for the active vs passive management, it's not a blanket rule that passive beats active - it depends on which markets you're looking at. So overall, there is good justification for paying certain fees to invest in actively managed assets. Btw I should mention Endowus has done a lot of due diligence to select quality fund houses whose offerings are aligned with their investment philosophy so it's really a very client-centric approach.

  • Also, ETFs may have hidden layers of fees which many are not aware of. For example, US-domiciled and Ireland-domiciled ETFs are subjected to dividend withholding taxes.

ESG

Endowus has also incorporated ESG investments into their offerings so that's a major bonus for investors looking for sustainable/ethical investing.

Ownership of Assets/Fund Safety

Also, it's useful to know that your investments and funds are held in a custodian account with UOB Kay Hian - so the underlying assets that you've invested in are actually held in your name.

This is important because in the event that Endowus goes insolvent or closes down (choy!) your assets belong to you and won't be used to pay their liabilities, which I think is an extremely important factor to consider.

Customer Service

I find Endowus is very responsive with client assistance too, so that's always a plus.

Client Education

For many of us, the reason why we go with a digital platform is because we don't know much about investment and so we look to advised solutions. Recognising this, Endowus also endeavours to educate its users through writing articles on personal finance, investment and behavioural finance (arguably one of the most important concepts in investing). I've found their webinars quite helpful too.

Given the above points, I was convicted to go with Endowus. Hope this was helpful information for you.

Full disclosure: I found all this information from reading Endowus' website because I invest with them.​​​

thefrugalstudent

thefrugalstudent

02 Mar 2021

Founder at thefrugalstudent.com

Hi Anon,

The most straightforward answer is that nobody can tell you that for sure. If they say they can, they are lying. It's just not possible to know which will produce the highest returns in the future.

Everyone will have their preferences and their beliefs, but just because they believe 1 will perform better than the other doesn't mean that it will. I personally don't think that there will be much quantifiable difference in performance between SA 36 and Equity100, which is why many people use fees as a deciding factor. Other people also use investment philosophy or UI/UX.

At the end of the day, you shouldn't go wrong with any of your options. I'd suggest not to stress over trying to find out which can theoretically produce the best returns and just pick 1 that you like using/have conviction in and stick with it for the long run. That will be the true determinant in whether or not you will be able to build wealth.

Hope this helps & all the best!

Regards,

thefrugalstudent

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