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Anonymous

28 Feb 2021

Robo-Advisors

Which robo-advisor would you recommend between StashAway, Syfe and Endowus?

Deciding between StashAway, Syfe and Endowus. (Investing using cash only)?

Discussion (7)

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Zac

28 Feb 2021

Noob at Idiots Invest

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.

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

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Randy

27 Feb 2021

Financial Analyst at

Just giving out my opinion, I use stashaway 36% and syfe REIT+ for disclaimer. For me, Robo companies need to beat a simple DIY portfolio since I can also deposit the money in my brokerage account and buy simple (lets say) 100% SPY, or 50% SPY and 50% QQQ. As long as this happens, I really am not bothered by how many % they beat the benchmark, no one is mad when we all making money :)

Every portfolio has a story, and I have more conviction in what stashaway invests in (asian equity, china internet, they recently include ESG etf).

For syfe, the main letdown for me is that the syfe100 said it uses smart beta, but when I look at the portfolio, I feel like the portfolio has no story and strategy at all, they put their eggs on seemingly all possible baskets. Oh and yes, it is not smart beta at all. Smart beta portfolio should have big portion to “rewarded factors” such as size, quality, momentum, low volatility, etc. But no, around 65% of them are in 3 etf (you can google the term “closet indexer”) and the rest spread across sectoral etf.

Endowus, just invest your cpf with them la, no need the spare cash. For me, they are like fund-of-funds. The endowus fee is competitive but the underlying fee for sure is wayyyy more expensive than etf.

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