Thinking of choosing Fund Smart at Endowus, anyone does this? If yes, what funds are you investing and why? Thank you!?

Hi Anon,

Even before you look at the funds available on fund smart, the features of the platform, and the projected returns of the funds, the most important thing for you is to take a step back, and consider this:

What do you want to achieve by having your own DIY portfolio?

Some people would want to have a portfolio that is overweight on certain geographies, sectors, as what Gabriel has done below. Some people may want to invest more to certain investment styles or fund managers.

There is no right or wrong to that. But you have to know what your investment purpose and pen it down before you look at the choices, if not you might forget what you are initially using the platform for.

Because we get emotional and reactive during the act of investing, for the vast majority of investors, it is simpler to just set your investment plan to automatically invest and forget it. This is best done through our advised portfolio which is globally diversified and low cost.

Hope this helps!​​​

Hey Hui Lun, congratulations on starting your investment journey with Endowus! I did build a portfolio using Fund Smart on top of the advised portfolio. Happy to share, just take note that it's not a recommendation and be sure to do your due diligence.

To start, here are the portfolios that I have with Endowus.

1) Cash Advised Portfolio

This is their advised portfolio, so I wouldn't go into the details. I'm on the 80% equities and 20% bonds, started this portfolio on 5 June 2020 with a monthly DCA of $200.

2) Greater China & Asia

This portfolio is constructed using Fund Smart and as the name suggests, it is tilted towards China and Asia. Likewise, it's on 80% equities and 20% bonds. I started this portfolio on 6 October 2020, have not added additional funds yet.

The portfolio consists of the following funds:

• FSSA Regional China Fund (50%)

• FSSA Dividend Advantage Fund (10%)

• Nikko AM Shenton Global Opportunities Fund (10%)

• Eastspring Singapore Select Bond Fund (10%)

• PineBridge Asia ex Japan Small Cap Equity Fund (5%)

• LionGlobal Infinity Global Stock Index Fund (5%)

• UOB United Singapore Bond Fund (5%)

• LionGlobal Short Duration Bond Fund (5%)

3) Trade War

This portfolio is constructed using Fund Smart as well and it is focused on the two powerhouses, US and China. It's on 100% equities and I started this portfolio on 16 October 2020, and I have added in $200 so far when it dipped.

The portfolio consists of the following funds:

• Franklin U.S. Opportunities Fund (50%)

• FSSA Regional China Fund (50%)

4) Federal Reserve

This portfolio is also constructed using Fund Smart, just to try out the cash management services. It's on 100% fixed income, no money market funds.

The portfolio consists of the following bond funds:

• LionGlobal Short Duration Bond Fund (40%)

• Fullerton Short Term Interest Rate Fund (40%)

• UOB United SGD Fund (20%)

I'm by no means an expert in choosing funds or building portfolios but some things that I looked at was (1) country and sector allocation, (2) total expense ratio of the fund, (3) index that it tracks, and (4) track record thus far. Of course, past performance should not be taken as an indication of future performance. You can view these information on the Fund Rationale page https://endowus.com/investment-funds-list

If you're keen on building an ESG portfolio, you can consider the following funds (1) FSSA Regional China Fund, (2) First Sentier Bridge Fund, and (3) Templeton Shariah Global Equity Fund. If you're looking to build a portfolio that tracks the S&P500 and MSCI World Index, you can consider (1) LionGlobal Infinity US500 Stock Index Fund and (2) Lion Global Infinity Global Stock Index Fund. I understand that these 2 funds are exclusively available on Endowus.

On a side note, I attended their webinar where they shared more details on Fund Smart, and during the webinar, they shared that clients are recommended to adopt the advised portfolios as the core allocation of wealth and consider using Fund Smart on top of the advised portfolios, instead of vice versa. You may watch it here https://www.youtube.com/watch?v=TACkYl3zoGE

I also wish to reiterate the importance of selecting an appropriate risk index (a mixture of both equities and bonds) based on your risk appetite. While (supposedly) a portfolio with a higher risk index (higher equities, lesser bonds) will offer better returns, it comes with higher volatility as well, and emotions are often the reason why we lose money. If you find yourself constantly checking your portfolio and panicking when the value drops, then you should probably consider changing to a lower risk index (higher bonds, lesser equities). There is no point investing in a high-risk portfolio if you can't stomach the potential dips and volatility (and possibly decide to sell at the wrong time to "cut loss") to get that higher returns. Historically, it has been shown that markets go up over the long run so stay cool and stay invested, ignore the short-term volatility and noise.

To end off, here's the performance of the various portfolios thus far and just a reminder to do your own due diligence. Take note that the performance of the portfolios is affected by the timing of entry and risk profile, and thus shouldn't be used for a one-to-one comparison.

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