How does SGD hedge class work in investors' favour?

Hi Anon,

No worries, I frequent here a lot, so I wont miss your post! For equities exposures, we use SGD denominated funds rather than SGD hedged funds. Effectively the FX exposure is still in the foreign currency. So what happens is that the fund managers will take your monies in SGD, buy USD with it, and transact with Vanguard to purchase the unit trust in USD. The rates which Lionglobal is doing it at is at institutional FX rate with Vanguard. The good thing is that buyers and sellers of the SGD funds will can transact at the same price, without go through the bid-ask spread for currency.

As you might know, we are doing our best to lower the total costs by rebating trailer fees so that the costs of unit trusts are lower - these funds need scale to lower costs as well, so currently it is hard for them to compete with ETFs has a larger AUM. For CPF, we are doing the best with whatever is available.

If it is hedged then there is no risk. But hedging comes with costs.
Research shows if you invest over the long term regularly at time intervals for stocks, its better to go unhedged.