Asked by Anonymous

OCBC asked me to take up a 10 year savings endowment plan and purchase funds from Lion Bank Asian Fund or Lion Bank Core Funds. Should I take this up, or invest in STI ETF + Bluechips + SSB and REITs?

I have savings of 2 years of my current salary and my only debts are a car loan and my HDB loan (less than a year left to pay). I have no investments.

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    • Jonathan Chia Guangrong
      Jonathan Chia Guangrong, Fund Manager at JCG Fund
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      Top Contributor (Feb)

      383 Answers, 543 Upvotes
      Answered on 12 Nov 2018

      Learn to invest on your own. Why take the chance of having your funds locked up in an endowment that offers uninspiring returns? Not to mention costly funds that won't lead to something decent? Buying into a few reits and ssb may potentially offer something on par if not better, returns wise, with the option to liquidate without much costs. Do examine the reits to see if they fit what you are looking for before buying into them. Hope this helps

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      • Tee-Ming Chew
        Agree on what Jonathan has mentioned. Personally don't like the idea of having my money locked for so long with little returns on them
        12 Nov 2018
    • Lim Chun Long Jimmy
      Lim Chun Long Jimmy, Biz Partner at Flagship Games
      44 Answers, 103 Upvotes
      Answered on 12 Nov 2018

      Personally, I think that you will be better off investing on your own. In addition to STI "ETF + bluechips + SSB and REITs", you may consider investing in diversified global portfolio of ETFs via a robo-advisor. Refer to the following reviews for more information:

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    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
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    Top Contributor (Feb)

    358 Answers, 605 Upvotes
    12 Nov 2018

    Evaluate them individually.

    10 year endowment vs SSB.

    Fund vs STI ETF/ Blue Chip Stocks

    REITs are a separate asset class. Can't compare with the provided recommendation.

    For the Endowment, if there are not special benefits, it may perform better than the SSB while sacrificing liquidity and a yearly coupon.

    For the funds, you'll have to go deeper into what you'll be investing in, and if you're confident in the outlook of the assets it holds.

    And also, compare the fees to acquire. Will the banker charge you a sales fee for the funds? Will this be lower than the charges for buying the ETF and stocks?

    Too little information to have a proper look for you as well. Bring up the alternative to your RM, see his response and then bring up his response and your proposal to another friend who's an investor or financial advisor. Gotta do your due diligence.

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