facebookWhat are the “Actual” costs involved when buying DFA funds and using the possible CPF option? - Seedly

Rajiv Rai

17 Jan 2020

CPF

What are the “Actual” costs involved when buying DFA funds and using the possible CPF option?

I understand that MoneyOwl (for their Equities portfolio) has a total fees charge of appx 1.21% (Fund expense+Advisory Fee+PlatformFees). Is that it? Are there dividends withholding tax that we need to factor in? I understand that the funds are domiciled in Ireland and that might attract a 15% withholding tax. If so, how much does this increase the actual costs up to ? From a lay perspective, how much of $1k per month will be “eaten” up by such costs? What about using CPF in the near future?

Discussion (7)

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Endowus only provides DFA and PIMCO for cash and SRS. For CPFIS, they offer other products, not DFA.

This is probably a regulatory issue, so until they clear DFA with CPF, I think it is unlikely that MoneyOwl would be able to offer DFA for CPFIS as well.

As for withholding tax, I recall that both have worked with DFA to structure the funds to be Ireland domiciled, so withholding tax should not be an issue.​​​

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Shengshi Chiam, CFA

16 Jan 2020

Personal Finance Lead at Endowus

Hi Rai,

Just to share, Endowus is the only digital platform that can use CPF OA monies for investments. Also, I want to highlight that dividend withholding tax is not just on the US securities, but also for other countries securities as well. Irish domiciled funds are the most tax efficient way to hold investments in a globally diversified fund.

Hope this helps!

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