Asked on 23 Jul 2020
Looking to DCA via RSP as FSMone offers quite attractive rates for RSP but understand that roboadvisor is known for their low cost so is it really true?
Hello TY, I think you could start by working out the percentage of fees you would be paying for both options.
Assuming that you are looking to invest into VOO (Vanguard S&P 500 ETF) via FSMOne, take note that the min amount for the RSP monthly will be $50 and also the cost per RSP transaction will be 0.08% of the RSP amount or SGD $1, whichever is higher.
As opposed to Syfe's equity100 portfolio, there are no fees for every transaction (buying, selling, auto-rebalancing, etc.). However, you will be charged a management fee of 0.65% per annum out of your total value of assets under management (AUM) for AUM <$20,000.
At the end of the day, it boils down to the amount that you are going to be contributing for each DCA and with that, you can then work out the costs and see which is better for you.
Hope this helps!
For Syfe you will be paying an increasing amount the longer you stay invested in them. That is because they will charge a percentage of your total holdings with them means effectively your cost will be compounded over time. However, the added benefit is that you will not need to worry about portfolio rebalancing as Syfe will help you with that based on how they view the market conditions.
For RSP via FSM, you will need to invest at least 50 dollars for each etf you select in their denominated currency. Meaning to say if you want to buy the S&P 500 etf on FSM it will be at least 70~ SGD per month. If you are an investor who is just starting out and do not have much capital for investment the cost of investment per month will be more taxing on you should you choose more than 3 ETFs however you do save on the fees in the long run significantly.
Of course do take note that you might want to invest more than 100 per etf in order to keep the commision fees below 1% of your invested amount but that is just my suggestion to you.
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