Asked by Anonymous

Who pays for the spread and expense ratio if you invest in robo advisors like Stashaway? I understand they charge a 0.5% management fee, are there hidden costs like the spread and expense ratio that Stashaway is not making clear to investors?

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  • Ha Luong
    Ha Luong
    Level 1. Freshie
    Answered on 19 Apr 2018

    Hi there,

    I'm with StashAway and I'd like to address your questions.

    Regardless of what platform used to buy an ETF, the spread and expense ratio are borne by the buyer. Expense ratio is charged before gains (dividends/ increment in Net Asset Value of the fund) are distributed back to investors. Spread, on the other hand, is incurred when the ETF is bought. It's a very small amount (at StashAway, it ranges within 0%-0.03%).

    The management fee starts at 0.8% per annum for the first S$25,000 and goes down as the total AuM increases. If you invest in SGD, it will be converted to USD at the spot rate, with 0.1% spread by our broker, Saxo. If you invest in USD (minimum US$10,000 due to high processing fees by the banks), there will be no currency conversion fees.

    If you have other questions, please feel free to reach out to our team at [email protected]/ +65 6248 0889.

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