This is an affiliated post with Endowus. All views, opinions and research expressed herewith are solely mine. The intended audience of this post is for individuals who are below 55 years old. Disclaimer applies.
A while ago, I had talked about Endowus’ Fund Smart, where you can customize your own portfolio with their curated unit trust funds.
I had just created my second Endowus portfolio using SGD 10,000 (currently processing) from my CPF Ordinary Account (OA) funds, and here it is:
If you have noticed, the three mentioned funds are all equities, and you may wonder why this time I had chosen only from one asset class, since I am a believer of diversification. Well, back in May 2020 when I first introduced Endowus, a reader (thanks, Hello World!) gave me an idea of investing a portion of the CPF-OA with equities, while the remaining uninvested part would grow at CPF-OA’s 2.5%/3.5% returns per year.
I had contemplated in starting an experiment with allocating an initial SGD 10,000 from the uninvested part of the CPF-OA and make this a 50/50 equities/CPF-OA portfolio, and track its performance from there, thus creating some sort of a mini CPF-OA environment. However, it would be a bit tedious in maintaining and rebalancing it, especially with the actual calculation of the CPF interest. Therefore, this investment portion would form a sub-portfolio (along with my earlier Endowus one and vested individual shares/REITs) and form part of the overall CPF-OA universe.
These three funds combined would provide me ample geographical, sectoral and economic development stage diversification. Geographical wise, the United States took up about 33.7%, with China coming in second at around 13.0%. The United States and China were ranked first and second respectively in nominal GDP2, a metric commonly used to measure economy size, and I foresee they will continue to hold sway over the global economy. Their combined percentage of 46.7% is enough to expose the portfolio to the two behemoths, yet there is still room enough for exposure to the other economies, like third largest Japan (5.48%) and other countries like India, Australia, etc.
The sectors and industries are distributed, too, with information technology at 22.25%, financials at 18.38%, healthcare at 8.60%, industrials at 7.53%, and so on. This broad approach has an advantage of lowering concentration risk on any one sector.
For economic development stage, as pointed out in the previous section, 50% and 25% of the portfolio is allocated to developed and emerging markets respectively, with some overlap into both from the FSSA fund. On added note, the inclusion of the FSSA Dividend Advantage Fund, besides the overlapping feature stated above, is also due to the fund’s regular distributions, and its selection of companies based on their potential dividend growth and long-term capital appreciation.
Happy Lunar New Year!
Past performances of the funds stated in this post do not guarantee future results.
Click on this link and get SGD 10,000 managed free for six months (SGD 20 equivalent).
Just for the month of February 2021, you can start investing in Endowus with a minimum investment amount of SGD 888. Click on this link to start! (Terms and conditions: #1 – You must be a new Endowus client; #2 – Create an Endowus account from now till 14 February 2021 using the link; #3 – Fund your account with SGD 888 before 28 February 2021).
1 – Information obtained from the funds’ respective fact sheets dated December 2020 (accessed 11 Feb 2021)
2 – Silver, Caleb. The Top 25 Economies in the World. Investopedia. 24 Dec 2020. https://www.investopedia.com/insights/worlds-top-economies/ (accessed 11 Feb 2021)