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Adopting a disciplined approach to invest a fixed sum of our salary each month can help us start our investing journey and grow our wealth in the long term. Investing this way has two main benefits: 1) we do not time the market and 2) we are able to conveniently achieve dollar cost averaging (DCA).
Timing The Market
If we are trying to time the market, we will only invest when we think the markets are at a low or when they are going up. It’s virtually impossible for even the best fund managers and investors, let alone average investors like us, to determine when markets are at their troughs or when they are going to spike upwards.
By investing a fixed sum each month, we are just buying up high quality investments regardless of its price at any point in time.
Dollar Cost Averaging
When we invest a fixed sum of money each month, we buy up more of an asset when prices go down and less when prices go up. This way, our cost will amount to the average price of the asset.
There are several platforms in Singapore that allows us to achieve this in Singapore, we highlight 12 common platforms and its characteristics.
Regular Share Savings Plans
There are three Regular Share Savings (RSS) plan offered by brokerage in Singapore in partnership with SGX.
The POSB Invest Saver (or DBS Invest Saver) is a Regular Shares Saving (RSS) plan that offers investors two main investments – the Nikko AM Singapore STI ETF and the ABF Singapore Bond Index Fund – which are both listed on the Singapore Exchange (SGX).
We can start investing as little as $100 each month to gain exposure to the broadest investments in Singapore via these investments. The Nikko AM Singapore STI ETF is an exchange traded fund (ETF) replicating Singapore Straits Times Index (STI), giving us exposure to the 30 largest and most liquid companies listed on SGX. The ABF Singapore Bond Index Fund comprises the highest quality bonds in Singapore, issued by the Singapore government and quasi-Singapore government entities.
The OCBC Blue Chip Investment Plan is also an RSS plan allowing investors to invest in 20 blue chip counters listed on SGX, including the Nikko AM Singapore STI ETF, and also individual stocks such as ComfortDelgro, Olam International and Wilmar International.
Similar to other RSS plans, we only need to contribute $100 to start investing in some of the strongest stocks listed in Singapore.
# 3 Maybank Kim Eng Monthly Investment Plan (MIP) The Maybank Kim Eng Monthly Investment Plan is another RSS plan that allows investors to invest in 54 counters listed on SGX from $100. As you can tell, the RSS plans offered by the different brokerage firms, give their investors different options in the types of investments they can make.
* From 12 June 2019, Maybank Kim Eng no longer offers its Monthly Investment Plan (MIP).
Similar to the other RSS plans, the Phillip Share Builders Plan offers investments including 39 counters listed on SGX, from $100 a month.
Newer to the market, many robo-advisory firms offer investors a hands-off approach to long term investing via their digital platforms. They make use of algorithms to help investors invest their money, based on their risk tolerance levels, within the methodology of their platforms.
# 4 StashAway
StashAway primarily invests in exchange traded funds (ETFs) listed around the world to give investors greater diversification into equities, bonds, commodities and even convertible securities. It also does not have a minimum amount for investors to start using its platform.
StashAway uses a proprietary investment strategy based on theory of economic cycles, Economic Regime-based Asset Allocation, or ERAATM, enabling it to monitor economic trends and valuations to rebalance its customers asset allocation mix for the long-term.
If you’re keen to try out StashAway, it is currently offering 50% off its management fees for 6 months, for up to $50,000 in portfolio value. You can sign up here.
# 5 AutoWealth
Autowealth offers investors global exposure mainly through ETFs listed in the US. AutoWealth portfolios track the MSCI World Index and the Citigroup World Government Bond Index – which are transparent and global indexes respectively.
While AutoWealth has a minimum initial investment of $3,000, you can opt to go on a monthly investment plan as well.
If you’re interested to give AutoWealth a try, be sure to use the promo code ‘DollarsAndSense‘ to receive a $20 top-up into your account once you fund it with the $3,000 minimum.
# 6 Smartly
Smartly’s portfolio comprise a universe of over 20 exchange traded funds (ETFs), invested in equities, government bonds, corporate bonds, commodities and real estate. Investors can start investing on Smartly’s platform with a minimum deposit of $50, and can subsequently invest any amount they feel comfortable with.
Syfe is a new Singapore-based robo-advisor that launched in July 2019. The cornerstone of their investment approach is a focus on managing risk, with the aim of attaining better risk-adjusted returns across all market conditions. You can fund your investment account in either SGD or USD, in either a lump sum or regular monthly payments. There are no minimum investment amounts and no minimum lock-in periods.
If you’re interested to give Syfe a try, you can now get $10 added to your portfolio for every $1,000 invested with Syfe, up to a maximum bonus of $100, which will be invested to your investment portfolio within 7 days after receiving your funds. To enjoy this promotion, you will need to maintain the portfolio with Syfe for at least 3 months. You can read more details on the promotion here.
Mutual Funds / Unit Trusts
There are also platforms that allow us to invest in mutual funds and unit trusts on a monthly basis. Typically, these are managed by an active fund manager seeking to beat the market. However, there are also certain mutual funds or unit trusts that are passive investments tracking indexes.
DBS Regular Savings Plan (RSP) allows us to invest in mutual funds with underlying assets in equity, bonds and alternative investments, as well as exchange traded funds (ETFs), on a monthly basis. We can start investing from as little as $100 a month.
On its platform, we can choose to invest using cash, our CPF funds or our Supplementary Retirement Savings (SRS) account. We can also search for funds to invest in if we know the fund name, or if we want to invest with a certain fund house or on an investment theme.
Apart from its Share Builders Plan, Phillip also offers a Unit Trust Savings Plan. Investors can choose to invest in up to 400 funds from as little as $100 a month. They can also make use of their CPF or SRS funds to make these investments.
# 10 FSM MAPS
On FSM Maps, we can also start investing via a regular savings plan from as little as $500 a month. Investors can choose from five different risk level, ranging from conservative to aggressive, as well as whether they prefer a growth or income portfolio, based on their investment objectives and risk tolerance.
FSM MAPS is able to give investors an exposure to a diverse range of unit trusts and ETFs globally.
# 11 dollarDEX
DollarDEX offers two types of monthly investments – a regular savings plan and a value averaging plan. DollarDEX allows investors to invest on their own or via five recommended portfolios, again ranging from conservative to aggressive.
On its regular savings plan, investors can invest similar to the other types of investments by contributing a regular investment of at least $100 each month. On its value averaging plan, the amount invested is not fixed. Rather, it is tied to a target growth rate and fluctuates based on how well or poorly the fund performed in the previous month. This way, investors will hit their portfolio size at the end of their target investment period.
# 12 Endowus
Endowus is an independent fee-only platform that aims to help Singaporeans grow wealth by investing systematically, in share classes that were only previously available to institutional investors, managed by top global investment firms such as Dimensional and PIMCO.
They create customised portfolios for investors by making the asset allocation and portfolio construction decisions using data-drive and institutional asset allocation framework. They apply quantitative and qualitative screening to find funds that have outperformed over the long-term.
# 13 MoneyOwl
MoneyOwl, a social enterprise between NTUC Enterprise and Providend, dubs itself as Singapore’s first bionic financial adviser.
MoneyOwl offers five model portfolios – Equity, Growth, Balanced, Moderate, and Conservative – made up of funds managed by Dimensional Fund Advisors. These five portfolios are based on your risk appetite and are made up of differing weightage in three Dimensional equity and bond funds.
# 14 Financial Advisers
Aside from the above platforms, you can also invest a fixed monthly sum through products offered by your financial adviser(s). Also known as investment-linked policies (ILPs), your money can get invested with a range of funds offered by the insurer. You’ll need to take time to understand how the ILP you’re considering works, especially the loss you would make if you surrender your policy early.
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