You will compare the 20-year outcome of four managed options using your own amounts and their real charges.
Everything in this course comes down to one table. Wei Ling has four ways to invest the same money: keep buying her fund at the bank, buy the same fund on a platform, use a robo-advisor, or buy an index fund herself. Each has been explained, costed or tested in earlier modules. This project puts them side by side over 20 years, using her own amounts and their real charges, so that the choice rests on numbers she has checked.
You will do the same with the options you are actually weighing. Wei Ling's version is shown as a worked example, with figures made up for the example.
The brief: compare the 20-year outcome of four managed options, using the same starting sum, the same monthly contribution and the same return before costs for all four. Show each option's ending value, its total cost over 20 years in dollars, and how far it falls behind the cheapest option. Then note what each option gives you for its price.
You need the spreadsheet you built in lesson 7.3, Model one-off and yearly costs together, and the charge figures from your earlier work: the charge sheet from lesson 2.4, the two-channel comparison from lesson 3.4, and the robo comparison from lesson 4.4.
Pick four options you would genuinely consider. A useful set covers the main routes this course has looked at: a unit trust sold by a bank, the same fund bought on a platform, a robo-advisor portfolio, and an index fund or ETF you buy yourself. If you would never consider one of those, swap in something you would, such as a second robo-advisor.
Wei Ling's four are her bank fund, the clean class of the same fund on a platform, Arjun's preferred robo portfolio from module 4, and a world equity ETF bought monthly through a brokerage account.
For each option, enter two numbers: the one-off charge on each purchase, and the total yearly cost. Take both from the option's own documents and fee pages, the way you did in modules 2 to 4, never from an article or a comparison website, which may be out of date or may leave things out.
Wei Ling's figures, all examples. Bank fund: 2% sales charge on every purchase, yearly cost 1.75%. Platform: no sales charge, yearly cost 1.40%, the clean class's 1.00% plus a 0.4% platform fee. Robo portfolio: no sales charge, yearly cost 0.78% all in. ETF bought herself: a brokerage commission that works out at 0.3% of each monthly purchase, and a yearly cost of 0.20%.
The ETF route is cheapest on charges, but it is also the one where she does all the work: choosing, buying each month, rebalancing and keeping records.
Use the same starting sum, monthly contribution and gross return for every option. Wei Ling uses S$10,000 to start, S$300 a month, 20 years, and 6% a year before costs. As lesson 7.3 explained, the 6% is an assumption that keeps the comparison fair. It is not a forecast for any of the options.
Over 20 years she pays in S$82,000 in every column.
Use the FV formula from lesson 7.3 for each option, plus the no-cost line as the yardstick, which comes to S$171,714.31.
Bank fund: =FV((6%-1.75%)/12, 240, -300*0.98, -10000*0.98) gives S$133,809.15. Total cost against the yardstick, S$37,905.16.
Platform: =FV((6%-1.4%)/12, 240, -300, -10000) gives S$142,822.09. Total cost, S$28,892.22.
Robo portfolio: =FV((6%-0.78%)/12, 240, -300, -10000) gives S$154,833.21. Total cost, S$16,881.10.
ETF bought herself: =FV((6%-0.2%)/12, 240, -300*0.997, -10000*0.997) gives S$166,683.16. Total cost, S$5,031.15.
The total cost here means the shortfall from the no-cost line: the charges themselves plus the growth they would have earned. Against the cheapest option, the ETF, the robo portfolio is S$11,849.95 behind, the platform S$23,861.07 and the bank fund S$32,874.01.
A finished comparison is one table and a few sentences. The table has four columns and rows for one-off charge, yearly cost, ending value, total cost and gap from the cheapest. Under it, for each option, one line on what you get for the price.
Wei Ling's lines read like this. The bank fund comes with a relationship manager and yearly reviews, which so far have mostly suggested switches. The platform gives her the same fund for less but no advice. The robo portfolio decides the mix and rebalances for her. The ETF route is cheapest, but only works if she sticks to a plan without anyone checking.
She was clear that the table did not make the choice for her. What it did was put a price on each service, in dollars, over a period that matched her plans. Whether a yearly review is worth about S$9,000 over 20 years, the gap between the bank and the platform for the same fund, or automatic rebalancing is worth about S$11,850, the gap between the robo portfolio and the ETF, is a judgement only she can make. In the activity below you build your own version, with your own options and amounts, and note which service differences you would pay for.
Build the comparison, write the total cost of each option over 20 years in dollars, and note which service differences you would pay for.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).