Both ETFs and unit trusts pool investor money into a diversified portfolio. They differ on how they're priced and traded, what they cost, and how you buy them — and these differences add up over decades.
| ETF | Unit Trust | |
|---|---|---|
| Pricing | Intra-day on stock exchange | Once daily at NAV |
| Typical expense ratio (broad market) | 0.03% – 0.20% | 0.50% – 1.50% |
| Sales charge / front load | None (only broker commission) | 0% (Endowus) to 5% (bank platforms) |
| Where to buy | Any brokerage (IBKR, Tiger, Webull, DBS Vickers, etc.) | Endowus, FSMOne, banks, robo-advisors |
| Min investment | 1 share (~S$50 – S$500) | S$100 – S$1,000 |
| Dividend handling | Paid as cash; manual or DRIP reinvest | Reinvested into the unit price (accumulation classes) |
| Tax in Singapore | No CGT; foreign dividend WHT varies | No CGT; foreign WHT applies internally |
| CPF / SRS eligibility | Limited — only ~6 ETFs approved under CPFIS-OA | Over 100 funds approved under CPFIS |
| Number of holdings to choose from | Thousands listed globally | Hundreds available on SG platforms |
| Liquidity risk | Bid-ask spread widens on thin SGX-listed ETFs | Daily NAV dealing — no spread |
| Dividend class options | Distributing or accumulating versions | Distribution or accumulation classes |
For cash investing, ETFs win the cost battle nearly every time — Irish-domiciled funds like CSPX or VWRA at 0.07% – 0.22% TER are the modern default. For CPF and SRS, use Endowus's no-sales-charge unit-trust platform to avoid bank-distribution markups. Either way, avoid bank-platform unit trusts loaded with 1% – 3% sales charges and 1.5%+ TERs.
CSPX (S&P 500), VWRA (global all-cap), IWDA (developed markets), EIMI (emerging markets), AGGG (global bonds). These are listed on the London Stock Exchange and are popular because Irish domicile cuts US dividend withholding tax from 30% to 15%.
Endowus negotiated 'institutional share class' access to many unit trusts and passes the saving to retail clients. They charge an advisory fee (0.25% – 0.60%) but no sales charges and use the institutional TER of underlying funds. Net of fees, the all-in cost often beats traditional bank unit-trust distribution by 1% – 2% per year.
Yes, via any brokerage that offers US market access. Be aware of the 30% US dividend withholding tax (vs 15% for Irish-domiciled equivalents) and potential US estate tax exposure above the threshold — many SG investors prefer Irish-domiciled alternatives for these reasons.
Only a short approved list under CPFIS-OA — currently around six, including the SPDR Straits Times Index ETF, the Amova (formerly Nikko AM) STI ETF, the ABF Singapore Bond Index Fund, an SGD investment-grade corporate bond ETF, an Asia ex-Japan REIT ETF and SPDR Gold Shares. Note that gold and ETF products are capped at relevant CPFIS sub-limits, and you must keep the first S$20,000 of your OA uninvested before you can invest the rest. For wider equity exposure with CPF, unit trusts remain the only practical route.
For members aged 55 and above, no — from early 2026 the CPF Special Account was closed and its balances were swept into the Retirement Account (up to the Full Retirement Sum) and the Ordinary Account. Members under 55 can still invest OA savings (above the S$20,000 floor) into CPFIS-approved unit trusts, but SA monies earning the guaranteed floor rate generally should not be moved into lower-yielding funds.
Both ETFs and unit trusts often come in two flavours. An accumulating (Acc) class reinvests dividends automatically inside the fund — simpler and tax-light for long-term compounding. A distributing (Dist) class pays cash dividends to you, which suits investors who want income. For a long accumulation horizon, the accumulating class avoids the friction and FX cost of manually reinvesting each payout.
No. Real ETFs carry tracking error — the gap between the fund's return and the index it follows, caused by fees, cash drag, sampling and currency hedging. It is usually small for large broad-market funds, but on thinly traded SGX-listed ETFs the bid-ask spread you pay on the way in and out can quietly cost more than the headline expense ratio.