Pooled investment fund managed by a professional, valued daily at NAV. In Singapore, unit trusts often carry 0.5%–2% expense ratios + sales charges.
A mutual fund is a pooled investment vehicle that takes money from many investors and uses it to buy a diversified portfolio of securities — stocks, bonds, or both. In Singapore the equivalent product is usually called a Unit Trust.
Each investor owns 'units' that represent a proportional share of the fund's holdings. The fund is priced once a day at the Net Asset Value (NAV) — calculated by summing all assets, subtracting liabilities, and dividing by units outstanding.
Active: a fund manager picks securities, trying to beat a benchmark index. Expense ratios typically 1% – 2% per year, plus possible front-load sales charges of 1% – 5% in Singapore.
Passive (index): mechanically tracks an index. Expense ratios usually 0.20% – 0.80% for Singapore unit trusts, much cheaper than active.
Active fund track record: SPIVA reports show that 70% – 90% of active funds underperform their benchmark over 10 – 20 year horizons. After fees, indexing wins more often than not.
FSMOne (Fundsupermart) and POSB Invest-Saver: classic broad platforms offering hundreds of unit trusts with up to ~0.75% platform fees. Most still charge sales loads.
Endowus Fund Smart: no sales charges, no platform fee on top of underlying TER. Disrupted the unit trust distribution market in Singapore.
Bank platforms (DBS, OCBC, UOB) — typically charge a 1.5% – 3% sales load, less competitive vs Endowus.
CPFIS-approved unit trusts: invest CPF OA or SA into select funds. Quality varies widely; most underperform the 2.5% / 4% CPF guaranteed rate after fees.
Pricing: unit trusts price once daily at NAV. ETFs trade intra-day on exchange at market prices.
Cost: ETFs typically cheaper for index strategies. Active unit trusts have no ETF equivalent in many niches.
Tax: not a major issue in Singapore (no capital gains tax). Matters more for cross-border investors.
Accessibility: ETFs require a brokerage account; unit trusts can be bought via banks, robos, and dedicated platforms with friction-free SGD funding.
Recommendation for most investors: ETFs for broad-market exposure; unit trusts only for asset classes (specialised credit, emerging-markets value) where the right ETF doesn't exist.
Functionally identical — pooled investment vehicles holding diversified securities. 'Mutual fund' is the US term; 'unit trust' is the Commonwealth term used in Singapore. Both price once daily at NAV.
Mixed. Through bank platforms with 1% – 5% sales charges and 1.5% – 2% annual fees, usually no. Through Endowus's Fund Smart platform (no sales charges, institutional fund classes), unit trusts are competitive with ETFs especially for asset classes that lack good ETF equivalents.
Yes. CPFIS-approved unit trusts can be bought with CPF OA (above S$20,000) or CPF SA (above S$40,000). SRS can fund any approved unit trust. Endowus is the most cost-efficient platform for both.
Passive (index-tracking) almost always wins after fees over 10+ year periods — SPIVA data consistently shows 70% – 90% of active funds underperforming their benchmarks. For most Singapore investors, passive ETFs or low-cost index unit trusts on Endowus are the default.