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Sales Charge on Singapore based Unit Trusts

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forestial
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Sales Charge on Singapore based Unit Trusts

Postby forestial » Thu, 02 Oct 2008 10:00 am

I have been looking at the websites of several Singapore-based unit trust companies.

They seem to be unanimous in imposing a Sales Charge of 5% on any investment in their funds. This seems really high (to anyone used to U.S.-based mutual funds, at least).

Then there are people like fundsupermarket.com through which one can buy the same range of unit trusts. They advertise a 'discounted initial sales charge' of, typically, 2%.

So by buying through fundsupermarket, would I really be paying only 2% or is that on top of the fund manager's charge?

(I would have thought this would all be easy to understand from the web sites, but it has eluded me so far...)

Winxkid
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Postby Winxkid » Fri, 03 Oct 2008 5:35 am

Would be better if You could indicate the fund name and the name of fund manager/management
petsgdirectory.blogspot.com

forestial
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Postby forestial » Fri, 03 Oct 2008 11:06 am

All of the following indicate a 5% sales charge at their respective web sites.

Schroeder ASIAN GROWTH FUND
Deutsche DWS ASIA PREMIER TST
Fidelity FIDELITY ASEAN A-SGD
Legg Mason ASIAN ENTERPRISE

MikeDirnt
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Postby MikeDirnt » Fri, 03 Oct 2008 1:57 pm

if you buy from poems, fundsupermart, dollardex, most of the Sales Charges are front loaded type unlike in the west. typical SC are from 1 to 2%.

so if you invest $1000 for a 1% SC, $990 will be invested while $10 will go to fund distributor.

expense ratio is the fee that you pay to fund manager annually. this is calculated on a daily basis and reflected on the fund NAV
Guides and information -> Singapore Stocks

MikeDirnt
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Postby MikeDirnt » Fri, 03 Oct 2008 2:06 pm

by the way the 5% SC you saw is the SC as recommeded by fund house. you will typically pay this when you buy from banks. so if you want to save, buy from fund distributors at a discount
Guides and information -> Singapore Stocks

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Postby Strong Eagle » Fri, 03 Oct 2008 3:02 pm

I can't see any good reason for buying anything with a front end load.

MikeDirnt
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Postby MikeDirnt » Fri, 03 Oct 2008 7:12 pm

Strong Eagle wrote:I can't see any good reason for buying anything with a front end load.

we dont have a choice here. unit trusts is still a good instrument to gain exposure

even etf are front and back loaded but cheaper in overall cost
Guides and information -> Singapore Stocks

forestial
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Postby forestial » Sun, 05 Oct 2008 12:54 am

Thanks for the info. I will look more into the discounted charges via the distributors.

Another thing I have noticed about Singapore based unit trusts: there does not seem to be anything equivalent to index funds found elsewhere. Typically in the US index funds are much cheaper in terms of front-end sales charges (normally zero) and expense ratios (often less than 0.5%).

Anyone know of a Singapore-based unit trust that operates by following an index, preferably an Asia-wide index?

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Postby MikeDirnt » Tue, 14 Oct 2008 9:10 pm

forestial wrote:Thanks for the info. I will look more into the discounted charges via the distributors.

Another thing I have noticed about Singapore based unit trusts: there does not seem to be anything equivalent to index funds found elsewhere. Typically in the US index funds are much cheaper in terms of front-end sales charges (normally zero) and expense ratios (often less than 0.5%).

Anyone know of a Singapore-based unit trust that operates by following an index, preferably an Asia-wide index?

you need to understand, singapore is a small market. fund manager needs to get their fat pay! so with a small market, the expense ratio has to be compensated higher

in US and europe, the funds have bigger assets so a small expense ratio is enough for the managers.

typical expense ratio for equity UT here is 1 to 2%. we only have 3 index funds that are infinity US, europe and global. if you want lower expense, then go for exhange traded funds
Guides and information -> Singapore Stocks


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