At the present moment, we do not really have a ETF that does this, but one unit trust that does this is the Phillip Singapore Real Estate Income Fund.

This fund seeks to achieve medium to long term capital appreciation and a regular stream of income by mainly investing in REITs listed in Singapore, including warrants, bonds and convertible bonds issued by the REITs.

It is the Managers’ intention to primarily invest the assets into REITs listed in Singapore, with a maximum amount of 10% into REITs listed outside Singapore. The fund is both cash and SRS approved.

The fund was only launched last year and below is the price chart as of 31 May 2012. Note that the benchmark is a price index and does not factor in dividends.

At the moment, the fund charges an annual management fee of 0.8% and there is an upfront sales charge of 0.5% through the Phillip Unit Trust platform and Fundsupermart. I was not able to find this fund on Dollardex.

And for those who are curious as to what REITs the fund holds, the top 10 holdings of the fund (as at 31st May 2012) are as follows:

1. Cache Logistics Trust
2. Starhill Global REIT
3. Mapletree Commercial Trust
4. Suntec Real Estate Investment
5. Ascendas Real Estate Investment
6. CapitaMall Trust
7. Mapletree Logistics Trust
8. CDL Hospitality Trusts
9. Fortune Real Estate Investment
10. Parkway Life Real Estate Investment

To leave your comments, please go to : Phillip Singapore Real Estate Income Fund

The POEMS 0% sales charge promotion runs till 31 August 2012 but I am keeping my fingers crossed that they will extend it as both FSM and Dollardex have an indefinite period for their 0% bond fund campaign.

Edited: Heard they have extended it to 30 September 2012.

Their promotion also applies to the funds under the CPF Investment Scheme (CPFIS) where you can buy equity funds at 0% sales charge. In comparison, you can buy CPF funds at 0% sales charge from Dollardex only if you are a Private+ client with them (>$200k assets). The normal sales charge for equity type of funds at POEMS is 0.75%.

POEMS are also currently doing a transfer incentive for cash and SRS holdings which is valid till 31 July 2012 . A transfer campaign is usually used by platforms to gain market share from their competitors. This is done by offering some kind of incentive to entice clients to transfer their existing holdings from other platforms.

For this particular promotion, you will receive $10 NTUC shopping vouchers for every $10,000 worth of cash or SRS unit trust holdings successfully transferred from other distributors/ banks into POEMS. The maximum value of vouchers is $200 per client and the transfer will take 4-6 weeks to complete. Note that when your holdings are in the process of being transferred, you will not be able to sell it. The holdings will then have to be held for a minimum period of two months to be eligible for the vouchers.

And if you are thinking of investing into the Henderson China or Technology fund through POEMS, you can get additional units if you invest from 1 July 2012 to 30 September 2012. This promotion is for both cash, SRS and CPF investments.

• Invested amount of $5000 – $19,999 : Receive $50 worth of bonus units
• $20,000 – $29,999 : $100
• $30,000 – $39,999 : $150
• $40,000 – $49,999: $200
• $50,000 and above : $250

To leave your comments, please go to : POEMS Unit Trust Platform Promotions

Insurance companies then joined in the fray when they launched investment-linked (ILP) type of insurance policies, which were a special type of insurance policies that invested into unit trusts. Most of the time, the charges were also high as they were mainly embedded within the plans.

When the internet came about, online platforms emerged as another avenue for retail investors to purchase unit trusts. Without a physical presence, these platforms could afford to have a lower sales charge and compete on price and convenience.

How many of you here actually remember FinatiQ, Singapore’s first online bank?

It offered very competitive savings and fixed deposit interest rates. One could also buy unit trusts through the platform at a lower sales charge of 2-3%. Unfortunately, due to a loss in marketing and platform direction, Finatiq decided to cease operations a few years back.

Two other early online platforms offering unit trusts were Fundsupermart (FSM) and Dollardex. DIY investors who dabble into unit trusts would be familiar with them. Shortly after they came out, retail investors were able to buy unit trusts at a much reduced upfront sales charge of only 1.5-2%.

Due to their advantage as early adopters and low pricing strategy, they held a high market share among the DIY investors.

Despite this, the banks still controlled a significant portion of the unit trust market as they were able to rely on their vast network of bank branches and customer base to move sales. All these while continuing to maintain their 5% sales charge margin as many consumers were not aware of better alternatives.

A later entrant to the online unit trust industry was Phillip Unit Trust, a member of PhillipCapital. Their online platform POEMS is actually widely known to most retail investors as a share trading platform. POEMS, in actual fact, has one of the biggest market share when it comes to the retail market for share trading.

By offering unit trusts on their platform, PhillipCapital allowed their customers to use a single platform for buying both shares and unit trusts (among other products). For people who do not want the hassle of having multiple platforms, POEMS serves as a good option.

One key difference between POEMs and the other two platforms is that the payment for unit trusts need not be received first in order for the order to be transacted. For both FSM and Dollardex, they have to receive your money first before they can process your online order. For POEMS, they operate similarly to how they clear your stock orders. Clear the trade on the same day, and allow you to pay later.

Of course, should you choose to park your money beforehand at POEMS, they will be placed into the Phillip Money Market Fund, which has returned a respectable 0.56% return for the past one year.

With three main players now (FSM, Dollardex and POEMS), investors are basically spoilt for choice when it comes to choosing a platform. The price war among the three has been relentless and this can only benefit consumers.

However, with huge pressures depressing the upfront commissions, platforms can only make money from the trailer fees or find some other way to generate revenue.

Fundsupermart was the first to bite the bullet and started to impose a platform fee a couple of years ago. The platform fee ranges from 0.2% to 0.5% per year (depending on your account size and type of fund). There are no platform fees for CPF holdings.

Navigator, the engine behind Dollardex, also followed suit by imposing a platform fee on accounts held via financial advisers. This does not apply to accounts at Dollardex although Dollardex does have an option where you can choose to play an annual fee in return for portfolio advice and unlimited free switching.

The platform fee can be a significant factor for cost conscious investors who do not want their portfolio’s returns to be affected by an addition layer of costs. Of course, there are those who might argue that in the first place, paying the annual management fee to the fund managers does not guarantee performance and we should just invest into ETFs or equities directly. That is another topic for discussion which I shall not cover in this article.

However, one thing is definitely clear. As consumers become more educated and conscious about fees, buying unit trusts through banks is going to be a thing of the past. This is even more so for CPF investments, as the CPF agent bank’s fees are much lower if you go through one of the three highlighted platforms compared to buying them from the banks or elsewhere.

Banks will have to develop their own online low cost platforms or some other strategy if they wish to compete. This is already happening.

To leave your comments, please go to : Unit Trust Platforms in Singapore

For Dollardex, they now have a list of 30+ bond funds that does not have any upfront sales charge. Currently, their private+ clients (those with more than $200k in assets invested) already enjoy 0% sales charge for all their CPF investments.

Similarly, Fundsupermart (FSM) now have a list of around 50 fixed income funds that will not have any upfront sales charge. FSM announced this move through a new portal Where Income and Savings are Enhanced (WISE), which also provided some educational materials on bond funds.

You might ask the question, so what exactly do the platforms earn if they do not impose any upfront sales charge?

In case you were not aware, a part of the annual management fees for the funds are actually paid to the distributor as trailer fee. This can add up if the assets are huge.

FSM also has an annual platform fee of 0.2% for bond funds held on their platform.

With increasing client sophistication, the days of paying a high sales charge through a third party distributor might very soon be a thing of the past.

To leave your comments, please go to : Zero Sales Charge for Bond Funds

The new brand name will replace the different business names currently in use in Singapore, Hong Kong, Malaysia, Taiwan, Japan, Korea, the United Arab Emirates and Vietnam. The new brand will not apply to joint venture operations in China and India, or in Hong Kong through BOCI-Prudential.

In Singapore, the name will change from Prudential Asset Management (Singapore) Limited to Eastspring Investments (Singapore) Limited.

As a result of the change, the funds here will also undergo a name change.

PRU Income X -> Eastspring Income X

Sub funds of Prudential Unit Trusts

– PRU Pan European
– PRU Global Technology
– PRU Asian Balanced
– PRU Dragon Peacock
– PRU Global Basics
– PRU Global Balanced
– PRU Asian Infrastructure Equity
– PRU Global Positioning Strategy
– PRU Singapore Select Bond
– PRU Protected Global Titans (S$)

Eastspring Investments Unit Trusts

– Eastspring Pan European
– Eastspring Global Technology
– Eastspring Asian Balanced
– Eastspring Dragon Peacock
– Eastspring Global Basics
– Eastspring Global Balanced
– Eastspring Asian Infrastructure Equity
– Eastspring Global Positioning Strategy
– Eastspring Singapore Select Bond
– Eastspring Protected Global Titans (S$)

Sub funds of Prudential Funds

– PRU Monthly Income Plan

Eastspring Investments Funds

– Eastspring Monthly Income Plan

The name changes have no impact on the investment philosophy or process of the funds.

To leave your comments, please go to : Prudential Asset Management Renamed as Eastspring InvestmentsAs