According to Bogle’s analysis of 355 funds, which work in the same way as our unit trusts and more recently “structured products”, only a miserable 24 performed better than the market benchmark.
In other words, why should investors pay the professional fund managers who charge an arm and a leg in management fees when they could have easily parked their hard-earned money in index funds?
Index funds typically incur much lower costs than other types of funds.
Tan Kin Lian then went on to give a local example of a poor performing fund. It’s a structured product that generated a miserly 0.4% per annum return.
Now back to his advice on buying low-cost indexed funds. Do we have such products in Singapore? There are more than a handful.
- ABF Singapore Bond Index Fund from DBS Asset Management
- US Dollar Nasdaq 100 Index Capital Protected Fund from HSBC Investments
- Infinity European Stock Index Fund from Lion Capital Management
- Infinity Global Stock Index Fund from Lion Capital Management
- Infinity U.S. 500 Stock Index Fund from Lion Capital Management
- Singapore Index Fund from Singapore Consortium Investment Management Ltd
- ABF Pan Asia Bond Index Fund from State Street Global Advisors
- StreetTRACKS Straits Times Index Fund from State Street Global Advisors