Monday, May 07, 2007

DBS Enhanced Income Fund

Someone asked if this fund is the same as a Money Market fund? I asked an expert to analyse it. Here is the finding:


Even though you buy it using Singapore dollars, half of its investments are outside of Singapore. This makes it partly a currency speculation fund -- and you are betting on a weakening Singapore dollar. This is much riskier than a straight money market fund (in SGD).

It is also actively managed -- which explains its rather high expense ratio for a money market fund (0.46 per cent). On top of that it charges an initial sales charge of 0.2 per cent.

Because of the foreign investments, you must also pay currency conversion costs -- (which are a hidden expense that is deducted directly from the fund's yield and not included in the expense ratio).


Anonymous said...

There is no sales charge for DBS Enhanced Income if you buy online at fundsupermart. What is the sales charge and expense ratio for the NTUC Income flexicash account?

Anonymous said...

Thanks for the analysis, Mr Tan!

Anonymous said...

There's a one-time $50 policy fee for NTUC Income Flexi-cash. Mgt fee is 0.25% p.a. Not sure about its expense ratio.

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