Lower upfront cost

Earlier this week, I wanted to put additional investment in the Combined Fund of NTUC Income. through my Flexi-link policy. I was told that the upfront spread for new investment was 3%.

I decided to look for an alternative investment. I finally made my additional investment in the following:

a) Buy 8 blue chip shares and REIT in the stockmarket (for some diversification)
b) Invest in the STI exchange traded fund

The upfront cost of my investment is only 0.3% (in brokerage fee). This is one-tenth of the cost of investing in the Combined Fund.

A comparison of the annual fees is:

a) Combined Fund - 0.9%
b) STI ETF - 0.3%
c) Blue chip shares - Nil

Lesson: If you have a large amount to invest, you can buy a few shares directly. If you have a smaller sum, you can invest in the STI exchange traded fund (for diversification and low cost).