ETFs that you can buy using SRS Funds

Exchange-Traded Funds (ETFs) are a popular investment vehicle, but the ETFs available for investment using SRS funds have been lacking. The ETFs that are currently available to SRS investors charge high expense ratios, suffer from poor liquidity, and are not sufficiently diversified (with the exception of the SPDR® S&P 500 ETF).

However, Stashaway's ETF Explorer looks to change the landscape by introducing a greater variety of low-cost, liquid ETFs; all available for investment using SRS funds. What does this mean for investors? Let's dive in!

What is Stashaway ETF Explorer?

ETF Explorer allows one to invest in selected ETFs using cash or SRS funds. Most of these ETFs are listed in the UK or the US, and that access to UK or US listed ETFs makes all the difference; you are no longer restricted to SGX-listed ETFs!

How much does it cost?

Stashaway charges a fee of USD $1 (excluding GST) for each order placed. For SGX-listed ETFs only, a 0.09% operation fee of the transacted amount applies, and the $1 USD order fee is converted to SGD at the previous day's closing rate.

There are no monthly account fees. Any dividends received will be re-invested free of charge; this is a huge plus as some of the ETFs available are distributing ETFs, which means dividends are not automatically re-invested by the ETF issuer. It is good to know that Stashaway will re-invest any dividends received at no extra cost.

Given that the only costs involved with ETF Explorer are the expense ratio charged by the ETF issuer, and the order fee charged by Stashaway, I do think fees are relatively low, although I would hesitate to adopt a monthly dollar-cost averaging approach as it costs USD $1 per order.

What are some of the ETFs available?

Stashaway ETF Explorer offers a selection of ETFs across different asset classes, including, but not limited to equities, fixed Income and commodities.

The above ETFs are my top picks from Stashaway ETF Explorer. All three ETFs are Irish-domiciled, and charge some of the lowest expense ratio in their respective category.

As explained in another post, non-US investors should invest in Irish-domiciled ETFs to benefit from lower withholding taxes, and avoid the US estate tax.

Let me explain briefly why the above are my top picks.

iShares MSCI ACWI UCITS ETF

iShares MSCI ACWI UCITS ETF (ISAC) is listed on the London Stock Exchange, and tracks the MSCI All Country World Index. For an expense ratio of just 0.20%, ISAC gives you exposure to more than 1700 stocks across developed and emerging markets. The fund is also highly liquid.

iShares $ Short Duration High Yield Corporate Bond UCITS ETF

iShares $ Short Duration High Yield Corporate Bond UCITS ETF (SDHY) is also listed on the London Stock Exchange, and tracks the Markit iBoxx USD Liquid High Yield 0-5 Capped Index. SDHY invests in High Yield Corporate Bonds, also known as junk bonds. This means that companies issuing the bonds are more likely to default on their debt, but you do get a higher yield in return. I prefer short duration High Yield bonds in this environment, as the term premium isn't that great.

iShares Core Global Aggregate Bond UCITS ETF

iShares Core Global Aggregate Bond UCITS ETF (AGGG) is also listed on the London Stock Exchange, and tracks the Bloomberg Global Aggregate Bond Index. The Bloomberg Global Aggregate Bond Index essentially tracks the entire universe of investment-grade bonds, and issuers of these bonds are mostly governments or companies with an investment-grade credit rating.

Do take note that SDHY and AGGG are distributing funds, i.e. dividends are not automatically re-invested, but Stashaway actually does the re-investment for you at no extra charge.

These three ETFs are popular with investors, and are the go-to funds in their respective categories. All three ETFs boasts of large AUMs, good liquidity, and relatively low expense ratios. Hence, these three ETFs are my top picks for Stashaway ETF Explorer too.

Conclusion

Stashaway ETF Explorer gives Singapore-based investors access to ETFs listed outside of the SGX, and all of the ETFs available through ETF Explorer are also available for investment using SRS funds.

I like that fintechs, such as Stashaway, are leading the way in giving investors more investment options using SRS funds. Coupled with the very reasonable fees (USD $1 per order), investors should consider ETF Explorer when they are looking to invest SRS funds.

If you would like to find out more about Stashaway ETF Explorer, do check out their FAQs here!

P.S. If you do not already have a Stashaway account, why not sign up using this link?

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