Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Tuesday, 12 May 2015

How much can I invest in ETF using my CPF Monies

Today's post will be on: how much can I investing in ETFs using CPF monies.
This question is posted by one of our readers.
We would like to thank him/her for reading and interacting with us by posting a question for us to answer.

1) What is ETF?
An ETF is an Exchange Traded Fund, a fund traded on financial markets (SGX, NYSE etc) like a stock. For more information on what ETF is, please read our posts HERE

2) Am I Eligible to CPF Investment Scheme (CPFIS)
All members are eligible if you
    a) are at least 18 years old
    b) are not a undischarged bankrupt
    c) have more than $20,000 in your Ordinary Account or more than $40,000 in your Special Account
*Your first $60,000 in your combined CPF acccount earns an extra 1%, which is why the CPF recommend you to invest only amount in excess of that $60,000.

3) What can I invest in?
What you can invest in shown in the table below:

*Source from:

4) How much can I invest in ETFs using my CPF monies?
Yes, you may invest your CPF money in Singapore listed ETFs.
However, there are some rules & regulations regarding this.
You may only
    a) use your CPF OA for for investing in ETFs
    b) use funds in excess of $20,000 in your OA
    c) invest in 3 ETFs (currently approved):
              i) SPDR Straits Times Index ETF
              ii) Nikko AM Singapore STI ETF
              iii) ABF Singapore Bond Index Fund

5) What are the cost associated with using my CPF for investments in ETFs?
There are 2 costs associated with investing in ETFs with your CPF.
    a) Your brokerage fees
         Your account will have to be opened with 1 of the 3 banks in Singapore (DBS, OCBC, UOB). You will also incur service and transaction charge as per below in addition to your normal brokerage fees.

*Source from:
    b) Your ETF fund fees
         This depends on which ETF you are buying. Most ETFs charge a low fee. The fees are used to pay the fund management team for providing the product.
          i) SPDR STI ETF: expense ratio of 0.3% NAV (Net Asset Value)
          ii) Nikko STI ETF: expense ratio of 0.42% NAV
          iii) ABF Singapore Bond Index: expense ratio of 0.25% NAV

If you have any more questions regarding this policy, feel free to comment, ask us, or interact with us.
We would love to hear from you on how you think about this policy or other things that you would like more details on.
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