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Endowus Core vs ESG – What’s The Difference?

Endowus Core vs ESG

If you are looking to start your investment journey with Endowus, you may have noticed that they have 2 types of General Investing portfolios: Core and ESG.

How are these portfolios different and which should you choose?

Here’s what you need to know.

The difference between Endowus Core and ESG portfolios

The Endowus Core and ESG portfolios aim to be globally diversified and passive investment strategies. The Core portfolio focuses on maximising returns. Meanwhile, the ESG portfolio aims to maximise returns while investing in companies that are more socially conscious.

Here is an in-depth comparison between these 2 portfolios:

Investment strategy

Endowus Core portfolios aim to providing you with low cost and globally diversified portfolios to maximise your returns. The Core portfolio targets companies that have these 3 characteristics:

  1. Value
  2. Small-cap
  3. Profitable business strategy

Meanwhile, the ESG (Environmental, Social and Governance) portfolios aim to invest in companies that are more environmentally and socially conscious.

If you are looking at ESG investing, you are focusing on these intangible factors as indicators for future growth.

Both use the same risk-level strategy

For both types of portfolios, you will be advised to invest at a certain risk level depending on your:

  1. Time horizon
  2. Risk profile

Both Endowus Core and ESG have 5 different risk levels. Each level has a certain allocation towards stocks and bonds:

PortfolioEquitiesFixed Income
Very Aggressive100%0%
Aggressive80%20%
Balanced60%40%
Measured40%60%
Conservative20%80%
Very Conservative0%100%
Endowus Risk Levels

For both the Core and ESG portfolios, your money will be split into a mixture of equities (stocks) and fixed income (bonds).

The greater the risk level you are able to take, the higher the allocation towards stocks and vice versa.

Funds used

The funds that Endowus invests your money into are quite different for both Core and ESG portfolios.

Here are the funds that you will invest in with the Core portfolio:

Type of FundFunds
EquitiesDimensional Global Core Equity
Lion Infinity (Vanguard) US 500 Stock Index
Dimensional Emerging Markets Large Cap Core Equity
Dimensional Pac Basin Small Companies
Fixed IncomePIMCO GIS Global Bond Fund
PIMCO GIS Income Fund
Dimensional Global Core Fixed Income Fd
PIMCO GIS Emerging Markets Bond Fund

And these are the funds that you will invest in the ESG portfolios:

Type of FundFunds
EquitiesMirova Global Sustainable Equity Fund
Schroder ISF Global Sustainable Growth Equity Fund
Schroder ISF Global Climate Change Fund
Fixed IncomeJPM Global Bond Opportunities Sustainable Fund
PIMCO GIS Climate Bond Fund
UOB United Sustainable Credit Income Fund

These portfolios are only available for either your cash or SRS funds.

Endowus has advised Core portfolios for your CPF OA funds, but not for the ESG portfolio. However, the funds in the CPF Core portfolio are slightly different compared to the Cash / SRS portfolio.

Endowus does not have an advised ESG portfolio for CPF OA

Endowus does not have a ESG advised portfolio for your CPF OA funds. However, you are able to invest your CPF OA funds into 2 ESG funds using Fund Smart:

  • Templeton Shariah Global Equity Fund
  • Schroder ISF Global Sustainable Growth Equity Fund

Both of these funds are equity (stocks) funds. Endowus currently does allow you to invest into ESG fixed income funds using your CPF OA.

You cannot switch between a Core and ESG portfolio

If you have already invested in a certain portfolio, you are unable to switch to the other portfolio afterwards.

For example, you may have started investing using a Core portfolio. You cannot directly switch your portfolio to the ESG one.

The only thing you can do is to modify the risk tolerance for your particular goal.

Endowus Modify Goal

If you want to switch to the other portfolio, you’ll need to sell off your entire portfolio, and then invest those funds.

Due to the processing time, it may take a while before you can invest in your new portfolio!

Top holdings

Here is a comparison between the top holdings in the Equity portion of either portfolio,

CoreESG
AppleMicrosoft
MicrosoftVestas Wind Systems
AmazonAlphabet
FacebookThermo Fisher
AlphabetMastercard

as well as the top holdings in the Fixed Income portion of both portfolios:

CoreESG
Federal National Mortgage Association5 Year Treasury Note Future 
10 Year Treasury Note Future 10 Year Treasury Note Future 
Irs Usd R 3Ml/1Ml+9.125Jpm Usd Liquidity Lvnav X (Dist.)

It is interesting to see that the stock holdings for the Core and ESG portfolios are quite different.

The Core holdings mainly follow the top holdings of the S&P 500.

Meanwhile, the ESG portfolio has a greater shift to towards companies with ESG characteristics.

There may be overlaps in the holdings

If you want to invest in both the Core and ESG portfolios, you may have an overlap in the holdings.

While this may be minor, it is something you may want to consider when deciding your allocation into the 2 portfolios.

To diversify your investments as much as possible, you may want to have as little overlap between your portfolios as possible.

Fees

When you invest in either portfolio with Endowus, you will be charged 2 levels of fees:

  1. Fund-level fees (by the fund manager)
  2. Management fees (by Endowus)

#1 Fund-level fees (by the fund manager)

When you invest in the different funds on Endowus’ platform, the fund managers will charge you a fee as well.

However, Endowus has helped to reduce the fees that you’ll incur from the fund managers in 2 ways:

  1. Providing you with access to institutional share classes (lowest fees amongst all share classes)
  2. Rebating the trailer fee to you

If you want to invest in any of these funds, Endowus is probably the most cost effective way of doing so. This is especially if you’re a retail investor!

Nevertheless, you’ll still need to pay fees to the fund manager. Endowus shows the breakdown very transparently when you are creating your portfolio.

Endowus Fund Level Fees

Here is a comparison between the fund-level fees you’ll need to pay across the different risk levels for both portfolios:

Risk LevelCoreESG
Very Aggressive0.36%1.01%
Aggressive0.39%0.96%
Balanced0.42%0.92%
Measured0.45%0.88%
Conservative0.47%0.84%
Very Conservative0.50%0.79%

As a general rule, it seems that the Core portfolios have lower fund-level fees compared to the ESG portfolios.

#2 Management fees (by Endowus)

The management fees charged by Endowus are the same across either portfolio. However, they are different in terms of the funds you use to invest with Endowus.

Flat 0.4% SRS

Endowus charges a flat 0.4% fee for any amount of your SRS funds that you have invested.

This makes it one of the lowest fees being offered by a robo-advisor!

Tiered pricing for Cash

Endowus has a tiered pricing for your cash investments:

AmountFee
Up to S$200k0.6%
S$200,001 to S$1,000,0000.5%
S$1,000,001 to S$5,000,0000.35%
S$5,000,001 and above0.25%

Endowus offers a tiered and not stacked pricing. This means that if you invest $200,001 into Endowus, you will be charged 0.5% for your entire $200,001.

Compared to other robo-advisors, Endowus’ fees are pretty affordable.

Verdict

Here is a comparison between these 2 portfolios:

CoreESG
Investment StrategyMaximising returnsMaximising returns
for ESG companies
Fund AvailabilityCash / SRS / CPFCash and SRS only
Fund-level FeesGenerally lowerGenerally higher
Endowus Management FeesSameSame

So which portfolio should you choose?

Choose Core to maximise your returns

The Core portfolios are aimed at maximising your returns by choosing funds that focus on the factors of:

  1. Value
  2. Small-cap
  3. Profitability

Generally, these factors have historically shown to provide the best returns in the long run.

If you want to maximise your returns while having lower fund-level fees, you can consider investing in this portfolio.

Choose ESG for more sustainable investing

ESG investing is rather popular in Singapore, and the sustainable aspects of the companies in these portfolios may appeal to you.

ESG is more of a niche investing strategy when compared to the Core portfolio.

While the fund-level fees are generally higher for ESG, these companies are seem to be more sustainable and may continue producing returns in the long run.

Conclusion

Endowus offers different ways to invest through their advised portfolios: Core and ESG.

It is even possible for you to use both in a core-satellite portfolio. You may want to use ESG as your satellite portfolio to gain some exposure to these sustainable companies.

Ultimately, it really depends on the investment goals that you wish to achieve!

👉🏻 Referral Deals

If you are interested in signing up for any of the products mentioned above, you can check them out below!

Endowus Referral (Receive a $20 Access Fee Credit + up to $500 worth of rewards)

If you are interested in signing up for Endowus, you can use my referral link to create your account.

Endowus Referral

You will receive a $20 access fee credit, regardless of the amount that you start investing with Endowus.

The access fee does not have any expiry date. As such, you can invest at any pace that you wish, and still get $20 off your fees!

Current Promotion: Up to $500 worth of rewards

From now till 31 July 2021, Endowus is offering up to $500 worth of units of the LionGlobal All Seasons Fund (Growth).

This depends on the amount that you’ve invested in any of Endowus’ General Investing or Cash Smart portfolios:

Amount InvestedReward
First $10k$100
Every subsequent $5kAdditional $50

You can receive up to $500 of units for your first $50,000 invested.

Here are some investments that will not count to this promotion:

  1. Investing in the ESG portfolio
  2. Investing in the Fund Smart customised portfolio

You can sell or withdraw these units after a minimum holding period of 90 days. You may want to take note that you’ll need to pay access fees for these units as well!

You can find out more about this promotion on Endowus’ website.


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