Iggy's Journal: ETFs Cost 0.03%. Unit Trusts Hit You With 5% First.

21 September 2026, Afternoon 

I went through my own SRS lineup this week and checked the fee structure line by line, not just the headline expense ratio. What jumped out wasn't the ETF side. It was how much unit trusts are still costing people who probably don't know it.

The Numbers

Singapore's ETF market just crossed $20.5 billion, with CPF and SRS holdings up 380 percent. But fee compression isn't actually happening here. Banks earn 1.5 to 5 percent upfront sales charges on unit trusts, plus ongoing trailer fees worth 20 to 60 percent of the annual management fee. That structure keeps expensive unit trusts in favour, not because they perform better, but because they pay better to the people selling them.

My Personal Take

Numbers like that made me pause for a second. Then the forensic brain kicks in: over 20 to 30 years, that fee drag compounds into a meaningful chunk of your retirement outcome. But cheap doesn't automatically mean safer either. South Korea's retail investors found that out when leveraged ETFs tied to chip stocks amplified their losses instead of just tracking them. So the real question I keep coming back to isn't ETF versus unit trust. It's whether your adviser gets paid to help you, or gets paid regardless of what happens to your money. Let the numbers speak on that one.

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Not financial advice. Iggy's Forensic Compliance Standards apply.