Total Expense Ratio (TER) ETF Singapore
The Total Expense Ratio (TER) of an ETF is the annual cost of running the fund expressed as a percentage of average net assets, encompassing the management fee, trustee/custodian fees, audit fees, and other operational expenses — deducted daily from the fund’s NAV before any published returns. This page is for informational purposes only and does not constitute financial advice.
TER is one of the most important factors in long-term ETF investing. A 0.2% difference in TER compounds significantly over 20–30 years. Singapore investors should compare TERs carefully when choosing between ETFs tracking the same index.
What Is the Total Expense Ratio (TER)?
The TER (also called the Ongoing Charges Figure, or OCF, in Europe) represents the total annual cost of holding an ETF. It is expressed as a percentage and deducted continuously from the fund’s NAV — you never write a cheque; the return you see is already net of TER. For example, if an ETF generates a gross return of 10% but has a TER of 0.5%, your net return is approximately 9.5%.
TER typically includes: management fee (largest component), index licensing fee, custodian fee, audit/legal/admin fees, and MAS registration fees (for Singapore-domiciled funds). It does not include brokerage commissions to buy/sell the ETF, or the bid-ask spread.
TER vs Management Fee: What’s the Difference?
The management fee is what the fund manager charges for running the ETF — selecting securities, rebalancing, and operations. The TER is broader: it includes the management fee plus all other fund-level operating costs. For passively managed index ETFs, the management fee is usually 85–95% of the TER. For actively managed or specialist ETFs, additional costs can push TER significantly above the headline management fee.
When comparing ETFs, always use TER (or OCF) rather than management fee for an apples-to-apples cost comparison.
Typical TER Ranges for ETFs in Singapore
| ETF Type | Typical TER Range |
|---|---|
| Broad global equity (e.g., VWRA, IWDA) | 0.10%–0.22% |
| S&P 500 ETF (Ireland-domiciled) | 0.07%–0.20% |
| S-REIT ETFs (SGX-listed) | 0.35%–0.60% |
| Singapore STI ETF | 0.18%–0.30% |
| Thematic/sector ETFs | 0.40%–0.75% |
| Actively managed funds | 1.00%–2.00%+ |
How TER Is Deducted from Your ETF
TER is not charged as a lump-sum annual fee. Instead, it is accrued daily as a tiny fraction of the fund’s assets and deducted before the NAV is published each day. This means the ETF’s total return as reported already reflects the TER deduction — you are paying the fee passively without noticing it directly. Over one year, a S$10,000 investment in an ETF with 0.2% TER costs S$20/year in fees.
TER Impact on Long-Term Returns
Over a 30-year investment horizon, TER makes an enormous difference. A S$100,000 investment growing at 8% gross per annum:
| TER | Net Return | Value at 30 Years |
|---|---|---|
| 0.07% | 7.93% | ~S$987,000 |
| 0.20% | 7.80% | ~S$944,000 |
| 0.50% | 7.50% | ~S$865,000 |
| 1.50% | 6.50% | ~S$661,000 |
The difference between 0.07% and 1.50% TER over 30 years is over S$326,000 on a S$100,000 initial investment.
Low-TER ETFs Available to Singapore Investors
Singapore investors have access to low-TER ETFs through SGX and international brokers. Notable options include: CSPX (iShares Core S&P 500, TER 0.07%, LSE-listed), VWRA (Vanguard FTSE All-World Acc, TER 0.22%, LSE-listed), SWRD (SPDR MSCI World, TER 0.12%, LSE-listed), G3B (Nikko AM Singapore STI ETF, TER ~0.30%, SGX-listed). For REIT exposure, CFA (NikkoAM-Straits Trading Asia ex Japan REIT ETF, TER ~0.55%) and QL2 (Lion-Phillip S-REIT ETF, TER ~0.60%) are popular choices. See our Singapore REIT ETF guide for a full comparison.
How to Find an ETF’s TER
ETF TERs are published in the fund’s: (1) Key Investor Information Document (KIID) or Product Highlights Sheet (PHS) — available on the fund manager’s website; (2) Annual report — the most accurate figure for the prior year’s actual costs; (3) ETF data aggregators such as JustETF, ETF.com, or Morningstar. For SGX-listed ETFs, MAS-registered fund documents are on the MAS OPERA database. Always verify TER before investing, as it can change year to year.
Frequently Asked Questions: Total Expense Ratio (TER) ETF Singapore
What is the total expense ratio (TER) of an ETF?
What is a good TER for an ETF in Singapore?
Is TER the same as management fee?
How do I find the TER of an ETF in Singapore?
Does TER include brokerage commission?
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