Unit Trust Singapore
What is a unit trust in Singapore, how it works, fees to watch, CPF/SRS eligibility, and how it compares to ETFs and robo-advisors in 2026.
A unit trust in Singapore is a pooled investment fund where investors’ money is combined and managed by a professional fund manager, who invests across a portfolio of securities — equities, bonds, or a mix — according to the fund’s stated objective. Returns are distributed pro-rata to unit holders based on the number of units they hold.
Not financial advice. All figures are for educational reference only. Data as at Q1 2026 unless noted.
Table of Contents
What Is a Unit Trust?
A unit trust (also called a mutual fund) pools capital from multiple investors and invests it according to a stated mandate — whether that is Singapore equities, Asian bonds, global technology, or a balanced multi-asset approach. Each investor owns “units” in the trust, and the unit price (known as the Net Asset Value, or NAV per unit) moves up and down with the underlying portfolio.
In Singapore, unit trusts are regulated by the Monetary Authority of Singapore (MAS) under the Securities and Futures Act (SFA). Funds authorised by MAS and offered to retail investors must meet specific disclosure and governance requirements, including publishing a Prospectus and regular fund reports. Funds are distributed through platforms like FSMOne, Fundsupermart, and endowus, as well as bank branches.
Unit trusts are distinct from ETFs: unit trusts are priced once per day (at the end of trading), while ETFs trade on exchanges throughout the day like stocks. Unit trusts are typically actively managed (a fund manager picks securities), whereas most popular ETFs are passively managed (tracking an index). This distinction has significant cost implications.
How Unit Trusts Work
When you invest S$5,000 in a unit trust, the fund manager uses your money (along with other investors’ capital) to buy a portfolio of securities. If the total fund NAV is S$100 million and your S$5,000 represents 0.005% of the fund, you own 0.005% of all the underlying holdings.
Key fee structure to understand:
— Sales Charge (Front-end Load): A percentage charged when you buy units, typically 1%–5% of the investment amount. Platforms like FSMOne and Fundsupermart often offer 0% sales charge promotions. Robo-advisors like Endowus charge 0% sales charge on CPF/SRS investments.
— Annual Management Fee: Charged as a percentage of AUM per year, embedded in the fund’s expense ratio. Actively managed funds typically charge 0.8%–2.0% p.a. ETFs charge 0.05%–0.50% p.a.
— Total Expense Ratio (TER): All-in annual costs including management fee, trustee fees, and other expenses. Always check the fund’s TER in the Product Highlights Sheet.
— Redemption Charge: Some funds charge an exit fee if redeemed before a minimum holding period — typically 0.5%–1% if redeemed within 90 days.
Distributions (dividends from the portfolio) may be paid out monthly, quarterly, or annually, or reinvested automatically depending on the share class chosen.
Unit Trusts in Singapore 2026
Singapore investors access unit trusts through several channels. FSMOne (iFAST) is the largest independent fund platform, offering over 1,000 funds with 0% sales charge on most. Fundsupermart offers similar functionality. Bank platforms (DBS, OCBC, UOB) offer fund investing via their internet banking portals, though often with higher sales charges.
CPF Investment Scheme (CPFIS) eligibility: approved unit trusts can be purchased with CPF OA and SA funds through CPFIS-approved financial institutions. The list of CPFIS-approved funds is maintained on the CPF Board website and includes Singapore equity, balanced, and fixed income funds. Higher-risk funds (e.g. pure equity, sector funds) are restricted to OA investments only. Learn more in our CPF investment strategy guide.
SRS eligible: most MAS-authorised unit trusts can be purchased using SRS funds. Robo-advisors like Endowus specialise in CPF and SRS unit trust investing with institutional share classes (lower fees than retail) and 0% sales charge.
Real-World Examples
Nikko AM Shenton Income Fund: A popular Singapore-focused income fund investing in equities and bonds of Singapore-listed companies. Management fee ~0.75% p.a., TER ~0.90% p.a. Distributes monthly dividends. Used by investors seeking Singapore income exposure in a managed format.
PIMCO GIS Income Fund: A global multi-sector bond fund popular among Singapore investors via CPFIS (SA-eligible). TER approximately 0.75%–1.25% depending on share class. Historically delivers ~4%–6% p.a. distribution yield, though this varies with bond markets.
Endowus Core Satellite portfolio: A robo-managed unit trust portfolio combining Dimensional Funds and Vanguard index funds. Total expense ratio approximately 0.30%–0.60% p.a. (well below most actively managed unit trusts). Accessible via Endowus using Cash, CPF, or SRS. See our robo-advisor glossary for comparisons.
ETFs vs Unit Trusts — Which Wins?
For cost-conscious Singapore investors, ETFs generally win on fees: a Singapore REIT ETF (like the Phillip SGX APAC Dividend Leaders REIT ETF) charges ~0.50% p.a. TER versus 1.0%–1.5% for comparable actively managed REIT unit trusts. Over 20 years, the fee difference compounds significantly — a 1% annual fee drag on S$100,000 costs approximately S$22,000 in lost returns over 20 years at 7% p.a. growth.
Unit trusts shine in two scenarios: (1) where CPF/SRS funds need to be invested and ETFs are not available through the investment channel, and (2) where the active manager genuinely delivers alpha above fees. Explore our Singapore REIT ETF guide for ETF alternatives, and use our Retirement Calculator to model different return assumptions for unit trusts vs ETFs in your retirement plan.
Frequently Asked Questions
What is the difference between a unit trust and an ETF in Singapore?
Unit trusts are priced once daily, typically actively managed, and carry higher fees (0.8%–2.0% p.a.). ETFs trade on SGX throughout the day, are usually passively managed (index-tracking), and charge lower fees (0.05%–0.50% p.a.). ETFs are generally preferred for cost efficiency; unit trusts may be preferred when CPF/SRS investment channels require them, or when an active fund manager has a strong track record.
Can I invest in unit trusts using CPF funds?
Yes. CPFIS-approved unit trusts can be purchased with CPF OA funds (above S$20,000) through approved agents including banks and brokerages. More conservative funds (balanced, fixed income) may also be eligible under CPFIS-SA. Platforms like Endowus offer CPF-invested unit trusts at 0% sales charge and institutional pricing, which significantly reduces costs.
How much does it cost to invest in a unit trust in Singapore?
Costs include a sales charge (0%–5%, often 0% on fund platforms and robo-advisors), an annual management fee embedded in the expense ratio (0.5%–2% p.a.), and occasionally a redemption charge for early exit. Always check the Total Expense Ratio (TER) in the Product Highlights Sheet before investing. On a S$50,000 investment, a 1.5% TER difference costs S$750/year — over 20 years, this can amount to tens of thousands in foregone returns.
Are unit trust returns taxable in Singapore?
Capital gains from unit trust redemptions are not taxable in Singapore, as Singapore does not have a capital gains tax. Distributions (dividends) paid out by Singapore-focused unit trusts are generally tax-exempt for individual investors. Foreign-sourced distributions may be subject to withholding tax at source in the fund’s home country, which is typically reflected in the fund’s net return. Consult a tax adviser for your specific situation.
Is investing in unit trusts safe in Singapore?
Unit trusts are regulated by MAS and offer investor protection through mandatory disclosures, audits, and trustee oversight. However, the capital value of your investment fluctuates with markets — there is no capital guarantee (unless you hold a capital-protected fund). In a market downturn, your unit trust value can fall below what you invested. Diversification across asset classes and geographies reduces but does not eliminate this risk.
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