Mutual funds are a great way to invest in the stock market and diversify your portfolio. Many mutual funds are available for investors, so understanding which ones to purchase can be overwhelming. Fortunately, buying mutual funds online has become more accessible in Singapore over recent years, with several available options. This article will discuss how you can buy mutual funds online in Singapore.
Using your bank’s online investment platform
Most banks in Singapore offer an investment platform that enables customers to conveniently purchase mutual funds from the comfort of their homes. Customers must first register on their bank’s website before purchasing a fund by selecting the desired option (e.g., stocks, bonds, or exchange-traded funds). The transaction is completed once payment has been made via debit/credit card or online transfer.
Using a third-party broker
Some third-party brokers provide an alternative platform for buying mutual funds online in Singapore. These platforms allow customers to select from a range of products and compare prices before making their purchase decision. Customers must first open an account with the broker before they can start trading via their website or mobile app. The investor’s transaction will be complete once payment has been made through a debit/credit card or bank transfer.
Purchasing directly from a fund house
Fund houses manage mutual funds, such as Aberdeen Standard Investments, BlackRock, and Invesco. Customers can go directly to the fund house’s website to research and purchase mutual funds. The transaction is completed once the customer has selected their desired fund and made payment through a debit/credit card or bank transfer. Moreover, some fund houses also offer direct debit options, which allow customers to purchase mutual funds regularly.
Utilising an online comparison platform
Online comparison platforms such as MoneySmart and SGX allow customers to compare prices and features of different mutual funds before making their purchase decision. Customers can read reviews, view product ratings, and even get advice from customer service representatives before they proceed with their transactions. The purchase will be complete once payment has been made through a debit/credit card or bank transfer.
Investing via an online robot advisor
Robo-advisors are automated investment management services that provide investors with tailored advice on investing in mutual funds. These platforms allow customers to make informed decisions about which funds to invest in based on their risk appetite and financial goals. Customers must first open an account with the robot advisor before purchasing a fund. The transaction will be complete once payment has been made through a debit/credit card or bank transfer.
Investing through Central Provident Fund Investment Scheme (CPFIS)
The CPFIS allows customers to use their funds in the Central Provident Fund (CPF) to buy units of eligible mutual funds. Customers must first open an account with appointed fund managers before purchasing. Once they select a fund, they can submit their application online, and the transaction will be complete if the relevant authorities approve it. Moreover, customers can track their investments online and make adjustments as needed.
Risks of buying mutual funds online
Though buying mutual funds online may seem more straightforward, investors must know about the risks to ensure a safe investment. Knowing the risks will help investors make informed decisions and avoid losses.
Market risk
When buying mutual funds online, investors must know that their investments are subject to market risk. The fund’s value may go up or down depending on the performance of the underlying securities and economic conditions.
Liquidity risk
Investors should also be aware of liquidity risk when investing in mutual funds online because some mutual funds may not have a liquid secondary market, so investors may not be able to exit the investment quickly.
Fraudulent activity
Fraudulent activities can occur when buying mutual funds online, as scammers may attempt to steal customers’ personal information or financial details. Therefore, customers need to stay vigilant and always check their provider is reputable and trustworthy.
Fraudulent and poor-quality products
When buying mutual funds online, investors may come across fraudulent or poorly managed products that may bring about losses instead of returns. Therefore, customers must research and choose reputable fund managers who manage reliable investments.
