To invest in unit trusts in Singapore, you choose a fund authorised or recognised by the Monetary Authority of Singapore (MAS), then buy units through a bank, a financial adviser or an online fund platform. You pay the fund’s net asset value per unit, plus any sales charge, and the fund deducts yearly management and running costs. MoneySense puts sales charges at 1.5% to 5% and typical total expense ratios at 1% to 2.5% a year, so the channel you buy through can matter as much as the fund.
Investing can lose money. MoneySense warns that you may lose a substantial amount of what you invest in a fund, and that fees are payable whether the fund does well or badly. This guide explains how unit trusts work. It does not recommend any fund.
What a Unit Trust Is
A unit trust pools your money with other investors’ and a fund manager invests it according to the fund’s stated objective. MoneySense describes the main appeal as diversification: one fund can hold dozens or hundreds of securities.
Funds offered to retail investors in Singapore are regulated as collective investment schemes. Singapore-constituted funds are “authorised” and foreign funds are “recognised”. You can check a fund on MAS’s OPERA database, which holds prospectuses for public offers.
Unit trusts differ from investment-linked insurance policies (ILPs). An ILP combines insurance with investment, and some units are sold to pay for cover and charges. MoneySense notes that if your main goal is investing, a unit trust may suit better, and that some ILP sub-funds are also offered as unit trusts.
How to Invest in Unit Trusts in Singapore: Step by Step
- Decide what the fund is for. Growth, income or preserving capital. MoneySense suggests matching the fund’s objective and risk to your own.
- Read the product highlights sheet and prospectus. Check what the fund invests in, its benchmark, whether it is active or passive, its risks and every fee.
- Compare channels. The same fund can cost less through a different distributor.
- Choose lump sum or regular savings plan. MoneySense says lump sums typically start around $1,000 and monthly plans at $100 to $500.
- Buy, then review. Read the manager’s reports and check the fund still fits your plan.
What Unit Trusts Cost
MoneySense lists these ranges, as at November 2026:
| Fee | Who receives it | Typical range |
|---|---|---|
| Sales charge (front-end load) | Distributor | 1.5% to 5% of the amount invested |
| Redemption charge (back-end load) | Distributor | 1% to 5%; usually instead of a sales charge |
| Switching fee | Distributor | About 1% |
| Platform fee | Fund platform | 0% to 0.3% a year |
| Wrap fee | Distributor | About 1% a year |
| Management fee (inside the fund) | Fund manager | 1% to 2% a year for active funds; usually below 1% for passive |
| Total expense ratio (inside the fund) | Fund and service providers | Usually 1% to 2.5% a year |
MoneySense adds that 20% to 60% of management fees may be passed by the manager to the distributor as a trailer fee. Fees inside the fund are not billed to you; they reduce the fund’s value.
Worked example: what the layers cost
Illustration only, not a guarantee. You invest S$10,000 for 10 years. Assume the fund’s investments earn 5% a year before any costs.
- No costs at all: about $16,290.
- 3% sales charge and 1.8% yearly fund costs: $9,700 is invested and grows at 3.2% a year, reaching about $13,290.
- No sales charge, 1.8% fund costs and a 0.3% platform fee: $10,000 grows at 2.9% a year, reaching about $13,310.
Costs take about $3,000 off the result in both cases. A one-off sales charge and a yearly platform fee can end up costing about the same over a decade, so compare the total over your holding period, not one fee at a time. Our compound interest calculator lets you test other numbers.
The short version: check that the fund is MAS-authorised or recognised, read its fees in full, and compare the same fund across channels before you buy.
Where to Buy
MoneySense lists banks, financial advisers and online fund platforms. If you want advice on which fund to buy, an adviser must disclose the product’s key features, risks, fees and the share of fees they receive. If you do not need advice, MoneySense notes that buying through a bank or fund platform may cost less.
Our platform comparison lists platforms selling funds without a sales charge, and our reviews of Endowus and POEMS set out their fund fees.
Your Right to Cancel
MoneySense says you can cancel a fund purchase within 7 calendar days with no administrative penalty, and the sales charge is refunded. If the fund’s value has fallen, you bear the loss; if it has risen, you get back what you paid but not the gain.
The right does not apply to top-ups of a fund you already hold, to recognised (foreign) funds, or to funds listed on SGX.
Risks to Understand
MoneySense lists:
- Market risk. The fund’s value moves with its holdings.
- Liquidity risk. Unlisted funds can be redeemed only on dealing days.
- Interest rate risk for bond funds, whose prices tend to fall when rates rise.
- Currency risk where the fund holds foreign assets.
- Counterparty risk, including in funds that use derivatives.
Unit trusts are not covered by SDIC deposit insurance.
Using CPF or SRS
CPF Board includes unit trusts under the CPF Investment Scheme for both Ordinary and Special Account savings, but excludes higher-risk funds. You can invest OA savings above $20,000 and SA savings above $40,000. The OA earns a guaranteed 2.5% a year, so a fund has to beat that after fees to come out ahead. Test the hurdle in our CPF OA vs invest calculator, and see our CPFIS explainer and SRS guide.
On tax, IRAS lists dividends from unit trusts in Singapore among those that are generally not taxable for individuals.
Unit Trusts, ETFs or Robo-Advisers?
All three pool money. ETFs trade on the exchange and mostly track an index at low cost; see our ETF investing guide. Robo-advisers build a portfolio of funds for a yearly fee; see robo-advisors explained. Unit trusts include many actively managed funds whose managers aim to beat a benchmark, at a higher cost.
What To Do Next
- Look the fund up on MAS OPERA and read its product highlights sheet.
- Add up every fee for your expected holding period, through at least two channels.
- Check the fund’s total expense ratio against a passive fund with a similar aim.
- Read our hub guide to starting out if you have not set your goals yet.
