POSB Invest-Saver

Your first taste of Singapore blue chips from just S$100 a month!

Frequently Asked Questions on the POSB Invest-Saver (Regular Savings Plan ('RSP') for an Exchange Traded Fund ('ETF'))


POSB Invest-Saver

  1. What is a RSP for an ETF?
    An RSP enables you to buy units of an ETF through a disciplined approach by investing fixed investment amounts regularly each month. It allows you to accumulate a portfolio for yourself at a potentially reduced cost, without the need to start with a huge initial capital.
     
  2. What are the merits of using an RSP to invest in an ETF?
    By contributing a fixed investment amount consistently every month over a period of time, your average cost of investing in an ETF may potentially be lower than the average price of investing in the ETF over the same period of time. This investment method is called ‘dollar-cost averaging’ and it can help to hedge against market volatility as you can avoid the pitfalls of market timing by not speculating on the ‘right’ time to invest versus investing your capital in a lump sum. Through this disciplined method, you will build up a portfolio for yourself overtime at a potentially lower average cost as you will buy more units when prices are low and lesser units when prices are high.

    Example:

    Monthly Investment Purchase price Units bought
    S$100 S$1.20 83.3
    S$100 S$1.50 66.6
    S$100 S$1.35 74
    S$100 S$0.95 105.2
    S$100 S$1.10 90.9
    S$500 (total) S$6.10 420

    Average cost per unit (S$500/420 units) = S$1.19
    Average price per unit (S$6.10/5) = S$1.22

    Note: The above is meant for illustration purpose only.
     
  3. What is the POSB Invest-Saver?
    It is a RSP that allows you to invest via a GIRO arrangement on a monthly basis. Through POSB Invest-Saver, you can invest affordably in the Nikko AM Singapore STI ETF. When you buy units of this ETF, you are investing into Singapore's top 30 companies (based on market capitalisation) including Singapore Exchange Ltd, Singapore Airlines Ltd and Singapore Press Holdings Ltd. Collectively, they are known as Singapore’s blue chip companies and their performance is represented by the Straits Times Index ('STI'). The constituents of the STI are reviewed every half-yearly.
     
  4. Why should I consider the POSB Invest-Saver?
    It provides a relatively simple and lower cost approach to take part in the Singapore stock market. Retail investors may want to start investing but may not have huge initial capital or the discipline to do so. Furthermore, they may not have easy access to stock research reports, nor the time and know-how to interpret such reports.
     
  5. What are the benefits of subscribing into the POSB Invest-Saver?
    1. You can start investing without having to begin with significant capital. The minimum investment into the POSB Invest-Saver is an affordable S$100 a month.
    2. Pay a low sales charge of 1% (charged on each monthly transaction) from as low as S$1 based on the minimum investment of S$100 a month. There are no other administration or platform charges involved.
    3. No exit or redemption charges. However, please note that this may be subject to change.
    4. Convenience - Easy access through self-directed ATM subscription and redemptions at all our ATMs. For subscriptions, you can also visit our website at www.posb.com.sg/investsaver, submit an online request form and our staff will call you back within 3 business days to take your phone application instruction.
    5. Transparency: The stock holdings in the underlying Nikko AM Singapore STI ETF are transparent so you know exactly what stocks it holds. The Nikko AM Singapore STI ETF can help you gain exposure to the STI without actually having to spend much more money buying the direct component stocks of the index.
    6. Benefit from the effects of compounding so the earlier you invest the greater your ability to grow your wealth.
  6. What should I consider before investing into the POSB Invest-Saver?
    1. Sufficient monies to sustain the investment over the medium to long-term
    2. You have to be willing to accept that your principal amount may be at risk including the possible loss of the principal amount invested as this is not a capital guaranteed product
    3. Ensure you have sufficient savings and liquidity
    4. Understand the risks and fees of the underlying Nikko AM Singapore STI ETF

Understanding ETFs

  1. What are ETFs?
    They are open-ended funds that, like stocks:
    • Are traded on the stock exchange
    • Can be bought and sold through brokers or selected financial institutions
    An ETF's objective is to produce a return that tracks or replicates a specific index. They are passively managed by ETF fund managers and do not try to outperform the underlying index. Hence, an ETF has fees and charges that are usually lower than those of actively managed investment funds. By investing into an ETF, you can gain exposure indirectly to the underlying component stocks in the index without having to spend more money buying actual lots of these stocks.
     
  2. What is the Nikko AM Singapore STI ETF?
    The Nikko AM Singapore STI ETF is an exchange traded fund managed by Nikko Asset Management Asia Ltd that tracks, as closely as possible, the performance of the Straits Times Index ('STI') by substantially investing its assets in the constituent stocks of the STI in the same weightings as reflected in the STI. By buying into the Nikko AM Singapore STI ETF, you can gain exposure to the STI without actually having to spend money buying the direct component stocks of the index.
     
  3. What is the Straits Times Index?
    The Straits Times Index is a market value weighted index comprises of the top 30 main-board listed companies based on their market capitalisation on the Singapore Exchange.
     
  4. Where is the Nikko AM Singapore STI ETF listed?
    Nikko AM Singapore STI ETF is listed on the Singapore Exchange.
     
  5. What are some of the potential risks I face when I invest in the Nikko AM Singapore STI ETF (the 'Fund')?
    The Fund carries significant risks as it is a narrowly focused fund that invests solely in equities listed on the STI. Some of the key risks include:
    • Market Risk - As the Fund tracks the performance of the STI, investors in the Fund will be exposed to the price fluctuations of the units due to a number of factors, including, without limitation, the price fluctuations of the constituent stocks within the STI.
    • Liquidity Risk - Although units in the Fund are listed on the SGX-ST, investors should be aware that there can be no assurance that active trading markets for units will develop, nor is there a certain basis for predicting the actual price levels at, or volumes in, which units may trade.
    • Tracking Error Risk - Changes in the price of the Fund are unlikely to replicate exactly changes in the STI due to factors such as fees and expenses of the Fund, liquidity of the market and changes to the Index.
    Note: This list is not exhaustive. Please refer to the Prospectus for the full list of risks.
     
  6. Will the Nikko AM Singapore STI ETF pay any distributions?
    The Nikko AM Singapore STI ETF ('STI ETF') aims to pay distributions from dividends received from the underlying shares. However the ability of the STI ETF to pay will be dependent on the dividends declared and paid by the companies whose shares are held by the STI ETF and the level of fees and expenses payable by the STI ETF.
     

Subscription, Redemption and Termination of the POSB Invest Saver

  1. How do I start an investment into the POSB Invest-Saver?
    You can subscribe to the POSB Invest-Saver at any of our ATMs by following these simple steps:
    • Step 1: Insert your ATM/Debit card and enter your PIN. Go to service menu
    • Step 2: Select the option "Regular Savings Plan for Exchange Traded Fund (RSP ETF)"
    • Step 3: Select the option "RSP Set up/Change of subscription amount"
    • Step 4: Read the T&Cs. You may obtain the full T&Cs from our branches or from www.posb.com.sg/investsaver.
    • Step 5: Confirm that you have read and accept the T&Cs by clicking on the “continue” button on screen
    • Step 6: Select your Tax Status and key in your intended monthly subscription amount
    • Step 7: You will receive an ATM receipt confirming your application.
    Upon successful setup, the Bank will send you a confirmation letter to inform you that your investment into the POSB Invest-Saver is set up and when the first deduction will take place.
     
  2. What will my purchase price of the POSB Invest-Saver be each month?
    Your purchase price would be based on the average subscription price on the Business Day following the day your account is debited, or such other day determined by the Bank in good faith and in a commercially reasonable manner.

    The average subscription price is calculated by dividing the total cost of purchasing the shares of the Nikko AM Singapore STI ETF by the total quantity of shares purchased on that day by the Bank. All customers will be provided with the same average subscription price.
     
  3. Where can I obtain a copy of the Nikko AM Singapore STI ETF offering documents?
    You can obtain a copy of the Nikko AM Singapore STI ETF prospectus and product highlights sheet (PHS) from www.posb.com.sg/investsaver or from any of our branches.
     
  4. How is the subscription like?

    Example:

    Monthly Subscription Amount Sales charge of 1% Net Investment Amount for POSB Invest-Saver Assume Average Purchase Price on 12th Number of Units
    S$300 S$3 S$297 S$3.27 90.82


    However, as only round figures can be issued for the POSB Invest-Saver, the cost and sales charge of the residual units of 0.82 units will be refunded back to you.

    Example:

    Residual Units Value of residual units based on Average Purchase Price on 12th Sales charge (1%) on value of residual units Total amount refunded to you
    0.82 S$2.68 S$0.0268 S$2.70


    Note: The above is meant for illustration purpose only.
     
  5. What is the sales charge levied on the POSB Invest-Saver?
    A sales charge of 1% will be deducted from your subscription amount every month. However, as we are only able to accept round figures for the POSB Invest-Saver, we will refund the 1% sales charge based on the value of the residual units (if any). Please refer to Question 4 above for an illustration.
     
  6. When will my account be debited?
    The monthly debiting from your saving/current account will be on the 12th of every month (or the next business day if the 12th is a non-business day). The date may be subject to change.
     
  7. Will I receive regular statements? Can I check my holdings via iBanking?
    Yes, you will receive quarterly statements from the Bank. If you have an iBanking account with us, you may also log on to view your latest holdings and market value of the Nikko AM Singapore STI ETF.
     
  8. Can I change my monthly subscription amount?
    Yes, you can change your monthly subscription amount via any of our ATMs by following these easy steps:
    • Step 1: Insert your ATM/Debit card and enter your PIN. Go to service menu
    • Step 2: Select the option "Regular Savings Plan Exchange Traded Fund (RSP ETF)"
    • Step 3: Select the option "RSP Set up/Change of subscription amount"
    • Step 4: Enter the new figures of the monthly subscription amount that you wish to change to and confirm
    • Step 5: You will receive an ATM receipt confirming your action.
    The Bank will send you a confirmation letter to confirm when the change to your subscription amount will start taking effect.
  9. How do I redeem my holdings in the POSB Invest-Saver?
    You can redeem your holdings in the POSB Invest-Saver daily at any of our ATMs by following these simple steps:
    • Step 1: Insert your ATM/Debit card and enter your PIN. Go to service menu
    • Step 2: Select the option "Regular Savings Plan Exchange Traded Fund (RSP ETF)"
    • Step 3: Select the option "Redemption of ETF"
    • Step 4: You will receive an ATM receipt confirming your action. The redemption amount will be credited to your designated debiting account.
    Only full redemption of your total holdings in the POSB Invest-Saver is allowed. No partial redemption will be accepted.
  10. What will my redemption price of the POSB Invest-Saver be?
    Your redemption price would be based on the average redemption price on the Business Day following your redemption instruction, or such other day determined by the Bank in good faith and in a commercially reasonable manner.

    The average redemption price is calculated by dividing the total proceeds from the shares sold by the total quantity of shares sold, based on the aggregated orders of all customers who sell their shares of the STI ETF on the particular redemption date. All customers who redeem the Nikko AM Singapore STI ETF will be accorded same average redemption price.
     
  11. When will my account be credited with the redemption proceeds?
    Your account will be credited within T+7 days after you have submitted your redemption request.
     
  12. How do I terminate my POSB Invest-Saver?
    You can terminate your POSB Invest-Saver at any of our ATMs by following these simple steps:
    • Step 1: Insert your ATM/Debit card and enter your PIN. Go to service menu
    • Step 2: Select the option "Regular Savings Plan Exchange Traded Fund (RSP ETF)"
    • Step 3: Select the option "Termination of RSP"
    • Step 4: Confirm your termination request by clicking on the "continue" button
    • Step 5: The Bank will send you a letter to confirm that your request to terminate has been effected
       
  13. Can I still hold my units in the Nikko AM Singapore STI ETF even after the termination of my RSP?
    Yes, you can hold on to your units in the Nikko AM Singapore STI ETF even if you have terminated your RSP. Should you decide to subscribe to the POSB Invest-Saver again, you can do so via any of our ATMs.
     
  14. Can I subscribe to the POSB Invest-Saver online?
    You may submit a request via an online form at www.posb.com.sg/investsaver for our staff to contact you to take your phone application instructions. Our staff will call you back within 3 business days to confirm and execute your request.
     

Others

  1. Who can subscribe to the POSB Invest-Saver?
    You will be eligible to subscribe to the POSB Invest-Saver if:
    1. You are at least 18 years of age at the date of application
    2. You are not a US Person (defined in Terms and Conditions)
  2. What will happen if there are insufficient funds in my Current or Savings account?
    The deduction for the POSB Invest-Saver will not be successful should there be insufficient funds in your Current or Savings account. If there are 2 consecutive unsuccessful RSP deductions, DBS Bank Ltd reserves the right to terminate the POSB Invest-Saver. Please ensure you have sufficient funds for deduction on the 12th of every month (or next business day should the 12th be a non-business day).
     
  3. What happens to the dividends that are paid out on the underlying shares in the Nikko AM Singapore STI ETF?
    Monies from dividends, cash offers, rights issue and other corporate actions will be credited into your designated debiting account.
     
  4. Can I subscribe to the POSB Invest Saver if I have a joint-alternate Savings / Current Account with the Bank?
    You can subscribe to the POSB Invest-Saver if you have a joint-alternate Current or Savings account with us. However, the POSB Invest-Saver will be subscribed in the sole name of the applicant only.
     

* Based on 1% sales charge on a monthly investment amount of S$100.


Important Notice:

POSB Invest-Saver is not included under the CPF Investment Scheme and Supplementary Retirement Scheme. Investment in the POSB Invest-Saver is by cash only.

Nikko AM Singapore STI ETF is a collective investment scheme that is managed by Nikko Asset Management Asia Limited.

This publication is for general circulation only and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person. The value of the units and the income accruing to the units purchased, if any, may fall or rise. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment. Investors should seek advice from a financial adviser regarding the suitability of the investment product, taking into account the specific investment objective, financial situation or particular needs of each person before making a commitment to purchase the investment product. If you do not wish to seek financial advice, please consider carefully whether the product is suitable for you. Investors should read the relevant product’s offer documents (including the prospectus and Product Highlights Sheet, if any), available at our branches and website, before deciding to subscribe for or purchase any product.

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