How to recognise the best mutual funds in Singapore?

Investing in mutual funds is a great way to build wealth and earn passive income. Mutual funds are large pools of money collected from many different investors and managed by a professional fund manager. The fund manager takes the pooled money and invests it into stocks, bods or other investment vehicles.

Fund managers ensure that, as an individual investor, you have exposure to a wide range of investments without having to do all the research yourself. In addition, they spread your risk across multiple asset classes, which help reduce volatility for each individual investor’s holdings.

Types of mutual funds

There are three main types of mutual funds available in Singapore: Retail Funds, Institutional Funds and Exchange Traded Funds (ETF). Many investors will first start with a regular savings account before moving on to more complex investments. Using a regular savings account is appropriate for some. However, if you are willing to put in the time and effort, mutual funds will bring higher returns on your investment when managed correctly.

Retail Funds

Banks typically manages retail Funds, insurance companies or brokers. These are sold to private investors through bank branches, licensed financial advisers, or online distribution channels. The minimum initial investment required with Retail Funds can be as low as S$500, but the average individual investor may not have enough capital for this kind of fund. However, retail funds offer many advantages over other types of funds in terms of convenience and serviceability.

Institutional Funds

Investors looking at Institutional Funds have more flexibility in managing their investments since cost structures are generally lower than retail funds. In addition, institutional investors are not as constrained by liquidity issues and can therefore invest in a broader range of asset classifications. The minimum investment for Institutional Funds start from S$10,000 and go up to millions of dollars.

Exchange-Traded Funds

They are baskets of securities that trade on an exchange like stocks. ETFs, provide investors with the ability to buy a security that tracks an index, a commodity or a basket of assets. This makes it easier for investors to buy and sell shares in the ETF throughout the trading day. ETFs also have lower expense ratios than other types of mutual funds, making them an attractive option for long-term investors.

Factors to consider when picking the best mutual fund

To determine the best mutual funds in Singapore, you need to consider your investment goals, time horizons and risk tolerances. Investing is about managing risk over the long term. Investors can apply many different successful strategies to their portfolios for investing for retirement or other financial goals.

What is asset allocation?

The best way to start trading in mutual funds is by considering an Asset Allocation approach which splits up your investments based on asset classes like Stocks, Bonds and cash instruments.

Asset allocation is important because it allows you to reduce the risk of your portfolio by diversifying your investments. It’s also crucial to rebalancing your portfolio regularly to ensure that the weightings of each asset class remain in line with your risk tolerance and investment goals. You can use online tools or speak with a financial adviser to help you determine how much to invest in each asset class.


When you know which type of fund you want, it’s essential to do your due diligence and research the different funds available. The best way to do this is by reading the fund’s prospectus, which will give you an overview of the investment objectives, strategies and risks associated with the fund. If you are a new investor, we recommend using a reputable online broker from Saxo Bank and signing up for a demo account. This way, you can practice your trading strategies before investing your own money.

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