FSM Junior: Only in 2013, enjoy 0% sales charge when you RSP!
Author : Fundsupermart.com
FSM Junior: Give your child a better education with RSP
Picture this: Your child has been offered an opportunity to develop his dream. But the doors to his dream may close on him after barely having been opened because you do not have enough finances to support him. Next, picture this: You want to cultivate your child to be the next scholar. But the doors to his bright future may close on him because you do not have enough finances to support him.
Work towards your financial goal: Children's education
In Singapore's competitive environment, every parent strives to ensure their children receive the best education. According to a Straits Time article (dated 3 Feb 2012), tertiary education was the largest single cost in a child upbringing.
The cost of sending your child to an Australian university cost more than a quarter of a million (see Table 1)! How do you ensure you have been saving enough to send your child or children to university?
Table 1: Estimated university education costs
2011
2031
Countries
Total costs
Total costs
Inflation (p.a.)
Singapore
$61,000
$103,000
2.66%
U.S.
$325,000
$990,000
5.72%
U.K.
$170,000
$525,000
5.80%
Australia
$128,000
$308,000
4.47%
Source: Straits Times 2009 compilations and iFAST estimates.
Note: The figures are in SGD, includes inflation rate and rounded off to the nearest thousand.
Here at Fundsupermart, we have the investment plan that grows with your child and provides financial security – the new FSM Junior programme. The FSM Junior programme consists of Regular Savings Plan (RSP) which utilitses the investing concept of "dollar cost averaging" (click here to find out more), which requires you to invest a fixed amount of money regularly.
RSP acts as an alternative source of income and at the same time, it instills discipline to save regularly at an affordable cost. With no lock-in period, you can choose to stop the RSP as long as you meet the minimum holding of the fund. How much do i need to save a month? The amount to set aside each month has to be a comfortable budget that sits well with your expenses so you won't risk stopping the RSP.
First, determine your time frame and risk appetite before concluding your budget. Table 2 serves as a reference on the portfolio assumptions with an investment budget of $500 per month.
Table 2: Investment portfolio after 10 / 20 years based on following returns
Holding period
Annual rate of return on portfolio - 4% (Lower risk)
Annual rate of return on portfolio - 7% (Medium risk)
Annual rate of return on portfolio - 9% (Higher risk)
10 years
$74,000
$86,000
$96,000
20 years
$183,000
$256,000
$322,000
Source: iFAST compilations.
Note: All figures are rounded off to the nearest thousand, excluding fee charges.
What should I RSP into?
If it is over a longer time horizon, you can afford to be more aggressive and allocate all in equities. As the years go by, allocate a larger portion to lower risk funds or liquidate to cash to protect your portfolio. Be sure to rebalance your portfolio annually to ensure it is still aligned with your financial goals. Here's a list of globally diversified funds to consider for your first portfolio. We recommend you pick a global equity and a global bond fund.
To encourage parents to kickstart RSP, we have waived off RSP sales charge for all funds under the RSP Special List in 2013!
How do I start?
The FSM Junior programme is applicable for anyone below age 16, so help your child and spread the good news to your nieces and nephews. First, open a beneficiary account.
Next, you need to email to clienthelp@fundsupermart.com with the beneficiary's NRIC number when the account is opened in order to qualify for the sales charge waiver.
That's all! If you are new to unit trusts or need help in fund selection, you can seek advisory service from our Client Investment Specialists at advisory@fundsupermart.com.
Terms and Conditions:
1. The promotion is valid only for RSPs deducted in 2013 (last RSP deduction date for 2013 is 10 Dec 2013).
2. Fundsupermart.com reserves the right to amend the Terms and Conditions without prior notification.
This advertisement is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. An investment in the fund(s) is subject to investment risks, including the possible loss of the principal amount invested. No investment decision should be taken without first viewing a fund's prospectus, which is available from the fund manager or www.fundsupermart.com. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. The value of units and the income from them may fall as well as rise. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. Investors may wish to seek advice from a financial adviser before making a commitment to invest in units of a fund. In the event an investor chooses not to seek advice from a financial adviser, he/she should consider whether the fund is suitable for him/her.
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