Iggy’s Journal: Fund Fees Explained: Why a Small Yearly Percentage Can Take a Big Share of Your Returns
Iggy’s Journal: Fund Fees Explained: Why a Small Yearly Percentage Can Take a Big Share of Your Returns
Wednesday 28 Oct 2026 | Midday
The Numbers
A fund can charge an expense ratio of 1.5% a year whether it gains or loses.
An illustration from the episode: a S$100,000 fund earns 6% a year before costs. A 1.5% expense ratio leaves 4.5% a year. A fund costing 0.3% leaves 5.7% a year. The comparison runs for 25 years.
For CPF money, the CPF Board set the sales charge cap on new CPF Investment Scheme purchases at 0% from 1 October 2020.
My Personal Take
The expense ratio is the one number in a fund that is printed before anything happens, and it is charged in good years and bad. How far apart do 4.5% and 5.7% a year end up on S$100,000 after 25 years? And what did the 2020 change to CPF Investment Scheme charges leave in place? The episode works through the sums step by step.
📺 YouTube: https://youtu.be/OxSSPTTZAe4
Cheers, Iggy 🦖
Not financial advice. Iggy’s Forensic Compliance Standards apply.
Sources: CPF Board: Reduction of CPF Investment Scheme fees deferred to 1 October 2020
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