Thinking of growing your money but don’t want to stare at stock charts every morning like you’re applying for a CFA? Mutual funds might be the chill-but-smart path for you. Whether you’re saving up for your BTO, planning your big day, or just trying to get more out of your ang bao stash, this guide breaks it all down: no jargon, no gatekeeping, just what you need to know to start investing confidently in mutual funds in Singapore.

What Are Mutual Funds, Anyway?

Let’s break it down: a mutual fund is like a giant steamboat pot where everyone throws in some ingredients (read: money), and a professional chef (aka fund manager) decides what to cook. Instead of picking stocks yourself, the fund manager invests your money across a mix of assets (could be stocks, bonds, or other instruments) based on the fund’s strategy.

TL;DR:

• Mutual fund = pooled money from many investors
• Managed by professionals
• Offers diversification and convenience

It’s a hands-off way to invest, great for people who don’t want to micromanage their money every day.

Why More Young Singaporeans Are Turning to Mutual Funds

In a time when expenses are climbing faster than MRT fare increases and side hustles are the norm, smart investing is no longer optional — it’s essential. And mutual funds are gaining traction with the 20s to 40s crowd for good reason:

The Perks

• Diversification Spread across sectors, geographies, and asset classes. If one market zigs, another might zag, and your portfolio survives.
• Professional Management No need to track global markets or earnings reports. Let someone with experience do the work.
• Low Barrier to Entry Many funds let you start with just $100/month, cheaper than most gym memberships.
• Liquidity Unlike insurance-linked products, you can redeem your units any time (though it’s best to let them sit for the long game).

The Caveats

• Management Fees Actively managed funds often charge higher fees (1%–2% annually). Always read the fact sheet or prospectus.
• No Stock-Picking Freedom You don’t get to decide which companies the fund buys or sells — that’s the manager’s call.
• Returns Aren’t Guaranteed All investments carry risk. Past returns are a reference, not a promise.

Types of Mutual Funds in Singapore

There’s a buffet of fund types out there, here’s a breakdown to help you pick what suits your appetite and risk tolerance:

Most local banks and platforms let you filter mutual funds by category, objective, or risk rating — make use of those tools when Browse.

How to Choose the Right Mutual Fund in Singapore (Without Guesswork or TikTok Advice)

Before you throw your hard-earned money into any mutual fund, pause. Just because your colleague’s cousin made 18% last year doesn’t mean it’s the right fit for you.

Choosing a mutual fund is like shopping for shoes: if it doesn’t fit your size, style, or walk, you’ll regret it with every step.

Here’s how to size up a fund properly, whether you’re investing through a bank, Fundsupermart, or robo-advisor.

1. What’s the Fund’s Goal?

Every fund has an investment objective and it’s not just “make money.” It could be:

• Capital growth (grow your money over time)
• Income (generate regular payouts)
• Capital preservation (keep your money safe and stable)

Pro tip: Match the fund’s goal to your life goals. Saving for your kid’s uni fees in 8 years? Growth fund. Planning your BTO reno next year? Low-risk, please.

2. Check Past Performance (Long-Term Only)

Ignore the flashy “last 1-year return” figure. Look at how the fund did over:

• 3 years
• 5 years
• 10 years (if available)

You want consistency, not one lucky bull run. Also check how it performed during rocky years like 2020 or 2022. If a fund crashes every time the market sneezes, maybe give it a pass.

3. Know the Fees (Because They Never Tell You Loudly)

Fees may look small (1% or 2%) but they eat into your returns every single year.

• Actively managed funds: Usually 1% – 2%
• Index funds: Around 0.2% – 0.5%

Look for the Total Expense Ratio (TER) in the fund factsheet. Lower is generally better, unless the manager has a track record to justify the premium.

4. Who’s Managing the Fund?

Check:

• The fund manager’s experience
• How long they’ve been managing this fund
• Their track record with similar strategies

If it’s a fresh face with no history? Might want to monitor a bit more before committing.

5. What’s Inside the Fund? (Yes, You Can Check)

Most platforms let you see the fund’s:

• Top 10 holdings
• Sector breakdown (e.g. tech, finance, healthcare)
• Geographical exposure (e.g. 60% US, 10% SG, 5% China)

This helps you avoid surprises like being too concentrated in one region or industry.

Example: If you’re already buying US tech stocks yourself, and the fund is 80% in Apple/Nvidia/Meta… you’re doubling up.

How to Start Investing in Mutual Funds in Singapore

Don’t worry, you don’t need to be a finance bro to get started.

Step 1: Set a Clear Goal

Think long-term: Are you saving for your BTO, kids’ education, or early retirement? Your time horizon affects your fund choices.

Step 2: Match Your Fund to Your Timeline

• Less than 3 years → Stick to low-risk (money market or short-term bond funds)
• 3–7 years → Try balanced or index funds
• 7+ years → Go for equity funds to maximise potential returns

Step 3: Choose Where to Invest

Pro tip: Use CPFIS (CPF Investment Scheme) for selected funds if you’re investing CPF Ordinary Account savings.

Step 4: Invest Regularly

Set up a Regular Savings Plan (RSP). Helps you ride out market ups and downs through dollar-cost averaging.

Example: $200/month over 5 years = $12,000 invested, but market fluctuations help you average out your cost per unit.

Step 5: Review Quarterly, Don’t Overreact

Set a reminder every 3–6 months. Check performance, rebalance if necessary — but don’t panic-sell during every dip.

Mutual Funds vs ETFs vs Robo-Advisors

A hybrid approach works well:

• Mutual funds for stability
• ETFs for efficiency
• Robos for automation

Are Mutual Fund Returns Taxed in Singapore?

Short answer: No capital gains tax. Singapore’s tax system is super investor-friendly.

However…

• Dividends from foreign funds (especially US-based) may be taxed at source, usually 15–30%
• Locally domiciled funds often reinvest dividends, so no local tax applies

Always read the fund factsheet and consult a tax advisor if you’re investing large amounts or using cross-border platforms.

Final Thoughts: Are Mutual Funds Worth It in 2025?

For many Singaporeans, mutual funds are the first step from saving to investing. They offer structure, diversification, and professional oversight, perfect for those who want to grow their wealth without needing to micromanage every market move.

Whether you’re working towards early retirement, buying a home, or just beating inflation — mutual funds provide a low-effort, high-leverage way to build up your financial future.

TL;DR – Quick Summary for the Busy Investor

• Mutual funds = easy, diversified, and professionally managed
• Start small, even $100/month is enough to build momentum
• Pick funds based on your goals and timeline
• Use platforms like Endowus, FSMOne, or Syfe for better access and lower fees
• Review every few months, but don’t panic over daily market noise