Grab recently launched Earn+, a second investment option for you on top of Grab AutoInvest.
In this article, we review its features and share who we think it’s best for!
What Is Grab Earn+?
As a part of Grab’s financial unit GrabFin, Grab Earn+ was launched in May 2022.
Grab Earn+ is a low-risk investment product letting you invest in diversified portfolios with prospects of stable moderate returns of 2% – 2.5% p.a.
Compared to other similar services in the market, the return seems to be good enough, although unguaranteed.
Here, you invest in short-term fixed-income securities through actively managed funds-based conservative portfolios.
You get to invest in unit trusts managed by Fullerton Fund Management (Fullerton) and UOB Asset Management Ltd (UOBAM).
Whether it’s about investing or about withdrawing your money, you can do it conveniently at any time you want.
However, given that Grab Earn+ is a financial service offered by Grab, you have to download the Grab app to use this service.
Grab Earn+ Investment Methodology
It invests in fixed income funds with short maturity ranges in order to achieve its objectives of low drawdowns and low volatility (1% of annualised standard deviation).
Primarily, Grab Earn+ portfolio invest in 3 types of strategies based on 3 different fund types.
1. High Stability with a Very Short-term Investment Horizon
In order to achieve low-risk with high stability, this investment strategy utilises money market funds, which invests in instruments with very low risk and very high liquidity, such as cash, cash equivalents, and short-term debt securities with a maturity limit of 1 year or less.
This strategy results in a low return with a low drawdown.
Grab mentions that a typical Money Market fund returned 0.1% – 0.8% annually in 2020 and 2021 and had a maximum drawdown of less than 0.1%.
2. A Higher Return with Short-term Bond Funds
Grab may leverage this strategy by focusing on investment-grade corporate bonds and government bonds with a short-term maturity limit that is typically below 3 years.
This strategy yields relatively higher returns compared to the first strategy, where the drawdown is also higher.
According to Grab, a short-term fixed income fund typically returns 0.3% to 3.2% per year and has a maximum drawdown of 2%.
3. Diversified with Long-term Bond Funds
This third investment methodology focuses on the diversification of the investment portfolio with long-term investment-grade corporate bonds and potentially a small portion of high-yield bonds.
This strategy can produce comparatively higher returns than the previous strategies. However, the drawdown risk involved is also higher.
There are no mentions of the typical expected returns and potential drawdowns.
Other Facets of Investment Methodology
As for other facets of the entire investment methodology, Grab Earn+ ensures the quarterly rebalancing of your investment portfolio with the use of the latest market data and forecasts.
Note that, in case of necessary allocations, the system automatically transacts sell and buy orders of the investment funds for the alignment of the portfolio.
Aside from that, the performance and behaviour of the underlying funds are also monitored.
Whenever there’s the requirement of switching out of the investment funds or updating the involved asset allocation, this is done during quarterly rebalancing or on an ad hoc basis.
Following its investment objective, Grab Earn+ portfolios invest mainly in Singapore government bonds, investment-grade corporate bonds, and bank deposits.
The objective of its investment methodology is always to obtain substantially higher returns compared to bank-offered fixed deposits that retail investors have access to.
Respective Asset Classes
Grab Earn+, as you already learned, lets you invest primarily in bonds through a unit trust —
- Money Market Funds
- Short-term Bond Funds
- Bond Funds
However, at this point in time, the portfolio invests in short-term bond funds, namely the Fullerton Short-term Interest Rate Fund and United SGD Fund.
As both these funds focus on producing stable returns while involving low risks, these are quite ideal to fulfil the investment objective of Grab Earn+.
The following table manifests the Grab Earn+ portfolio split according to different funds.
|Fund Type||Portfolio Allocation|
|Short-term Bond Funds||Fullerton Short-term Interest Rate Fund||50%|
|United SGD Fund||50%|
As the portfolio composition might change depending on market conditions, the above might change depending on when you read this article.
Grab updates its portfolio composition here.
Grab Earn+ Fees & Charges
The fee structure at Grab Earn+ is transparent and competitive.
To your relief, the platform doesn’t charge any subscription, redemption, or management fees for investing in Grab Earn+.
Concerning the funds, the average total payable charge is 0.59% per annum. This includes fund management fees, along with certain other costs like custodians, auditors, trustees, legal advisers, etc.
Grab Earn+ does not charge you any extra fees apart from this all-inclusive fee.
For Grab to earn a portion, it takes 0.28% of the existing fund fees from Fullerton Fund Management and UOB Asset Management Ltd.
There are no upfront fees or transaction charges.
Minimum Deposits & Withdrawals with Grab Earn+
At Grab Earn+, there are no limits on deposits and withdrawals. You can start with as low as S$1, no matter whether it’s your deposit or withdrawal.
There’s no maximum limit either.
Funding & Withdrawal Methods at Grab Earn+
When it comes to transactions at Grab Earn+, the platform currently only supports SGD transactions.
Grab Earn+ introduces 2 funding methods to transfer your funds to GrabInvest —
- Electronic Bank Transfers (FAST)
*Note that Grab Earn+ accepts funds only from Singapore bank accounts as of now. Considering that the platform is quite new, more funding options might be available in the future.
Note that you can’t fund your Grab Earn+ account from GrabPay Wallet.
As for withdrawing your funds, Grab Earn+ has introduced only 2 withdrawal methods – FAST (Fast And Secure Transfers) and your GrabPay Wallet.
For FAST withdrawals, it must be an account in your own name.
For withdrawals to your GrabPay Wallet, you can only use up to 90% of your available withdrawal amount.
The instant withdrawal facility to your GrabPay Wallet lets you to use your funds anytime at your favourite Grab services including GrabFood, GrabExpress, GrabMart, etc., or to pay merchants accepting the GrabPay.
To be able to open a Grab Earn+ account, you must fulfil the following criteria:
- First, you need to be a Singaporean Citizen, Singapore Permanent Resident (PR), or Specified Pass Holder to access Grab Earn+.
- Second, you have to be 18 years old at least to open a Grab Earn+ account.
Is Grab Earn+ Safe?
When talking about safety and security, the first point that comes up is that GrabInvest (S) Pte. Ltd. — the larger unit holding Grab Earn+ is licensed by the Monetary Authority of Singapore (MAS) with the licence no. of CMS100908.
Secondly, your funds and investments at Grab Earn+ are segregated from those of their own and their underlying asset managers.
A separate client account holds all your funds, whereas your investments are kept in custody accounts held by licensed regional financial institutions.
While your portfolios at Grab Earn+ are managed by best-in-class asset managers like Fullerton Fund Management (Fullerton) and UOB Asset Management Ltd (UOBAM), your assets are kept and maintained by licensed custodians appointed by Fullerton, UOBAM, and Schroders.
To be certain, the Fullerton-appointed custodian is The Hongkong and Shanghai Banking Corporation Limited, whereas the UOBAM-appointed custodian is State Street Bank and Trust Company.
Who Is Grab Earn+ Best for?
A good return with low drawdown portfolio can be the dream of every investor regardless of his/her level.
However, it’s a matter of time to see if Grab Earn+ can provide you with its promised returns.
It is evident, however, that every investor will benefit from their service, including new investors, those with tight budgets, and those with limited time and/or interest in managing their own accounts.
Apart from that, if your risk appetite is remarkably low while expecting stable, relatively higher returns than fixed deposits, then Grab Earn+ is for you.
Otherwise, you can consider using Earn+ as a cash management account – which we think is what it’s similar to.
However, these solutions, like the GrabEarn+, does not guarantee your capital and returns.
But if you’re looking to invest in equities and are looking for much higher returns, then the Grab Earn+ is not for you.
Here are some alternatives.
|Syfe Wealth||Start investing from just S$1 into various portfolios based on your risk tolerance.||Those with small (and big) amounts to invest in the long-term.
Looking for better expected growth than 2.5% p.a.
Those with a higher risk appetite.
Those looking for someone to manage their investment.
|Webull Singapore||Start investing from as low as US$5 into fractional shares in the US markets.||Those with small (and big) amounts to invest in the long-term.
Looking for better expected growth than 2.5% p.a.
Those with a higher risk appetite.
Those looking to manage their own investments.
By assessing Grab Earn+’s features and facilities, we can conclude that GrabInvest’s goals and initiatives are admirable.
By offering this financial service, they are opening an avenue for everyone to invest from as little as S$1, while taking over portfolio management for them.
Is Grab Earn+ for everyone?
I don’t think so. But it’s definitely attractive in its own way.
Looking to invest but unsure how?
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