Best Execution Policy
Our commitment
In all cases, Endowus endeavours to ensure that comparable client orders are executed on the best available terms, and in accordance with the time of receipt of interest of such orders.
This policy covers mutual funds and exchange-traded funds (ETFs) bought or sold through Endowus.
Mutual funds
Subscriptions
Typically, we consolidate and submit customers’ orders on a daily basis. Please refer to the link here for information on how we process investment orders.
For funds with limited subscription availability, Endowus takes into account the following factors:
- the available subscription capacity of the fund;
- the total amount of interest we receive; and
- the interest indicated by each client and the timing at which they indicated their interest.
Endowus operates in both Singapore and Hong Kong through separate legal entities. For such funds that are available to clients of both entities, we will split the available subscription capacity equally between these entities. To the extent that there is unused capacity in one entity, it will be re-allocated to the other entity.
Within each entity, we distribute the available subscription capacity among clients based on their indicated interests. This process involves:
- Prioritising larger orders. In the case of orders of the same size, the earlier order will be prioritised.
- Based on the above sequence, distributing available capacity to meet as much of each client's requested interest as possible. Depending on the available capacity, each client may be allotted the full or partial amount of his indicated interest, subject to the minimum order amount.
- Inviting clients who have been allocated capacity to subscribe for their share.
Should a client ultimately decide not to follow up with the subscription, we may decide to re-allocate the allotted capacity to other allotted clients, on a pro-rated basis, or to offer the client’s share to the next available client, based on the prioritisation described above.
Redemptions
Similarly, for funds with gating limits, Endowus takes into account:
- the available redemption capacity of the fund;
- the total amount of redemption requests we receive;
- the redemption amount indicated by each client and the timing at which they indicated their redemption request.
When total redemption requests exceed the fund’s gating limit, Endowus applies a pro-rata process as follows:
- Prioritising all redemption requests where the redemption request on a customer level does not exceed the gating limit based on the customer’s own holdings in the fund;
- Fulfilling the requests of all remaining customers, up to the gating limit based on each remaining customer’s own holdings in the fund;
- Pro-rating any remaining portion of the fund’s overall gating limit proportionally across the remaining customers with unfulfilled redemption requests.
- Should any customer still have unfulfilled redemption requests, the customer’s redemption request will be processed across the following redemption cycles and based on the gating limits set out in the relevant fund documents. Please note that Endowus does not guarantee processing the redemption in the immediate redemption cycle but will do so on a best-effort basis as it is subject to operational requirements.
Unlike subscription capacity, redemption gating limits are calculated separately for Endowus Singapore and Endowus Hong Kong customers.
ETFs
Same price for every client in a batch
Your ETF order is combined with other Endowus clients’ orders into a single block order and executed once each business day. All orders in the same batch are executed at the same price.
Order cut-off and execution times
- Orders placed before 12:30 PM (SGT) on a business day are executed that day.
- Orders placed after 12:30 PM (SGT), or on a non-business day, are executed the next business day.
- If the ETF’s home market is closed for a holiday, execution may take longer.
- Execution usually takes place during the ETF’s market trading hours. For overseas-listed ETFs, this may be outside Singapore business hours.
Orders may be cancelled before the 12:30 PM (SGT) cut-off.
How your order is executed
Our broker-dealer sends the block order to its execution partners. Depending on the size of the block order and the ETF’s trading volume:
- Smaller orders are generally placed on the stock exchange, which ensures they get filled.
- Larger orders are generally sent to market makers, who are asked to compete on price. The order is executed at the best quote received.
We regularly review how orders are routed to ensure this approach continues to give clients the best available terms.
Where an order can’t be filled in full (pro-rated allocation)
Sometimes, fewer units are available than are needed to fulfil all orders in a batch. When that happens, units are allocated in proportion to the size of each client’s order. No client is prioritised over another.
Example: 100 units are available. Client A orders 80 units while Client B orders 50 units (130 in total), each client receives about 77% of their order: Client A receives about 62 units and Client B about 38 units.
When an order can’t be executed
In unusual market conditions, such as a market disruption or when no quotes are received, your order may be partly filled, delayed or not executed. The order is then carried forward to the next business day. If the order is cancelled, the money is returned to your cash balance. We will notify you in either case.
Key risks for ETF transactions
- Market movement: The price shown when you place an order is indicative only, based on the most recent closing price. The market can move up or down before your order is executed.
- Execution delay: Orders are executed once a day, not in real time. Weekends, market holidays and carried-forward orders lengthen the gap, and a longer gap means the price can move more.
- Price difference: Your execution price may differ from the indicative price, and from the ETF’s net asset value (NAV). Your final price, number of units and amount are confirmed only after execution.
- Liquidity: ETF trading relies on market makers. In stressed markets, they may quote wider prices, quote for only part of an order, or not quote at all. Your order may then be executed at a less favourable price, partly filled, delayed or not executed. Some ETFs trade less often than others, which makes this more likely.
- Overseas-listed products: These carry additional risks. Please read the Risk Warning Statement before investing.
Policy review
We review this policy and the quality of our order execution regularly, and will update this page when our practices change.