By Charissa Yong

POSB is launching funds that let investors buy into two local exchange traded funds (ETFs).

ETFs are investment vehicles that can be bought and sold like a share. They diversify risk by buying a basket of stocks on an exchange, instead of buying only an individual stock.

POSB's MyHome Fund buys into the DBS STI ETF, which buys Singapore shares. Its ABF Singapore Bond Index fund invests in Singapore Government bonds.

Customers have three choices with POSB.

They can choose the HomeSteady portfolio, which invests 80 per cent in the ABF index and 20 per cent in the STI ETF, or the HomeBalanced portfolio, which invests 50 per cent in both.

The third portfolio, HomeGrowth, invests 20 per cent in the ABF index and 80 per cent in the STI ETF.

'It's the first fund that packages two ETFs together in this manner and the first fund in Singapore to buy solely into ETFs,' said Mr Rajan Raju, head of the DBS consumer banking group.

'We can offer the full range of portfolios to choose from, depending on an individual's risk appetite.'

He said the fund enables Singaporeans to invest in the country's growth and success while being easy to understand.

MyHome Fund can be bought into at 52 POSB branches, more than 900 ATMs and via Internet banking. The annual management fee is 0.5 per cent and the initial sales charge is 0.3 per cent. Investments start from $1,000.

A key aspect of the fund is its long-term perspective, said POSB's managing director of consumer banking, Mr Davy Wee.

'Singaporeans have been well-trained to save but not that well-positioned for retirement.

'This fund would encourage Singaporeans to take a longer-term perspective instead of just saving on an everyday basis,' said Mr Wee.

The chief executive of DBS Asset Management, Ms Deborah Ho, added: 'It's a start at providing a long-term wealth accumulation solution.'

This article was first published in The Straits Times.