Corporate bonds
Bond Unit Trusts (Funds)
Actively managed mutual funds where a professional picks and trades bonds for you, available through fund platforms and usable with SRS.
What it is
In plain language.
A bond unit trust is a managed fund that holds a portfolio of bonds chosen by a professional fund manager. You buy units at the fund's net asset value, and the manager decides which bonds to hold, when to switch, and how much credit and interest-rate risk to take, aiming to beat a benchmark.
Compared with a bond ETF, a unit trust is usually actively managed rather than index-tracking, can reach into niche areas like Asian high-yield or emerging-market debt, and is priced once a day rather than traded live. That active management comes with a higher annual fee.
How it works
In Singapore, in practice.
You buy bond unit trusts through fund platforms such as Endowus, FSMOne, dollarDex, POEMS or your bank, often from a few hundred or a few thousand dollars. Many are SRS-eligible, so you can invest your SRS contributions into a bond fund rather than leaving the cash idle, which keeps your SRS tax relief working while the money stays invested.
Funds charge an annual management fee, and historically some carried upfront sales charges, though clean share classes and platforms like Endowus have cut or rebated trailer fees. Always compare the fund's expense ratio, because high fees eat directly into bond returns, which are modest to begin with.
Income funds distribute coupons regularly; accumulation share classes reinvest them. The unit price still rises and falls with interest rates and credit conditions, so a bond unit trust can and does lose value in a given year.
Run the numbers
See it in your own figures.
See what a top-up to this wrapper could save you in tax this year.
What an SRS top-up could save in tax
The Supplementary Retirement Scheme lowers your taxable income. This shows the tax saved if you contribute the maximum this year.
Where it sits
Its place in the instrument map.
A sound plan is built in layers, from a guaranteed base up to small, high-risk satellites. This is the role Bond Unit Trusts (Funds) plays, and the layers around it.
Small, high-risk positions you could afford to lose entirely.
Direct stocks and REITs held for long-run growth.
Funds, ETFs, and bonds that spread risk across many holdings.
Government-backed income and the SRS tax wrapper.
Guaranteed and liquid: your CPF base and emergency cash sit here.
The trade-offs
What it does well, and what to watch.
Good for
- Investors who want professional management and access to specialised credit markets
- Those investing SRS or CPFIS monies who prefer a managed bond option
- People who prefer a single daily-priced fund over picking individual bonds
Watch outs
- Active management fees are higher than ETFs and reduce already-modest bond returns
- Some funds and high-yield strategies take more credit risk than the name suggests; read the mandate
- High-distribution funds may pay income partly out of capital, which slowly erodes your principal
- Unit prices fall when rates rise or credit weakens, so capital is not guaranteed
In the market
What this looks like.
Real Singapore examples, shown to make the instrument concrete. These are illustrative, not endorsements.
How it connects
Instruments that work with this.
Bond ETFs
Exchange-listed funds that hold a basket of bonds, giving instant diversification across many issuers in one share you can trade like a stock.
Full breakdown Corporate bondsSGD Corporate Bonds (Wholesale)
Bonds issued by Singapore companies and statutory boards that pay a fixed coupon, sold mostly in large lots to institutions and accredited investors.
Full breakdown SRSSRS Account (the wrapper itself)
A voluntary, tax-deferral account where contributions cut your taxable income now and only half of withdrawals are taxed later.
Full breakdown Corporate bondsRetail Corporate Bonds (SGX-Listed)
Corporate bonds offered to ordinary investors on SGX in small lot sizes, so you can buy a single bond without private-banking minimums.
Full breakdownSources
Where the facts come from.
- Bond unit trusts are available to Singapore investors through fund platforms such as Endowus, FSMOne, dollarDex and POEMS, and many are eligible for investment of SRS monies.MoneySense, Investing with your SRS account; platform fund libraries (Endowus, FSMOne)
- SRS contributions qualify for income tax relief and can be invested rather than left as cash; SRS investing keeps the relief while the money is deployed.IRAS, SRS contributions and tax relief: iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/special-tax-schemes/srs-contributions
See where Bond Unit Trusts (Funds) fits your own plan.
This is educational, not advice. When you want a detailed look at how this fits your situation, a licensed adviser will map it to your income, CPF, and goals.