Charges involved with CPF investing

https://www.cpf.gov.sg/Assets/members/Documents/INV_AnnexD.pdf

According to the documentation above, it would appear that the charges for investing with CPF is pretty hefty.

Assuming that I am investing 1000 units of Singapore (Z74), trading at 3.3$ a share.

That would be a cost of $3300 PLUS the following charges

One Time Fees
-brokerage fee $25
-CDP clearing, SGX Trading Access Fee which is 0.04% of trade amount (in this case, $1.32)
-CDP settlement fee of $0.5
-Up to $2.50 per 1,000 shares/units, with  maximum  charge  of  $25  per transaction   (for   shares,   REITs, corporate bonds, ETFs and statutory board bonds) which means it will be $2.50

suppose you are buying a $0.30 a share stock, this can be potentially expensive

So for the Singtel example, we are looking at $29.32 total for one-time charges. Since when we sell it, it will be another round of cost, which is $58.64 in total.


Recurring Fees
-$2 per counter per quarter, minimum of $5 per quarter.

let's assume we are holding for a period of 3 years, that would be  $60

Total charges after 3 years is $118.64

Assuming we get a 2016-era dividend yield for the next three years with zero capital gains, you would have received $525 in dividends.

Net profit after three years is $525-118.64-60= 346.36
For an investment of $3300, your net gain is 10.5% after 3 years. which works out to be actually a 3.5% yield.

The odds are, if you are careless with your valuation work, you are likely to lose money investing small amounts with CPF, as compare to the 2.5% yield (as of writing) in CPF-OA. This is more so if you are investing in stocks less than a dollar per share.

Hence, the motivation to buy high yielding, >5 dollars per share stock is high with CPF.