In Singapore, the Central Provident Fund (CPF) acts as the country’s pension scheme to enable working Singapore Citizens and Permanent Residents to save for retirement. The scheme lets employees save-as-they earn. It also addresses healthcare, home ownership, family protection and asset enhancement, and comes with guaranteed annual returns.
Under the CPF Investment Scheme (CPFIS), Singaporeans can invest in CPFIS-included funds such as approved unit trusts and investment-linked insurance products.
For those who invested under the CPFIS last year, there is some good news: According to recent findings by Thomson Reuters Lipper, the overall performance of CPFIS-included funds rose 1.32% on average in Q4 2016. Specifically, CPFIS-included unit trusts increased 2.36% and CPFIS-included ILPs rose 0.69% as of 31 December 2016.
For all CPFIS-included funds, equities posted positive returns of 2.50%, mixed-asset and money market funds grew 0.51% and 0.08%, while bonds posted negative returns of 2.65%. During the same period, MSCI AC Asia ex-Japan index and Citigroup WGBI TR fell 0.66% and 3.08% respectively.
For the one year since December 2015, the overall performance of CPFIS-included funds increased 4.82% on average. CPFIS-included unit trusts rallied 5.43% on the year and CPFIS-included ILPs soared 4.46%.
Meanwhile, Citigroup WGBI TR rose 3.47% and MSCI AC Asia ex Japan Index soared 7.71%. For the one-year period, on average, equities (+5.70%) outperformed bond offerings (+2.39%), mixed-asset (+4.23%) and money market funds (+0.64%).
From December 2013 through to December 2016, CPFIS-included funds reported a strong growth of 11.92% on average, accounted for by a gain of 13.56% from CPFIS-included unit trusts and 11.07% from CPFIS-included ILPs. During this period, MSCI AC Asia ex-Japan Index soared 15.88% and Citigroup WGBI TR rose 11.56%. Equities were the lead gainer with growth of 13.22%, while the money market portfolio posted 1.31% on average.
Xav Feng, Head of Asia Pacific Research, Thomson Reuters Lipper, commented, “CPFIS funds continued to deliver positive performance in the fourth quarter of 2016. President Trump’s economic policies are slated to affect the United States and global markets, as well as the pace of interest rate rises by the U.S. Federal Reserve. Investors should remain cautious for potential surprises or uncertainty. Moreover, China’s debt problem may be further alleviated as the country undergoes structural economic reform. As we look forward into 2017, investors are advised to stay on top of political and economic movements on a macro-level and maintain a diversified portfolio to counteract potential risks.”
Performance of CPFIS-included unit trusts and ILPs during the 3, 12 and 36 month periods ending December 2016:
|Average of CPFIS-included unit trusts & ILPs||CPFIS-included unit trusts||CPFIS-included ILPs|
|3-month period ended December 2016||1.32||2.36||0.69|
|12-month period ended December 2016||4.82||5.43||4.46|
|36-month period ended December 2016||11.92||13.56||11.07|
Source: Thomson Reuters Lipper
Thomson Reuters Lipper is a global research provider in supplying mutual fund information, analytical tools, and commentary.
The Investment Management Association of Singapore (IMAS) and Life Insurance Association of Singapore (LIAS) have appointed Lipper to monitor the performance of all unit trusts and investment-linked insurance products included under the Central Provident Fund Investment Scheme (CPFIS).