CPF Investment Scheme funds up 5.1% in Q1

CPF members who invested their money in funds included under the Central Provident Fund Investment Scheme (CPFIS) received strong average returns of 5.1 per cent in the three months to March 31.

It marked four straight quarters in the black for CPFIS funds.

Unit trusts grew 5.2 per cent, while investment-linked insurance products (ILPs) rose 5.04 per cent, according to fund research firm Thomson Reuters Lipper yesterday.

Equity funds posted positive returns of 6.44 per cent, mixed-asset 4.1 per cent, bonds 1.27 per cent and money market funds 0.19 per cent.

By comparison, in the same period, the MSCI AC Asia ex-Japan index rallied 9.68 per cent, while Citigroup WGBI TR fell 1.78 per cent.

CPFIS-linked funds performed better when viewed over the longer term. The overall performance of these funds was up 14.17 per cent on average in the 12 months to March 31. Unit trusts soared 15.8 per cent on the year and ILPs rallied 13.16 per cent.

For the one-year period, equities (18.55 per cent) outperformed bonds (1.16 per cent), mixed-asset (10.66 per cent) and money market funds (0.64 per cent) on average.

By comparison, the MSCI AC Asia ex Japan Index soared 22.25 per cent, whereas Citigroup WGBI TR fell 0.03 per cent.

Over three years to March 31 this year, CPFIS-included funds reported strong growth of 17.11 per cent on average, accounted for by a gain of 18.71 per cent from unit trusts and 16.27 per cent from ILPs.

Equities led gains with growth of 20.11 per cent, while the money market portfolio posted 1.52 per cent. MSCI AC Asia ex-Japan Index rallied 28.49 per cent and Citigroup WGBI TR rose 7.16 per cent.

Mr Xav Feng, head of Asia-Pacific research at Thomson Reuters Lipper, said: "Reflation is a key global trend and growth expectations are gradually on the rise, while geopolitical tensions continue to impact financial markets. With the US becoming more of a driver of policy uncertainty than a stabiliser, China and emerging markets are gaining significant traction."

He advised investors to sift through data and news to identify solid investment opportunities and to maintain a diversified portfolio.

A version of this article appeared in the print edition of The Straits Times on June 01, 2017, with the headline 'CPF Investment Scheme funds up 5.1% in Q1'. Print Edition | Subscribe