We thank Mr Tay Kim Lee for his feedback ("Review criteria for CPF investments"; last Tuesday).

As the administrator of the CPF Investment Scheme (CPFIS), the Central Provident Fund Board works closely with an external investment consultant to evaluate if the funds seeking inclusion under CPFIS are of good quality at the point of entry with reasonable investment costs. The evaluation consists of both quantitative and qualitative analyses, covering criteria such as performance consistency, management tenure, expenses, fund managers' track record and investment process.

There are currently more than 130 investment-linked products and 90 unit trusts included in the CPFIS. These include equity funds, bond funds and mixed asset funds which cover major geographical regions.

This mix of funds offers choices to CPF investors. The investment returns on these funds depend on various factors, such as investors' risk appetite and investment horizon, market cycle which the fund undergoes and costs of investment.

To help CPFIS investors achieve better net returns, the CPF Board has, since 2006, progressively lowered the cost of investing by setting caps on sales charges, funds' total expense ratio and wrap fees.

We will continue to review the CPFIS scheme to better meet the evolving needs of our members.

CPF members who are risk-averse can leave their CPF savings with the CPF Board to earn risk-free interest rates of up to 3.5 per cent and 5 per cent in their Ordinary and Special accounts respectively.

Irene Kang (Ms)

Group Director of Communications

Central Provident Fund Board