CPFIS funds up 7.82% on average in Q1

Funds under the Central Provident Fund Investment Scheme (CPFIS) posted positive returns of 7.82 per cent on average for the first quarter ended March 31.

Average returns from CPFIS-included unit trusts rose 8.48 per cent, while returns on investment-linked insurance products (ILPs) climbed 7.34 per cent, said fund research firm Lipper, which has been appointed to monitor the performance of the various investment products under the scheme.

The CPFIS allows members to invest their savings in insurance products, unit trusts, fixed deposits, bonds and shares.

Across all CPFIS-included funds, equity funds performed the best at 9.85 per cent in average returns, followed by mixed-asset funds at 6.46 per cent. Bonds enjoyed an average return of 1.59 per cent, while money market funds saw an average return of 0.36 per cent.

In the same period, the MSCI World TR USD representing global equities rose 11.94 per cent, and the MSCI All-Country Asia ex-Japan, a widely cited measure of Asian equities, rallied 10.75 per cent. Meanwhile, the FTSE World Government Bond Index rose 1.11 per cent.

Lipper head of Asia-Pacific research Xav Feng said CPFIS funds achieved encouraging returns, given the United States and global markets' rebound in the first quarter of this year. He added that the US Federal Reserve has kept interest rates on hold despite pressure from President Donald Trump.

"Meanwhile, the trade deal between the US and China is expected to include renewed commitments from China to strengthen its protection of intellectual property and provide greater access to Chinese markets. However, it's still a big uncertainty before the two sides come to a conclusion," Mr Feng said.

For the one-year period ended March this year, the overall performance of CPFIS-included funds saw a slightly positive return of 0.80 per cent on average. Unit trusts increased 0.41 per cent on the year and ILPs rose 0.91 per cent.

During the same period, the MSCI All-Country Asia ex-Japan Index fell 1.81 per cent. Bond funds outperformed the mixed-asset class, rising 2.71 per cent on average, while mixed assets posted a rise of 1.37 per cent.

A version of this article appeared in the print edition of The Straits Times on June 04, 2019, with the headline 'CPFIS funds up 7.82% on average in Q1'. Print Edition | Subscribe