CPF Investment Scheme funds up 3.4% in 2nd quarter

CPF members who invested in funds that are part of the Central Provident Fund Investment Scheme (CPFIS) reaped average returns of 3.4 per cent in the three months to June 30.

That marked five straight quarters in the black for such funds.

During the same period, unit trusts rose 3.26 per cent, while investment-linked insurance products (ILPs) increased 3.47 per cent, according to fund research firm Thomson Reuters Lipper yesterday.

Equity funds posted positive returns of 4.14 per cent, mixed-asset added 2.99 per cent, bonds 1.18 per cent and money market funds 0.15 per cent. By comparison, the MSCI AC Asia ex-Japan index, a widely cited measure of Asian equities, rallied 6.81 per cent in the same period while a measure of bond returns, the Citigroup World Government Bond Index was up 1.39 per cent.

CPFIS funds delivered an average return of 8.76 per cent for the half year to June 30, with unit trusts rising 8.77 per cent and ILPs up 8.75 per cent. CPFIS-linked funds performed better when viewed over the longer term. Their overall performance was up 17.22 per cent on average in the 12 months to June 30. Unit trusts soared 19.21 per cent over the same period while ILPs rallied 16.01 per cent.

Equities for the year were up 22.77 per cent on average, outperforming bonds which rose marginally at 0.99 per cent, mixed asset at 13.02 per cent and money market funds on 0.60 per cent.

By comparison, the MSCI AC Asia ex-Japan Index shot up 29.98 per cent for the 12 months to June 30 while Citigroup WGBI TR fell 1.93 per cent.

Taking an even longer view, CPFIS-included funds posted strong growth of 16.91 per cent on average for the three years to June 30, led by a gain of 17.97 per cent from unit trusts and 16.39 per cent from ILPs.

Equities recorded growth of 20.04 per cent, while bond funds were up 8.91 per cent over the three years. By contrast, MSCI AC Asia ex-Japan Index rallied 29.02 per cent and Citigroup WGBI TR rose 7.17 per cent.

Mr Xav Feng, head of Asia-Pacific research at Thomson Reuters Lipper, said: "CPFIS funds posted solid returns in the first half of 2017. Strong growth in Europe and robust export and consumption figures in Asia helped fuel positive investor sentiment."

A version of this article appeared in the print edition of The Straits Times on September 01, 2017, with the headline 'CPF Investment Scheme funds up 3.4% in 2nd quarter'. Print Edition | Subscribe