CPF investments grow 1.9% in second quarter of 2019

green and white leafed plantsSINGAPORE: Funds included in the Central Provident Fund Investment Scheme (CPFIS) posted positive returns of 1.9 per cent in the second quarter of 2019 as global markets continued to rally, data from financial research firm Refinitiv’s Lipper showed on Wednesday (Aug 28).

Unit trusts included in CPFIS increased returns by 1.86 per cent, while investment-linked insurance products (ILPs) rose 1.92 per cent.



There were a total of 237 CPFIS-included funds, including 87 unit trusts and 150 ILPs.

All asset types saw positive returns, with mixed-asset funds seeing the biggest increase at 2.04 per cent. This is followed by equity funds at 1.94 per cent, bond funds at 1.61 per cent and money market funds, which had the lowest return, at 0.34 per cent.

For the same period ended Jun 30, benchmark indexes such as the MSCI World TR USD rallied 4.08 per cent and the FTSE WGBI Index rose 3.45 per cent, while the MSCI AD Asia ex Japan posted a negative return of 0.67 per cent.

CPFIS funds posted a positive return of 7.82 per cent on average in the first quarter of the year.




While the Q2 returns are lower than the 2.5 per cent interest rates CPF members could earn if they keep their savings in their Ordinary Account, long-term returns appear to be more positive.

Over a year, the performance of CPFIS-included funds grew 2.21 per cent on average, with unit trusts rising 1.81 per cent and ILPs up 2.46 per cent.

Over a three-year period, CPF-included funds posted a positive return of 26.23 per cent on average – with unit trusts gaining 28.28 per cent and ILPs posting an uptick of 24.91 per cent.

“The encouraging performance of CPFIS continued in Q2 2019, echoing that most of global equity markets kept rallying. However, uncertainty remains and continues distracting global investors,” said Mr Xav Feng, Head of Asia Pacific Research at Refinitiv’s Lipper.

He noted the move by the US Federal Reserve to lower interest rates for the first time since the 2008 global financial crisis to prevent the possibility of an economic downturn. “Further interest cuts for the US Federal Reserve are expected,” he said, adding that this also triggered several national banks to loosen monetary policy.

“Additionally, market participants continue paying close attention to US-China trade talks. Although the two countries are back to negotiations, a positive and concrete conclusion is yet to be made.”

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