Over a one-year period, all Central Provident Fund Investment Scheme (CPFIS) funds delivered returns of 14.71% for investors as at Sept 30, an improvement compared to the same period up to last quarter which was 9.69%, a report by Investment Management Association of Singapore (IMAS) and Morningstar notes.
IMAS and Morningstar released its quarterly findings on Singapore fund flows and performance of all unit trusts and investment-linked insurance products (IPLs) included under the CPFIS in its Performance and Risk Monitoring Report and Singapore Fund Flow report.
IMAS and Morningstar found that while overall performance for CPFIS-induced funds fell 2.54% in 3Q2024, the performance of unit trusts increased to 3.14%.
Proxied by Morgan Stanley Capital International (MSCI) World Index, global equities saw a slight increase of 0.62%.
MSCI AlC Asia ex-Japan also posted gains of 4.43%, while bond returns – the Financial Times Stock Exchange (FTSE) World Government Bond Index (WGBI) reversed its decline to deliver a positive return of 1.17%.
Asset classes
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The positive momentum from the previous quarter carried over to 3Q2024, with all asset classes posting gains.
The most significant improvement was in fixed income, which had gains of 3.55%, substantially higher than returns of 0.03% in the previous quarter.
All other asset classes remained stable, with the exception of equity funds falling to 2.46% from last quarter’s return of 4.10%.
Over a one-year horizon, the profile of investor returns remained broadly unchanged.
Equity funds experienced returns of 16.97% from 11.91% in the previous quarter, while allocation and fixed-income funds also showed a similar positive trajectory, with positive returns of 13.61% and 7.92% respectively.
Over the same period, money market funds were stable, with an average positive return of 3.69%.
Over a three-year reporting interval, the performance of all asset classes did not change much from last quarter’s report, with all asset classes showing improved gains.
From a net gains perspective, the best-performing asset class was fixed income, which posted a negative return of 2.60%, a reversal from -6.00%.
The report found that investors preferred stability and this was reflected in money market funds which delivered a return of 8.02%, outperforming all other asset classes.
Equities reversed its losses and posted returns of 1.23%, with allocation funds close to hitting a 0% loss rate.
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Fund flows
Singapore posted a record-high of $3.1 billion net inflows of authorised and recognised unit trusts registered for sale in 3Q2024.
By asset class, fixed income and money market funds attracted the most interest, with positive net flows of $1.9 billion and $1.5 billion respectively.
Global fixed income was the most popular category, with $901.95 million in gains, followed by Asia fixed income with inflows of $781.1 million.
In terms of worst-performing categories, Europe fixed income was the only one to post outflows of $6.98 million.
Interest in equities declined, with $436.52 million redeemed in the third quarter, as compared to $261.16 million last quarter.
In Singapore, US large-cap blend equity was the best-performing category with inflows of $75.37 million, followed closely by India equity with $74.51 million.
Singapore equity which previously ranked top in terms of inflows in 2Q2024 featured at the bottom of the best-performing categories with $3.57 million gained.
China equities suffered, with China equity and China equity – A Shares posting outflows of $28.75 million and $80.67 million, respectively.
The worst-performing equity was Asia Pacific ex-Japan equity, with outflows of $138.19 million.
Some gains were witnessed for convertibles, which attracted $0.08 million, while alternatives and commodities saw outflows of $11.16 million and $7.27 million respectively.
