CPFIS funds deliver 0.18% returns for Q3 despite global worries

Singapore

AMID global market uncertainties, funds under the Central Provident Fund Investment Scheme (CPFIS) registered slightly positive returns of 0.18 per cent on average for the third quarter ended Sept 30.

Average returns from unit trusts fell 0.29 per cent, while returns on investment-linked insurance products (ILPs) rose 0.47 per cent, according to fund research firm Lipper on Thursday.

Bonds were the star performer among all CPFIS funds with average returns of 2.37 per cent, trailed by mixed assets at 0.98 per cent and money market funds at 0.4 per cent.

Equity funds bucked the trend to post negative returns of 0.66 per cent.

Over the same period, the MSCI All-Country Asia ex Japan Index - a widely cited measure of Asian equities - fell 2.27 per cent.

Meanwhile, the MSCI World TR USD Index representing global equities rallied 2.89 per cent, and the FTSE World Government Bond Index edged up 3.08 per cent.

Lipper head of Asia-Pacific research Xav Feng said: "In the third quarter of 2019, CPFIS funds managed to achieve positive returns amid uncertain global markets. It is worth paying attention to the US Federal Reserve's final decision on whether to signal an interruption to its monetary easing."

Mr Feng also noted that "hopes are rising" that the first phase of a US-China trade deal will be signed, putting the "core concerns" of both parties at rest.

"Market participants should remain alert to these ongoing issues", he said.

For the one-year period ended Sept 30, the overall performance of CPFIS funds saw an average positive return of 1.74 per cent.

Average returns from unit trusts rose 0.33 per cent on the year, while ILPs were also up 2.62 per cent.

On average, bonds posted a 7.14 per cent gain to outperform mixed assets (up 3.24 per cent) and money market funds (up 1.46 per cent). Conversely, equity funds recorded a 0.13 per cent decline in average returns.

Meanwhile, the MSCI All-Country Asia ex Japan Index fell 1.98 per cent for the period, while the MSCI World TR USD and FTSE World Government Bond Index climbed 3.66 per cent and 9.44 per cent respectively.

As for the three-year period ended Sept 30, CPFIS funds registered a 18.35 per cent growth on average, accounting for a 19.03 per cent gain from unit trusts and 17.93 per cent from ILPs.

Equity funds were the leading gainer with a 22.33 per cent growth, while bond portfolio posted positive returns of 6.39 per cent.

For the same three-year period, the MSCI World TR USD Index and MSCI All-Country Asia ex Japan Index rallied 38.05 per cent and 22.95 per cent respectively. The FTSE World Government Bond Index also inched up 5.09 per cent.