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CPFIS funds deliver 1.9% returns for Q2

FUNDS under the Central Provident Fund Investment Scheme (CPFIS) delivered 1.9 per cent on average in the second quarter of 2019 ended June 30.

Average returns from unit trusts increased 1.86 per cent, while returns on investment-linked insurance products (ILPs) rose 1.92 per cent, according to fund research firm Lipper on Wednesday.

Among CPFIS funds, mixed asset funds performed best with average returns of 2.04 per cent, followed by equity funds which rose 1.94 per cent. Bonds climbed 1.61 per cent and money market funds edged up 0.34 per cent.

During the same period, the MSCI All-Country Asia ex Japan Index, a widely cited measure of Asian equities, fell 0.67 per cent. Meanwhile, the MSCI World TR USD representing global equities rallied 4.08 per cent and the FTSE World Government Bond Index rose 3.45 per cent.

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"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 Lipper head of Asia-Pacific research Xav Feng.

Mr Feng noted that the US Federal Reserve has lowered interest rates for the first time since the 2008 financial crisis in an attempt to stave off an economic downturn, triggering several national central banks to follow suit. Market participants also continue to watch US-China trade talks closely, as negotiations have yet to reach a "positive and concrete conclusion".

For the one-year period ended June 2019, the overall performance of CPFIS-included funds posted an average positive return of 2.21 per cent. Unit trusts rose 1.81 per cent on the year, and ILPs were up 2.46 per cent.

During the same period, the MSCI All-Country Asia ex Japan Index declined 0.95 per cent, while the FTSE World Government Bond Index soared 4.67 per cent. Bonds outperformed other asset classes with 4.77 per cent returns. Mixed assets rose 2.89 per cent, money market funds climbed 1.37 per cent and equity funds gained 1.36 per cent.

As for the three-year period ended June 2019, CPFIS-included funds saw 26.23 per cent growth on average. Unit trusts gained 28.28 per cent and ILPs rose 24.91 per cent.

For the same period, the MSCI All-Country Asia ex Japan Index rallied 40.51 per cent. Equity funds led with 33.67 per cent growth, and bond portfolio posted positive return of 5.32 per cent on average.

Lipper was appointed by the Investment Management Association of Singapore and Life Insurance Association of Singapore to monitor the performance of all unit trusts and ILPs under the CPFIS. The fund research firm is part of financial markets data provider Refinitiv.