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CPFIS funds deliver 7.82% returns for Q1

FUNDS under the Central Provident Fund Investment Scheme (CPFIS) posted positive returns of 7.82 per cent on average for the first quarter ended March 31.

Average returns from CPFIS-included unit trusts rose 8.48 per cent, while returns on investment-linked insurance products (ILPs) climbed 7.34 per cent, said fund research firm Lipper on Monday.

Across all CPFIS-included funds, equity funds performed the best at 9.85 per cent in average returns, followed by mixed-asset funds at 6.46 per cent. Bonds enjoyed an average return of 1.59 per cent, while money market funds saw an average return of 0.36 per cent.

In the same period, the MSCI World TR USD representing global equities rose 11.94 per cent, and MSCI All-Country Asia ex Japan, a widely cited measure of Asian equities, rallied 10.75 per cent. Meanwhile, the FTSE World Government Bond Index rose 1.11 per cent.

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Lipper head of Asia-Pacific research Xav Feng said CPFIS funds achieved encouraging returns given the US and global markets’ rebound in the first quarter of 2019. He added that the US Federal Reserve has kept interest rates on hold despite pressure from US president Donald Trump.

"Meanwhile the trade deal between US and China is expected to include renewed commitments from China to strengthen its protection of intellectual property and provide greater access to Chinese markets. However, it’s still a big uncertainty before two sides come to a conclusion," Mr Feng said.

For the one-year period ended March 2019, the overall performance of CPFIS-included funds saw a slightly positive return of 0.80 per cent on average. Unit trusts increased 0.41 per cent on the year and ILPs rose 0.91 per cent.

During the same period, the MSCI All-Country Asia ex Japan Index fell 1.81 per cent. Bond funds outperformed the mixed-asset class, rising 2.71 per cent on average, while mixed-assets posted a rise of 1.37 per cent. Money market funds increased 1.28 per cent.

As for the three-year period ended March 2019, CPFIS-included funds saw 25.06 per cent growth on average. Unit trusts gained 26.86 per cent and ILPs gained 23.78 per cent.

For the same period, the MSCI All-Country Asia ex Japan Index rallied 42.11 per cent. Equity funds was the lead gainer with 31.97 per cent growth, and bond portfolio posted positive return of 5.13 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.