CPFIS funds yield 0.75% returns in Q3

FUNDS under the Central Provident Fund Investment Scheme (CPFIS) delivered 0.75 per cent on average in the third quarter of 2018 ended Sept 30.

Average returns from unit trusts increased 1.28 per cent, and returns on investment-linked insurance products (ILPs) rose 0.44 per cent, according to fund research firm Lipper on Monday.

Among CPFIS funds, equity funds performed best with average returns of 0.95 per cent, while mixed asset funds rose 0.65 per cent. Money market funds climbed 0.29 per cent and bonds inched up 0.08 per cent.

In the same period, the MSCI All-Country Asia ex-Japan Index, a widely cited measure of Asian equities, slipped 1.24 per cent. The FTSE World Government Bond Index fell 1.41 per cent.

For the one-year period ended Sept 2018, the overall performance of CPFIS-included funds posted an average positive return of 3.18 per cent. Unit trusts climbed 3.85 per cent on the year, and ILPs were up 2.8 per cent.

During the same period, the benchmark MSCI All-Country Asia ex-Japan Index rose 2.37 per cent and the FTSE World Government Bond Index fell 0.93 per cent. Equity funds climbed 4.45 per cent on average, while mixed assets rose 2.37 per cent and money market funds posted 0.9 per cent returns. Bonds fell 0.84 per cent.

"In the third quarter of 2018, CPFIS funds successfully achieved positive returns despite continued market fluctuation and volatility risk," said Xav Feng, head of Asia-Pacific research at Lipper.

"The recent selloff in tech stocks is impacting the rest of markets while sliding oil prices are triggering concerns around a continued global economic recovery. Investors ought to remain alert amidst unstable market factors including further potential interest rate hikes from the US Federal Reserve and President Trump's on-going trade war with China."

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 Refinitiv, the former financial and risk business of Thomson Reuters following the Oct 1 closing of a partnership deal between Thomson Reuters and private equity funds managed by Blackstone.