Fullerton launches first retail fund under MAS’ S$5 billion equity initiative
It is offered as a collective investment scheme to retail, accredited and institutional investors in Singapore and selected international markets
[SINGAPORE] Fullerton Fund Management – one of the three asset managers in the first batch appointed by the Monetary Authority of Singapore (MAS) under the S$5 billion Equity Market Development Programme (EQDP) – has launched its first retail fund under the initiative.
The Fullerton Singapore Value-Up Fund will invest exclusively in Singapore-listed securities, spanning large mid, and small-cap stocks, initial public offerings (IPOs) and secondary listings, the asset manager announced on Monday (Oct 6).
It is offered as a collective investment scheme to retail, accredited and institutional investors in Singapore and selected international markets.
The fund “harmonises very much” with Singapore’s strong economic fundamentals, said Robert St Clair, managing director and head of investment strategy at Fullerton Fund Management, in an interview with The Business Times.
Reflecting on recent market developments, he noted that last year marked a turning point for Singapore equities, with fundamentals improving significantly and gross domestic product growth accelerating. The year ended with strong double-digit gains – momentum that has continued into this year.
St Clair attributes these developments to policymakers reinforcing favourable fundamentals on both the supply and demand sides.
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“Fullerton had held a positive view on Singapore equities (and) we transitioned to bullish last year,” he added.
Commenting on Fullerton’s selection for the EQDP, St Clair said the asset manager feels “very privileged”, highlighting its “deep and long heritage in Singapore” alongside its “expertise in managing risk assets” within the local market.
Under the programme, MAS will invest in strategies managed by Singapore-based asset managers with a strong focus on local equities, while also expanding investor participation beyond large-cap stocks.
MAS in July announced an initial allocation of S$1.1 billion to Fullerton, Avanda Investment Management and JP Morgan Asset Management. A second tranche of appointments is expected by the fourth quarter of this year.
Investing in transformative Singapore companies
St Clair noted the fund’s potential to “spark (interest) and bring in more third-party money”. He pointed out that substantial equity liquidity from both domestic and foreign investors is currently sitting on the sidelines and can now be “put to work”.
The fund’s flexible mandate allows for investments across all market capitalisation tiers, including mid and small-cap stocks, which are often dynamic but under-owned segments of the market.
Additionally, its sector allocations are guided by prevailing market conditions and include financials, real estate and industrials. The portfolio includes dividend-paying stocks, and both accumulation and distribution share classes will be offered to investors.
“The actively managed Fullerton Singapore Value-Up Fund offers retail investors a unique opportunity to co-invest – alongside institutional capital – in companies that are transforming for the future,” said Ng Yao Loong, head of equities at SGX Group.
Managed as a high-conviction portfolio of 20 to 40 stocks currently, the fund seeks to outperform the FTSE Straits Times All-Share Total Return Index through active management.
The fund benchmarks itself against this broader index, which includes about 90 constituents with a smaller average market capitalisation of about S$5 billion in comparison to the more popular Straits Times Index. This reflects a strategic shift from focusing primarily on large-cap stocks to incorporating smaller-cap companies across the capital structure, said St Clair.
“One of the key attractions is that opening up exposure to capital structure can give you exposure to different fundamental themes,” he added.
He explained that the fund will tap into sectors such as consumer and real estate, which are poised to benefit from easing interest rates and strong loan growth.
From an earnings perspective, he sees that “the stars are aligning for Singapore’s companies”. He noted that earnings expectations for this year have been overly pessimistic, with stronger growth of around 6 per cent anticipated next year.
Moreover, he sees further upside potential beyond that, which the market is beginning to factor in. This outlook is especially relevant from a retail investor standpoint, he said.
Bullish on Singapore equities
Reflecting on retail investor sentiment, St Clair referenced a Fullerton survey published last year that showed Singapore equities as the top buy choice among local investors. This was before the recent equity market review initiatives were announced, indicating underlying confidence in the local market.
The survey revealed that Singaporean investors favour thematic investing, showing interest in themes such as industrialisation, clean energy and artificial intelligence.
The Fullerton Singapore Value-Up Fund “meets the goals and desires that the survey of Singapore investors suggest are important, and the fundamentals are also very favourable”, said St Clair.
He further highlighted the strong financial position of Singapore households, noting that about 20 per cent of their assets are held in cash and deposits. This cash reserve represents potential liquidity that can gradually be invested, boosting equity markets as well as other asset classes.
Originally from New Zealand, St Clair has been based in Singapore for more than 20 years. The 55-year-old spent five years at MAS before moving to GIC, where he worked for nearly a decade. He joined Fullerton in 2020 after a stint at BP. Earlier in his career, he also held roles at the Reserve Bank of New Zealand.
“It has been a very nice balance to be able to see things from a policymaker perspective as well as from an investor perspective,” he said.
This blend of experience, he said, provides valuable insight into programmes such as the EQDP.
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