Thursday, August 14, 2008

More funds delisted from CPFIS

Following CPF Board’s announced changes on the expense ratio criterion of funds for inclusion under the CPF Investment Scheme, funds that have exceeded the median expense ratio cap in their respective risk category will be de-listed from CPFIS i.e. cease to accept new CPF monies.

The Expenses Ratio Criteria are as such:
Higher risk - 1.95%
Medium to High Risk - 1.75%
Low to Medium Risk - 1.15%
Lower Risk - 0.65%

The recent announced affected funds:
1) LionGlobal Southeast Asia Fund
2) Fidelity Asian Special Situations Fund (USD)
3) Fidelity European Aggressive Fund (EUR)
4) Fidelity South East Asia Fund (USD)
5) Fidelity Taiwan Fund (USD)
6) Fidelity FPS Global Growth Fund (USD)
7) Fidelity Target 2020 Fund (SGD)
8) Henderson Global Technology Fund
9) Henderson Global Balanced Fund
10) Henderson Pacific Dragon Fund
11) Henderson European Fund
12) Henderson European Property Securities Fund
13) Henderson Japanese Equity Fund
14) Henderson Global Property Equities Fund
15) Henderson Asia-Pacific Property Equities Fund

Will it affect you?
CPF members who have already invested in such funds will not be required to redeem their investments. For those with an existing CPF-OA Regular Savings Plan (RSP) arrangements for the above mentioned funds, the arrangement will be ceased.

Other criteria for funds to be selected in the CPFIS
a. Top 25 percentile in their global peer group
b. Expense ratio lower than median of existing CPFIS funds in its risk category.
c. Preferably have a track record of at least 3 years.

How I feel?
* I have lesser funds to contruct a proper portfolio for my clients now. There are actually several good funds with good track record but not able to meet the low expense ratio and was taken out from the CPFIS.
* I hope MAS and CPF board will take a stronger view on performance instead of on cost. Low cost doesn't means better performance and sometimes better performance actually comes with higher cost.


Anonymous said...

Cannot the CPF board just create an 'Ideal' Fund and request people to invest in that rather than have all these funds ?



Anonymous said...

Fewer funds to sell means fewer people get cheated...The fund sellers are not as smart and they anyhow sell. Cash back is their weapon and they do well . Customers don't care as long they receive money, salesmen
happy they get big commission.. This is good arrangement otherwise nothing happened. No money move. CPF still stuck in account and buyers cannot take out. Reduce funds is a good move

Khiat Han Hwee Adrian said...

If CPF Board come out with one fund and force every CPF member to invest, then no fund managers will want to come Singapore. When no fund managers come Singapore, then there will be fewer Financial activities in Singapore and harder to make Singapore a Financial Hub.

A Financial Hub brings in a lot of jobs for Singaporenas and this is one reason why you often heard that there is a shortage finance professionals in Singapore.

Anonymous said...

How do you judge a good fund? by its performance?. you will be disappointed.