MPs offer ideas to improve CPF

[Drizzt]

Hi CY09,

Actually, I have invested my CPF OA funds under CPF-IS scheme into Lion Global's Infinity US 500 and Infinity European stock index funds. These funds feeds into Vanguard ETFs. I am still holding onto these funds but they are no longer available under CPF-IS scheme. The problem with these funds is that nobody bothers to market them, resulting them having low fund size which defeats the purpose for an index fund (which is low cost) since expense ratio will be high and returns will be lower. I don't think CPF Board will allow one to invest directly into Vanguard ETFs as they are not listed on SGX.

For ETFs, currently those available under CPF-IS scheme include STI ETF, S'pore bond ETF and a gold ETF. For unit trusts, I do agree that their performance are mixed but with careful selection, one will still be able to beat the CPF-OA rate of 2.5%pa. Some of the better funds include those managed by Aberdeen, Schroder S'pore Trust etc.

For CPF-SA, besides bond funds, one can invest in balanced funds. Some balanced funds do have long track record and can beat 4%pa rate. But it is a tough ask as one have to take a higher risk of underperformance in some years. Some of the balanced funds with good track record and can possibly beat CPF-SA rate include First State Bridge, FTIF Templeton Global Balanced etc.

the expense ratio is .95%. there are sales charges. cost is a big factor and this can be improve alot.