Sharp drop in net inflows into CPFIS in Q2

By Ryan Huang


SINGAPORE : Net inflows to investment products under the Central Provident Fund Investment Scheme (CPFIS) saw a sharp slowdown in the second quarter.

For the three months to June, net inflows totalled S$157 million, down by over 80 per cent from the previous quarter's S$947 million. For Q4 2010, net inflows were S$1.1 billion

The data is based on a study by research firm Lipper, which added that outflows increased in line with market uncertainty.

Bonds emerged as the best performing asset class among unit trusts under CPFIS, as the market moved towards safer assets.

Lipper said bonds gained 0.9 per cent on average.

In contrast, equity portfolios saw losses of 8.63 per cent.

That dragged down overall performance for Q2 which saw an average loss of 6.55 per cent.

This was on the back of average losses of 7.27 per cent and 5.89 per cent among CPFIS-included unit trusts and investment-linked policies respectively.

In terms of the flow of funds, bonds saw a net inflow of 5 per cent or about S$150 million, while equities saw the highest outflow of about 10 per cent, or S$90 million.

Bonds are expected to be a key performer for the rest of the year.

But there's some upside for certain sector-related funds.

Rajeev Baddepudi, senior research analyst (ASEAN) at Lipper said: "While equity outflows have been generally negative, there are definitely pockets of quality investments that investors are chasing.

"Some of the sectors that have done well in the late part of the first half include pharmaceuticals, healthcare and technology and telecommunications." - CNA /ls