To encourage more Singaporeans to start investing early for retirement, the Singapore Exchange (SGX) and POSB have come up with a new product that allows one to invest in exchange traded funds while also saving for retirement.
SINGAPORE: To encourage more Singaporeans to start
investing early for retirement, the Singapore Exchange (SGX) and POSB
have come up with a new product that allows one to invest in exchange
traded funds while also saving for retirement.
SGX added that it is on the lookout for potential partnerships that can make long term investing more accessible for their customer base.
Ninety-seven per cent of Singaporeans’ retirement funds are tied up in fixed deposits, property and insurance, and the remaining three per cent are in equities, mutual funds or unit trusts, revealed a SGX-Oliver Wyman study on retirement savings.
A low interest rate environment and rising inflation has eroded the dollar value of one's savings, especially retirement savings. Far more retirement savings in Singapore are still held in fixed bank deposits than in many other countries, said the SGX-Oliver Wyman study.
Only 12 per cent of investible CPF savings are held in equities versus the 50-70 per cent in a range of other countries including US, UK, Hong Kong, Malaysia and Australia.
Research shows that 41 per cent of Singaporeans have never saved specifically for retirement while 60 per cent of Singapore's working adults save less than 20 per cent of their monthly income.
With families becoming smaller, experts say it is increasingly less viable for Singaporeans to depend on their children for financial support in their retirement years.
By the time Singaporeans reach retirement age, CPF savings will only be sufficient to meet 68 per cent of their pre-retirement income, revealed the SGX-Oliver Wyman study.
But with the new POSB Invest-Saver product, a combination of a regular savings plan and exchange traded fund, saving for retirement could start from as little as S$100 a month with no brokers involved.
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks.
Potential investors can subscribe for the product via any of 1,100 ATMS islandwide.
The POSB Invest-Saver is linked to the Nikko AM Singapore STI ETF, an exchange-traded fund that tracks the performance of Singapore’s top 30 blue chip companies.
DBS, the largest local bank in Singapore, hopes that the product will make long term investing more manageable for young Singaporeans.
Tan Su Shan, managing director and group head of Consumer Banking and Wealth Management at DBS Bank, said: "Singaporeans are a little bit barbelled in their investment approach. We either have cash or we have properties, so either very liquid or very illiquid and possibly not enough in fixed income or equities. So this speaks to the asset diversification that we're trying to promulgate right now."
Chew Sutat, executive vice president of SGX, said: "If you look at the amount of cash savings we have, both in CPF systems and banking deposits, every year we as a nation are potentially leaving S$3-5 billion of investment returns on the table by not investing.
(Uncle8888: So much cash rotting in the bank!!!)
"As long as we have like-minded partners who share common goals of wanting to bring more accessible investing to their customer base… we'll be happy to support them."
Potentials investors in this latest product could expect to reap an annual average return of between 2 and 3 per cent.
SGX added that it is on the lookout for potential partnerships that can make long term investing more accessible for their customer base.
Ninety-seven per cent of Singaporeans’ retirement funds are tied up in fixed deposits, property and insurance, and the remaining three per cent are in equities, mutual funds or unit trusts, revealed a SGX-Oliver Wyman study on retirement savings.
A low interest rate environment and rising inflation has eroded the dollar value of one's savings, especially retirement savings. Far more retirement savings in Singapore are still held in fixed bank deposits than in many other countries, said the SGX-Oliver Wyman study.
Only 12 per cent of investible CPF savings are held in equities versus the 50-70 per cent in a range of other countries including US, UK, Hong Kong, Malaysia and Australia.
Research shows that 41 per cent of Singaporeans have never saved specifically for retirement while 60 per cent of Singapore's working adults save less than 20 per cent of their monthly income.
With families becoming smaller, experts say it is increasingly less viable for Singaporeans to depend on their children for financial support in their retirement years.
By the time Singaporeans reach retirement age, CPF savings will only be sufficient to meet 68 per cent of their pre-retirement income, revealed the SGX-Oliver Wyman study.
But with the new POSB Invest-Saver product, a combination of a regular savings plan and exchange traded fund, saving for retirement could start from as little as S$100 a month with no brokers involved.
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks.
Potential investors can subscribe for the product via any of 1,100 ATMS islandwide.
The POSB Invest-Saver is linked to the Nikko AM Singapore STI ETF, an exchange-traded fund that tracks the performance of Singapore’s top 30 blue chip companies.
DBS, the largest local bank in Singapore, hopes that the product will make long term investing more manageable for young Singaporeans.
Tan Su Shan, managing director and group head of Consumer Banking and Wealth Management at DBS Bank, said: "Singaporeans are a little bit barbelled in their investment approach. We either have cash or we have properties, so either very liquid or very illiquid and possibly not enough in fixed income or equities. So this speaks to the asset diversification that we're trying to promulgate right now."
Chew Sutat, executive vice president of SGX, said: "If you look at the amount of cash savings we have, both in CPF systems and banking deposits, every year we as a nation are potentially leaving S$3-5 billion of investment returns on the table by not investing.
(Uncle8888: So much cash rotting in the bank!!!)
"As long as we have like-minded partners who share common goals of wanting to bring more accessible investing to their customer base… we'll be happy to support them."
Potentials investors in this latest product could expect to reap an annual average return of between 2 and 3 per cent.
- CNA/jc
Posts
CW,
ReplyDeleteIt's a pity they didn't release such products during 2009 or 2010 ;)
I remember during 2009, banks were quick to offer capital protected investment products. "Investors who bought them missed the upside...
Now when interest rates are going up, guess what? Yup, offer what retail wants - not what they need.
How can banks pay big salaries to their Masters in Financial Engineering employees?
DeleteInnovative products for needy investors.
LOL!
memory is very short indeed.
ReplyDeletei wonder who is going to lose money while everyone of us makes money from investing for our retirement.
they will always come out with easy to understand, easy to invest, no need to study much, everything very easy for the public, so that at the end when everybody lose money, they will say, study before to invest in anything.
Deletethey are making use of people ignorance.
never trust the banks and insurance company for any investable products, period.
DeleteHa! Ha!
ReplyDeleteCoconut,
your never trust the banks and insurance for any investable products, period is indeed very true. They can exist until now because their number one motivation is to make money. We can't blame them can we? Whether the public makes money or not is secondary or even last to their motivation.
It's interesting.
ReplyDeleteThis "new" product from the perspective of young are "good" for retail - especially those no time to invest, no time to think, no time to research, etc. From companies perspective, these customers great or what?
But from the perspective of us "old birds"... LOL!
I hope it's because of our desire to peer behind the curtains; and not because we are old and cynical :(
Products and features that benefit retail - like generous cash back rewards from credit cards to insurance policies with good yields are withdrawn.
When markets are near 52 weeks high, how come banks not promoting capital protected funds to retail?
To trade and invest in Singapore positional market, try SGX Hot Stock Picks and gain profit.
ReplyDelete