Updated: Mar 17
A few days ago, I got a message from my client.
The client was curious as to his own investment returns, so he checked, sent me back a report and a thank you. I quickly went to examine the fund and was pleasantly surprised at his 40%+ return.
I have significantly lower expectations of CPF Investments compared to cash ones, because the CPF fund range is usually extremely limited.
This is not the top performing CPF fund I know or that investors have access to. Back in 2017, I was extremely reluctant to offer CPF Investment Funds to my investors.
After years in the industry, I know better.
At the time - and even today, the narrative to NOT do so was extremely persuasive online.
In particular, there would be somewhat misleading reports of poor returns for specific years - which, when context was considered - was actually far better than the narrative being pushed.
Context can really define if you're a genius or idiot investor, but to be fair to some of the context at the time - there were other obstacles preventing good returns.
Today, there are far less so.
An Introduction To 4 Performing Funds
These funds have all had historical performance of 7% or higher, and they aren't even in the Top 6 list which I reserve exclusively for my clients.
As a result, I felt it would be good to give a preview on what kind of potential returns are available to consumers - at low fees - today!
All of these funds are available to invest using CPF-OA through a consultant.
Even with a risk premium factor, most people would be able to put aside a fraction of this money to invest rather than to pay off their loan early, as seen in a recent article that Loo Cheng Chuan (1M65) contributed to DnS.
Please do not that past performance does not reflect future performance, and none of these highlighted funds are to be taken as investment recommendations.
All returns are net of management fees. Data is from September/October 2020 Factsheets.
Without further ado, Number 10 to 7...
10) Aberdeen Standard Thailand Fund
Since Inception: 10.3%
To be quite blunt, Thailand has seen better days. At a certain point in Covid, it was at a 7 year low. Recent returns have been stagnant.
As an investment specialist, the prospect of that excites me because it's annualized return is still ridiculously high despite being quite far from its peak.
And unlike Singapore's STI ETF, Thailand's SET (and this fund) have a history of recovery after the 2008 Financial Crisis.
Protests, Covid and economic relations between US and China have slowed its recovery somewhat, which was unfortunate if you're a prior investor - but certainly not if you're looking to purchase undervalued stocks with a strong currency.
9) LionGlobal Japan Growth Fund
a) 5 years: 8.8%
b)10-year return: 8.2%
I was very reluctant to reveal this gem, but I really needed to vary this up to demonstrate my range of investment ability and knowledge.
It might have been pretty boring consistently talking about the other limited geographical funds on the Top 5 list, which have significantly higher returns anyway.
Some of you know that Japan has had poor economic growth since as far back as 1991. Thankfully, in the last decade or so we've started to see Japan recover heavily.
This fund was formerly benchmarked to Nikkei 225 - and it's usually a poor indication when a fund changes benchmarks.
But the new benchmark - the Topix Total Return Index - has actually had a higher return than Nikkei - and the fund has outperformed it admirably and consistently in the last 10 years.
Japan has a pretty efficient economy - though not as efficient as the US - but efficient enough that SPIVA would suggest that many Japan Funds don't outperform the benchmarks.
This is a much clearer winner, though.
8) Schroder China Opportunities Fund
a) 5 years: 13.9%
b) Since Inception: 8.2%
On the inverse side of India, China has killed it a lot more in recent years and is no slouch historically.
Both general returns (how much I'd expect from an investment) as well as against benchmarks boast impressive statistics.
If you aren't familiar with these statistics or ratios yet, you can read my article on How to Read a Fund Fact Sheet - but the short version is that the fund boasts significantly higher returns for lower risks AFTER accounting for all the expenses.
Very few China funds outperform these returns - and they're usually more risky and investable only in cash.
7) Aberdeen Standard India Opportunities Fund
a) Since Inception: 8.4%
Standard Deviation: 19%+
Benchmark Beating: Yes, though less recently so
India's had a pretty hard time the last year and a half - and if you don't get to take higher risks with the many gems, you get Aberdeen India Opportunities - which tends to spike up tremendously after every 3 - 5 years of stagnancy.
There are better India Funds, but CPFIS only allows you to invest in so many. This is still the best one I know.
The good news is that its hard to argue that India isn't undervalued or at a 'stagnated' period at the moment. While Covid and Oil hurt its economy, large amounts of money have gone towards food and tech.
If you have a long time horizon, which most CPF investors would - you could leave your monies in there knowing that you're taking a high risk, high return approach - and you'll likely get rewarded for it.
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