A long-established fund enters the EQDP landscape, broadening access to Singapore SMIDs

Key Points

Optimistic about the Singapore market

Singapore’s equity market is entering a period of revitalisation as the MAS advances a coordinated set of initiatives aimed at enhancing market depth, liquidity and competitiveness. Early signs of progress are already evident, with rising ETF fund flows—particularly into small and mid-cap (SMID) segments, and the outperformance of SMID stocks relative to large caps in the second half of 2025.

Figure 1: Small and mid-cap stocks outperformed the STI in 2H25

We remain optimistic on the Singapore equity market in 2026, underpinned by strong corporate fundamentals, resilient earnings growth, and improving visibility and liquidity conditions. As Singapore’s investment narrative broadens beyond a narrow group of large-cap names, SMID companies are increasingly offering meaningful return potential, making access to the wider Singapore equity universe more relevant and compelling for investors.

Related Article: Singapore 2026 market outlook: Policy tailwinds set the stage for equity gains

Fund strategy and experience in capturing opportunities in SMIDs

LGI Singapore Trust Fund is positioned to capture the structural tailwinds in the Singapore market through its designated fund strategy. The fund aims to deliver long-term capital appreciation by investing primarily in companies that are incorporated in, operate mainly from, or derive a significant portion of their revenues from Singapore. Its benchmark against the MSCI Singapore Index allows flexibility to invest in companies that are not listed on SGX but have substantial local business exposure, such as Sea Limited and Grab Holdings.

Investment decisions are guided by a bottom-up stock selection process. Each potential holding is assessed across four key dimensions: business fundamentals, management quality, valuation discipline, and identifiable catalysts. Beyond these, the portfolio managers also focus on investment opportunities linked to three core themes that shape Singapore’s market. These include Singapore’s role as a global safe haven (with companies like DBS and OCBC), a global business hub (such as CSE Global), and a leading global city. By investing along these themes, stock selection is guided by long-term structural growth drivers rather than short-term market fluctuations.

After being appointed as the EQDP fund manager, Lion Global Investors’ Chief Executive Officer has announced that the fund will target a balanced allocation of approximately 60–70% in large-cap stocks and 30–40% in mid-caps. This approach reflects the fund’s intent to balance established market leaders with higher-growth opportunities in the SMID segment. Prior to 2025, the fund’s SMID exposure was capped at around 25%. Since 2025, and especially after the launch of EQDP, the allocation to SMIDs has been progressively increased, with the fund currently operating near the upper end of its targeted SMID allocation.

The fund maintains a clear underweight position in Singapore’s large banking stocks. DBS and OCBC together account for 26.72% of the fund’s net asset value, compared with more than 40% in the MSCI Singapore Index. This underweight creates room for meaningful allocations to SMID stocks. As a result, the portfolio includes a number of non-benchmark holdings such as Marco Polo Marine, CSE Global, Addvalue Technologies, and Riverstone, several of which feature prominently among the fund’s top holdings. This positioning highlights the manager’s willingness and ability to seek return potentials beyond index constituents.

Table 1: The fund’s top 10 holdings, NAV allocation compares with the benchmark

These SMID exposures also enhance sector diversification relative to the MSCI Singapore Index, which consists of only around 16–17 constituents and is heavily influenced by a few large-cap banks. In contrast, LGI Singapore Trust Fund holds approximately 60 stocks and has an active share of about 44%, indicating a substantial deviation from the benchmark. This broader opportunity set spans large, mid, and small-cap companies, including niche industrials, technology-related businesses, offshore and marine exporters, and domestically oriented firms.

Figure 2: LGI Singapore Trust Fund has wider sector exposure than its benchmark

The fund’s relatively high active share and meaningful allocation to SMIDs contribute to a higher portfolio turnover compared with more index-oriented strategies. Portfolio adjustments are driven by valuation discipline and fundamental reassessments. When attractive SMID opportunities are identified, the managers may trim large-cap positions to fund these investments. Conversely, when SMID valuations become less compelling, capital may be reallocated back into large-cap stocks, which serve as more stable return anchors. Overall, the fund’s performance is shaped by active stock selection and dynamic portfolio management, rather than reliance on a narrow group of index heavyweights.

Strong benchmark beating track record

The LGI Singapore Trust Fund delivered a total return of more than 38% in 2025, positioning it as the top-performing Singapore equity funds on our platform. While the fund outperformed our Singapore recommended fund, the Amova Singapore Dividend Equity Fund, in terms of total return, the two funds serve different investor objectives and risk profiles.

The fund has consistently outperformed both its benchmark, the MSCI Singapore Index, and a peer fund tracking the same benchmark, the Manulife Singapore Equity Fund, across multiple time horizons. In 2025, the fund achieved a total return of 38.7% in SGD terms, materially exceeding the MSCI Singapore Index’s 24.9% gain and the Manulife Singapore Equity Fund’s 29.0% return. This relative strength extends across the three-year, five-year, and ten-year annualised periods, indicating that performance has been sustained over time rather than driven by a single strong year.

Figure 3: LGI Singapore Trust Fund outperformance across multiple time horizons

Importantly, the fund’s allocation to SMID stocks has been a long-standing feature of its investment approach for over a decade. The persistence of outperformance over this period highlights the manager’s experience and capability in navigating the SMID universe. The particularly strong results in 2025 were supported by both effective stock selection and a favourable market backdrop, as previously overlooked SMID names rallied strongly in the second half of the year. This underscores the potential for the fund’s active strategy and SMID exposure to add value across market cycles, especially when market breadth in Singapore equities improves.

EQDP progress and comparison of available strategies

Under MAS’s EQDP, several asset managers have begun rolling out or outlining Singapore-focused equity strategies. Fullerton Fund Management was among the first movers, having launched the Fullerton Singapore Value-Up Fund in October 2025. Avanda’s EQDP fund is currently restricted to accredited investors. Manulife Investment Management has announced a strategy with a strong small and mid-cap tilt, allocating around 40% to Singapore SMIDs while retaining significant large-cap exposure for liquidity. Amova Asset Management is set to launch two Singapore equity funds in 1Q 2026, while AR Capital is targeting an early-2026 launch. Most recently, JP Morgan Asset Management launched the JPMorgan Singapore & Asia Equity Income Fund in January 2026, which allocates 50% to Singapore equities and 50% to Asia ex-Japan, although detailed fund disclosures are not yet available. BlackRock and Eastspring have also been appointed as EQDP fund managers but have yet to release detailed fund plans.

Despite the number of strategies announced, only two EQDP-related funds currently offer some track record and portfolio disclosure for meaningful assessment: the Fullerton Singapore Value-Up Fund and the LGI Singapore Trust Fund. As such, our comparison focuses on these two strategies.

Table 2: Comparison of the two funds across different metrics

From an accessibility standpoint, the LGI Singapore Trust Fund is more retail friendly. It is available via cash, SRS and CPFIS-OA, with a low minimum initial investment of SGD 100. In contrast, the Fullerton Singapore Value-Up Fund is available through cash and SRS only, with a higher minimum initial investment of SGD 1,000. On costs, LionGlobal is also more competitive, with a capped management fee of 1.25% per annum, compared with Fullerton’s management fee of 1.5% per annum and a higher maximum cap of 2%. This makes LionGlobal relatively more cost-efficient for long-term retail investors.

The two funds are benchmarked differently, which has implications for portfolio construction and performance outcomes. LGI Singapore Trust Fund is measured against the MSCI Singapore Index, while Fullerton references the FTSE ST All-Shares Index, which has broader market coverage. As a result, differences in benchmark composition and risk profiles may lead to divergent performance patterns over time.

In terms of SMID exposure, Fullerton has articulated a higher upper allocation target of up to 50%. However, based on the latest disclosed top holdings, the LGI Singapore Trust Fund currently exhibits a greater presence of SMID names among its leading positions, including companies such as Marco Polo Marine and CSE Global. This indicates that, in practice, LionGlobal’s portfolio is already expressing a more meaningful SMID tilt, despite having a lower stated allocation range.

Table 3: Higher SMID representation among top holdings in LGI Singapore Trust Fund

A compelling opportunity to tap into the broader Singapore market

The Fullerton Singapore Value-Up Fund was the first retail fund launched under the EQDP, its high-conviction approach to small and mid-cap stocks provided investors with access to SMID opportunities when few comparable strategies existed. As a relatively new offering, it remains distinguished by its explicit SMID focus and value-driven investment style.

More recently, the appointment of Lion Global Investors under EQDP, and its decision to implement the programme through the existing LGI Singapore Trust Fund, has meaningfully changed the opportunity set for investors. With the enhancement of its strategy to include a higher allocation to SMIDs, the fund now offers SMID exposure within a well-established, diversified portfolio that also benefits from a longer track record, broader sector representation, and more competitive access terms for retail investors. In this context, the LionGlobal Singapore Trust Fund is now one of our preferred options for investors seeking exposure to Singapore equities with an active SMID tilt, while retaining diversification and flexibility across market cycles.

Declaration:

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.