FSMOne

An Equity starter kit

To make CPF investing more worthwhile and profitable for investors, you can consider investing in an equity portfolio that has greater potential for capital growth. However, this is not to say that you should invest all of your CPF monies into this portfolio regardless of your risk profile.

For your fixed income exposure, there’s a choice between investing a portion of your CPF monies in CPF-approved bond funds or keeping them in your respective CPF accounts.

A GUIDE TO GDP-WEIGHTED ALLOCATION

For a long-term investment, we recommend building your portfolio based on a GDP-weighted allocation.

Our dynamic portfolio builder starts out with our default geographical allocation. However, you can still alter the allocations. Then, choose your funds to invest in and you're ready to go!

The recommended geographical allocation is not advised based on your financial needs and objectives, and does not constitute as financial advice. You may wish to approach our FSMOne Investment Advisory Team at advisory@fundsupermart.com before relying on the advice provided to make any relevant investment decision.

Finding the minimum investment amount too high?

Not to worry. Here are 3 global equity funds that covers popular investment styles such as growth and value.
Use our ‘style’ boxes to help find the best fit for yourself!

  • Focuses on identifying market-leading companies with growing industry market share, quality balance sheets and strong management teams
  • Companies they seek out often have a history of success in terms of product launches, innovative ways of doing business or having opportunities to expand globally.
  • One of the strongest performing global equity funds in recent years available for retail investors in Singapore
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  • Disciplined value approach and orientated towards absolute return in the long-term. Takes on a concentrated style to investing which means performance could deviate significantly form the broad index.
  • Uses a private equity approach of understanding and modelling cash flows to valuing public equity markets
  • Value tilt means that investors may have to experience periods of underperformance given the current low interest rate environment
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  • A diversified systematic equity fund of 350 to 700 securities that seeks to harvest long-term returns associated with investment styles such as value, growth, quality, momentum and revisions.
  • While the fund is largely quantitatively driven, investment team use judgment to exclude fundamentally poor companies from investment universe
  • Fund is actively managed from a trading perspective -- high portfolio turnover of 60% to 8-% per year
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These three funds are slightly different in terms of their investment styles. If you are growth and quality oriented you may consider the UOB Global Quality Growth Fund. Natixis Harris Associates Global Equity Fund will appeal to investors who like Benjamin Graham’s or Warren Buffet’s style of value investing. Otherwise for investors without a particular preference, the Allianz Best Styles Equity is one style-agnostic fund that you may consider.

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HOW YOU CAN SELECT FUNDS

Investing is all about understanding the risks involved and potential upsides. Your goal as an investor is to generate the highest returns with the least amount of risk in any investments you make.

Here are 3 factors that you can consider to determine if a fund is right for you.

Performance

The most objective way to determine the quality of the fund manager is to assess the fund’s historical performance, a factor we weigh heavily in our fund selection exercise. For this, we consider both the magnitude of performance as well as the consistency of returns. In the case of new funds which feed into their overseas target funds with a longer track record, we may assess the target fund’s performance. We recommend funds which have at least a 3-year track record.

Expense Ratio

The expense ratio is what investors pay for the management of their fund on an annual basis. This charge is deducted from the value of the unit trust, and it takes into account all the operating expenses that a fund incurs, including its annual management fee, administration costs as well as trustee and custodian fees. Generally speaking, the lower the expense ratio, the better it is for you, because you are incurring less costs.

Risk

Instead of purely using standard deviation as the measure of risk, we believe that it is more appropriate to focus on how well a fund holds up during periods when the relevant markets saw substantial decline. As such, in our assessment of risk, we focus on the maximum decline of a fund over a given period, and also incorporate a measure of downside volatility, which tells us how volatile a fund is over periods when it is losing value

When it comes to evaluating equity funds, the above parameters have a Performance: 60%, Expense Ratio: 20% and Risk: 20% weightage.

Other Qualitative Criteria

In addition to looking at the above-mentioned qualitative parameters, we also consider other qualitative factors in our analysis, including the fund manager’s consistency in their investment approach, the departure of key personnel as well as the stability of the management team. We also incorporate our outlook on the fixed income market to assess the merits and disadvantages of a bond fund. As most of the funds which invest in other regions buy companies that predominantly have their assets and earning streams denominated in foreign currencies, there is currency exchange risk involved. A gain in the SGD against another currency may reduce the returns of the funds exposed to other currencies, while a drop in the SGD against other currencies would increase the returns. Thus, qualitative analysis is a necessary step to distinguish funds with superior management ability from those which were beneficiaries of strong market or currency movements. As we take into account the qualitative factors, the highest-scoring fund based on quantitative assessment in a particular category may not necessarily be the fund we recommend, although fund performance remains a significant factor.

For more information on our risk rating overview, click here.

Step 1

Select if you wish to transact a One-Time Investment or Regular Savings Plan (RSP).