Singapore unit trusts reported S$998M net outflows in Q4

SINGAPORE: In the fourth quarter, Singapore unit trusts reported S$998 million net outflows, a significant shift from the S$264 million net inflows recorded in the previous quarter, according to Morningstar’s latest Singapore Fund Flow report.

As reported by Singapore Business Review, equities bore the most outflow, with S$432 million being pulled out in the fourth quarter.

Fixed-income assets followed suit, with a net outflow of S$204 million. Meanwhile, money market funds saw a net outflow of S$150 million, and allocation and alternative funds experienced outflows of S$195 million and S$16 million, respectively.

In contrast, commodities saw a relatively mild net outflow of S$1.54 million, while convertibles managed to defy the trend with a small net inflow of S$20,000.

Despite this overall trend of outflows, funds under the Central Provident Fund Investment Scheme (CPFIS), which includes unit trusts and investment-linked insurance products, showed performance improvement.

The fourth quarter saw a rise to a 3.77% return, bouncing back from a negative return of 2.28% in the previous quarter.

Over the course of the full year ending in 2023, the average returns were more positive, with an average of 7.88%. Equity funds led the pack with returns of 9.26%, while fixed-income and allocation funds had average returns of 4.67% and 6.4%, respectively.

Morningstar, while acknowledging the risks ahead, maintains a cautious optimism for both stocks and bonds in 2024.

According to Morningstar, “The key risks faced by investors can be summarised as moderate valuations, a softening economy, weakening fundamentals, and external shocks.” /TISG

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