Singapore unit trusts swing to $998M net outflows in Q4

Analysts are cautiously optimistic for both stocks and bonds this year.

Authorised and recognised unit trusts registered in Singapore posted net outflows of $998m in the final three months of 2023, pulling back from the $264m net inflows posted in the third quarter, according to Morningstar's latest Singapore Fund Flow report. 

Broken down, equities booked the largest net outflow among the asset classes at $432m in the fourth quarter, followed by the $204m net outflow in fixed-income assets. Money market funds booked $150m in net outflows while net outflows in allocation and alternative funds stood at $195m and $16m, respectively.

Commodities posted a mild $1.54m of net outflow while convertibles bucked the trend with $20,000 in net inflow. 

READ MORE: Singapore net inflows hit $263.18m in 3Q23

Meanwhile, the overall performance of funds under the Central Provident Fund Investment Scheme (CPFIS), including unit trusts and investment-linked insurance products, rose to 3.77% in the fourth quarter from the 2.28% negative return in the third quarter.

Returns for the 12 months ending 2023 averaged at 7.88% as all asset classes booked positive returns, led by the 9.26% returns in equity funds.

Fixed-income and allocation funds recorded average returns of 4.67% and 6.4%, respectively.

“Despite heightened risks, we maintain a cautious optimism for both stocks and bonds in the coming year (2024). The key risks faced by investors can be summarized as moderate valuations, a softening economy, weakening fundamentals, and external shocks,” Morningstar said in the report.