INVESTMENT funds approved by the Central Provident Fund (CPF) rallied along with global markets during the second quarter but if you invested at the height of the boom, you are still well under water.
The funds - including unit trusts and investment-linked insurance products - showed an average gain of 20 per cent for the three months to June 30 compared with the first quarter.
But for the one-year period to June 30, the average return of all CPF-approved funds fell 14.84 per cent.
This is because CPF-approved unit trusts fell 16 per cent while investment-linked insurance products retreated 14 per cent on average.
For the three-year period to June 30, the funds averaged an overall decline of 8.46 per cent, according to figures from fund intelligence firm Lipper, the Investment Management Association of Singapore and the Life Insurance Association yesterday.
The findings bear out anecdotal evidence that while markets have rallied and sentiment has improved, many retail investors are still sitting on paper losses.
'If you look over a three-year or five-year period, most portfolios are still down,' said Mr Gabriel Yap, senior dealing director at DMG & Partners Securities.
'Generally, if you have a US-centric portfolio, you're definitely down. It's the same if you have a European-centric portfolio and a global portfolio measured by the MSCI, you're likely to be still down.'
The data also indicated that the 'best performing' classifications for the CPF-approved unit trusts were the Indonesian and Indian stocks categories.
Equity Indonesia and Equity India, as they are termed by Lipper, gained 50 per cent and 53 per cent on average respectively in the second quarter.
The market rebound has been a key reason for the surge in fund value. Indonesia's Jakarta Composite, for instance, has climbed more than 50 per cent this year, with the country avoiding the recession that has plagued its neighbours.
The performance of CPF-approved funds generally mirrors the findings of Fundsupermart earlier this year.
The unit trust distributor's data showed that the average equity fund gained almost 25 per cent in the first six months of this year, rewarding investors who defied the global financial storm to put money into stocks and bonds.
Lipper's senior research analyst for the Asean region, Mr Rajeev Baddepudi, said market expectations are for a recovery late this year or early next year.
'While key issues concerning economic health persist - high unemployment rates and a preference for savings over consumption - it is encouraging that corporate earnings and GDP growth estimates for 2009 and 2010 are already being revised upwards,' he said.
He noted that a return of investor appetite for risk and declining volatility were the main themes in the second quarter, with recessionary fears giving way to signs of improving conditions.
