SINGAPORE lost the pole position in Nasdaq-listed Morningstar Inc's Global Fund Investor Experience 2013 report, getting an overall grade of B this time.
The United States, which previously shared the top spot with Singapore, got the highest score of A for the third time in terms of investor-friendly practices. Hong Kong, which was graded C in 2011, obtained a C-.
The biennial report - which ranks countries on the A to F scale - assesses the experiences of mutual fund investors in 24 countries across North America, Europe, Asia and Africa. South Africa scored the worst, a D.
"While the United States is not a leader in the area of Regulation and Taxes, it has the world's best disclosure and lowest expenses. South Africa, in contrast, received the lowest grade largely because of poor disclosure practices," said the investment research house.
Countries are evaluated based on four categories: Regulation and Taxation, Disclosure, Fees and Expenses, and Sales and Media. The report looked at investor protection, transparency, fees, taxation and investment distribution.
It found that "Singapore is more expensive than many markets in this study. Disclosure also has room for improvement, specifically around simplified offering documents".
Singapore received the top score of A for Regulation & Taxation; B for Disclosure; C for Fees and Expenses; and B- for Sales and Media. In the previous survey, Singapore scored A for the latter.
"The complete absence of taxes on mutual fund investments is a feature unique to Singapore,'' Morningstar said.
Overall, Thailand, Hong Kong and Singapore have the best tax systems for fund investors, and Norway, Sweden, Denmark and the United States have the least attractive after tax returns.