Shawn Ang, portfolio manager for FSGV, says the timing reflects a structurally stronger phase for Singapore equities. Singapore stocks, as measured by the Straits Times Index (STI), have gained more than 20% last year and thus far this year, as earnings have exceeded expectations. “We expect earnings growth closer to 10% in 2026, compared to consensus at around 6%,” he says.
What makes the market more interesting is that, besides the STI stocks, which are heavily dominated by the three banks benefiting from external lift from higher interest rates, other small caps are also starting to gain some following. “Mid-caps are rallying alongside large-caps, something we have not seen in past recoveries … We believe this is the moment to deploy capital across the full market spectrum while valuations remain attractive,” says Ang.
FSGV will manage a focused portfolio of approximately 20 to 40 stocks, with sector weights determined by fundamental analysis. It has the scope to invest across financials, real estate and industrials and will offer both accumulation and distribution share classes. The fund may use derivatives for hedging and efficient portfolio management.
The portfolio has exposure to dividend-paying names, but its core goal is to achieve total return through catalytic growth and shareholder value creation. “We benchmark the fund against the FTSE Straits Times All-Share Total Return Index, but we do not replicate it,” adds Ang.
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He reasons that this approach allows meaningful deviations in sector and stock weights consistent with a high‑conviction approach, as compared to a benchmark-hugging strategy, which he describes as a strategy that is “designed to minimise deviation”.
“Outperformance does not come from mirroring the benchmark, it comes from identifying companies early in their re-rating or capital efficiency journey,” he adds.
Stock selection will be based on bottom-up research, with catalysts including restructuring, divestments, buybacks, dividend improvements, and margin improvements. “Our mandate spans strengthening capital efficiency, governance and sustainability through both allocation and engagement,” says Ang, who adds that he and his team will work with companies on capital allocation, governance and strategy to support long-term value creation.
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While FSGV invests across the market capitalisation spectrum, the prospectus indicates a target allocation of approximately 30% to mid- and small-cap companies, with flexibility to vary based on liquidity and market conditions. “We are actively seeking opportunities in this dynamic, yet under-owned segment of the market,” says Ang.
He adds that the team evaluates IPOs and secondary listings selectively where there is a visible path to long-term shareholder value, and that “pre-IPO” exposure is not a core strategy. “Any participation would be selective and driven by fundamentals, not by the event of a listing,” he adds.
Market, policy tailwinds
The launch of this fund is integral to the broader government initiative to revive the Singapore stock market, with a focus on deepening participation and broadening liquidity beyond index heavyweights.
Fullerton, together with Avanda Investment Management and JP Morgan Asset Management, is part of the first batch of fund managers given a portion of the $5 billion mandate to boost the market. MAS expects to appoint a second batch of managers by the end of 2025.
Beyond the EQDP, MAS also enhanced its Grant for Equity Market Singapore (GEMS) scheme with an additional $50 million and extended it to the end of 2028. The research grant now provides up to $6,000 per report, with additional support for initiation coverage and newly listed or pre-IPO companies, as well as funding to help research houses distribute their content via digital media to reach younger investors.
Listing grants were also expanded, including support for Depository Receipts and higher grants for ETFs, to diversify products and improve trading liquidity.
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The reforms have begun to shift market dynamics. Following the EQDP announcement, selected small- and mid-caps rallied, and the FTSE ST Small Cap Index outperformed the STI and MSCI Singapore from the start of the year until late July. Market analysts also highlighted a trend of focus moving away from banks and towards real estate and select industrials as Sora rates decline and reform-related liquidity widens participation.
According to UOB Kay Hian’s Adrian Loh, the market reforms are overdue and crucial for enhancing Singapore’s status as a financial hub. “We think that the EQDP [equity market development programme] is very timely, and, if I were to be blunt, perhaps a bit late in the game given some of the other initiatives that have been put in place by other regional bourses,” says Loh. Similarly, OCBC Investment Research sees the EQDP as a much-needed liquidity boost for the Singapore equities market, which has been lacklustre due to the Covid-19 pandemic.
Among the three appointed asset managers, Avanda will manage the Singapore-only Avanda Singapore Discovery Fund, which features a strong tilt towards small- and mid-caps and a benchmark-agnostic approach. JPMAM plans an Asian equities strategy with a majority allocation to Singapore, focusing on high-income stocks and tapping its regional research platform. Fullerton’s FSGV is the first retail fund among the three to launch, with daily liquidity and full SGX exposure for retail, accredited and institutional investors.
Ang says the launch complements the broader “value-unlock” push. “Ideally, government intervention should lead to greater investor interest and a positive feedback loop where companies that respond well to interested investors are rewarded for it through their share price increase. This momentum then sustains itself after the liquidity boost, and should also help propel the IPO market,” says Ang, whose firm is part of Temasek Holdings.
However, he notes that regulators and SGX cannot guarantee a positive outcome overall. Ang adds: “Singapore corporates and investors must also play their part. For corporates, this would mean prioritising shareholder value and transparent disclosures so investors can understand your business. For investors, this would mean engaging with research and enhancing financial literacy to ensure that investment decisions are informed.”
Liquidity and valuation impact
A central aim is to widen the demand base in non-index names. “Retail capital has historically been underrepresented in Singapore. FSGV, with daily liquidity, retail access and full SGX exposure, can help address that,” says Ang.
He identifies three knock-on effects as retail participation scales through vehicles like FSGV: liquidity extending into mid- and small-caps; improved price discovery as valuation gaps are identified sooner; and higher re-rating potential as visibility and investor breadth expand, especially when combined with institutional oversight and active ownership.
Fullerton expects breadth to matter as much as direction. “We’re looking at practical markers that show whether activity and participation are broadening in a sustainable way,” Ang says.
The main markers include corporate earnings coming in ahead of expectations and closer to a 10% growth in 2026, suggesting steady underlying operating environment; broader participation across market tiers, with hopes of mid-cap performance tracking closely with large caps, indicating an evenly distributed investor confidence; liquidity extending beyond STI constituents, showing reforms are lifting depth across the market, not just top end sentiment; as well as more observable corporate action, such as restructuring, divestments, buybacks and capital-raising.
“If progress is evident across these areas, it would suggest that policy efforts are translating into real market behaviour rather than short-term headline effects,” says Ang.
The team is focused on areas where fundamentals are improving ahead of attention or valuation. Ang cites industrial and manufacturing names moving into higher value-added niches, mid-cap real estate platforms pursuing capital recycling and asset optimisation, and services or consumer franchises with steady cash flows and pricing power as domestic demand and tourism normalise.
The approach is to identify companies with rising returns on capital, stronger free cash flow and identifiable catalysts, coupled with governance alignment and willingness to engage. “The objective is not to wait for re-rating to occur, but to identify where the conditions for value creation are already forming,” adds Ang.
Although Fullerton will not yet disclose the individual stocks that the fund will invest in, an SGX announcement on Oct 7 reported that Fullerton had acquired 219,300 shares in digital banking and wealth management platform iFast Corporation on Oct 2, worth approximately $1.98 million. The announcement did not state that the acquisition was funded by FSGV.
FSGV’s Singapore-only remit also answers a practical need for local investors seeking a core equity allocation in Singapore dollars. Ang positions the fund as a long-term core holding rather than a thematic or cyclical satellite. With the flexibility to deviate meaningfully from index weights and to invest beyond the top index names, the team aims to capture catalysts earlier, particularly in segments where sell-side coverage is thin and the research gap leaves value on the table.
The fund’s launch also draws on Fullerton’s strong local presence and heritage. The firm emphasises on-the-ground research, company meetings and proprietary screening models that track return on capital, cash-flow trends and balance-sheet strength. This is paired with active engagement on capital allocation and strategy. This approach, Fullerton says, can help close valuation gaps where fundamentals are strengthening but not yet fully reflected in prices.
