LionGlobal Singapore Trust Fund’s cumulative performance / Photo: Lion Global Investors
“We have been working together for more than 14 years, and we have always been focused on the Singapore market and looking at companies together,” says Ong during the interview.
Within the fund, the top three industries are the financial, industrial and communications sectors, which form the core of the local economy. Excluding the large caps within the top 10 holdings, small- and mid-cap names held by the fund include relatively well-known names such as Marco Polo Marine (SGX:5LY
) , CSE Global (SGX:544) , Food Empire (SGX:F03) and Riverstone Holdings (SGX:AP4) .
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Lau, citing Morningstar’s data as at the end of November 2025, points out that the fund is ranked in the first quartile across year-to-date, one, three, five and 10 years versus peers on an active return (SGD) basis. It is also the only Singapore equity fund (SGD share class) with an overall Morningstar Rating of five stars as of Nov 30, 2025.
Lau says that both she and Ong explore the island together in search of new investment ideas, which has helped them develop strong expertise in the domestic market. “Both of us meet listed and non-listed companies through industry contacts on a regular basis. Because of that, we were able to get insights and access to the small and mid-cap companies, and as a result, giving us opportunities to tap into this undiscovered space.”
New record highs seen
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Ong also points out that the STI has been hitting new record highs, driven mainly by the performance of the three local banks. “The reason for that is due to geopolitical uncertainty, which resulted in Singapore now being a safe haven that attracts sizable fund flow. As a result, banks have developed their wealth management capabilities, and this sector has been growing at 20% to 30% CAGR in terms of AUM growth,” he adds.
Ong believes that this can continue to grow as long as the geopolitical uncertainties remain, and the local market is going to benefit from this structural flow. “For 2026, it is still going to look uncertain, and therefore our banks will continue to benefit from this structural flow, which will drive the performance of the STI.”
Apart from the structural flow, Ong believes that with the $5 billion Equity Market Development Programme (EQDP), investors’ attention will be drawn towards the small and mid-cap space.
“If you look at any market globally, in order for the small and mid-cap space to do well, the large caps have to do well, as it will generate enough liquidity and wealth and profits to begin, which can then be reinvested into the small and mid-cap space, which typically is done by domestic investors across all industries. So I think that phenomenon is happening in the Singapore market right now and that allows the small and mid-cap stocks to thrive,” adds Ong.
Ong further adds that with the coordinated efforts by the Monetary Authority of Singapore (MAS), the spotlight is now on the small and mid-cap space to earn its right as an emerging asset class for investors. “That is why we feel that if the virtuous cycle of the large cap continues and the continuation of MAS’s policy, we should see another constructive year for 2026,” says Ong.
Pivot and survive
From Ong’s perspective, the small and mid-cap space has experienced occasional years of outperformance, driven by sector-specific themes, thanks to their respective exposure to global cycles. For instance, tech did well in 2017, healthcare in 2020 and oil and gas in 2022. “However, we feel that this time round will be different as the entire asset class is emerging, therefore it is not really on a sector-by-sector basis anymore.”
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Nonetheless, the team identifies specific sectors that could drive growth. Construction is one, with orderbooks expected to remain strong, while oil and gas have been picking up in recent years. “Because of low oil prices, the supply side of oil and gas services has actually shrunk and now is in a situation where, despite relatively lower oil prices, vessel charter rates continue to hold up,” adds Ong.
Sectors aside, the team believes that those companies that have been around for years, given their ability to pivot and survive, are the ones that are now able to capture new opportunities and ride on new growth themes, such as AI, in terms of data centre build-up, for instance.
“With these companies pivoting to new growth areas and more fund managers coming aboard, I suppose these will help in terms of price discovery and narrative as a whole,” says Ong.
Criteria for picking a stock
Lau helps pick stocks for the fund by looking out for positive change catalysts that can drive growth. “Our Singapore equity portfolio managers work closely with our Asia regional team sector analysts, with cross-pollination of ideas on a top-down and bottom-up basis. This is important as Singapore is an open export economy, where global and regional macro trends can shape the outlook of export-driven sectors in our equity market,” she adds.
From there, the team will further evaluate stocks by conducting in-depth fundamental analysis that includes understanding business risk and governance, assessing the management’s strategy and the ability to execute and considering valuations and what has already been priced in by the market.
“I think the important point that Erica raised is that when it comes to the small- and mid-cap space, they are grossly under-researched. Having interaction with the company’s management over a period of time is especially important because we need to understand their behaviour, how they provide guidance and their ability to deliver,” adds Ong.
40% weightage is key
While the fund does not have a fixed target for portfolio allocation in the small- and mid-cap space, the team believes that a 40% allocation offers a balanced risk-reward ratio for the opportunities available in the market.
“I believe that now the small- and mid-cap space is undergoing a paradigm shift to become an emerging asset class, and this segment has always been trading at a deep discount, and we think that there is potential for rerating when this asset class matures,” says Ong.
Lion Global has backed its convictions with action. In recent months, it has taken part in a series of placements and share sales by companies such as ISOTeam (SGX:5WF) , Sanli Environmental (SGX:1E3) , Trendlines Group (SGX:42T) , and, most recently, Attika Group (SGX:53W) on Jan 12, which has a market cap of just $60 million.
“Because we are part of a larger regional team, when we meet Singaporean companies and compare their fundamentals against the regional peers, we realise that our companies are actually quite good, but they are just not very well known,” says Ong, adding that this valuation gap is something diligent investors can exploit for their own margin of safety.
Longer-term perspective
In the longer term, the team expects geopolitical tensions and protectionism to be a characteristic of this decade, accelerating the need for energy and supply chain security.
This would require higher levels of global capital expenditure. Industrial companies in sectors such as aviation, marine and utilities are well-positioned to meet this demand. At the same time, Singapore’s status as a safe haven gains greater significance amid geopolitical uncertainty.
Apart from that, the team sees that the current set of market development initiatives will help to build new industry verticals within the stock market and hence attract more companies to list locally.
“With more listings, this will essentially rebuild the investment universe of the Singapore market to beyond just investing in banks,” says Ong.
He also sees AI as an interesting trend to look out for, as it is a geopolitically contested area. “There are opportunities for AI engineers across the world to come to Singapore as a neutral ground to develop AI applications,” Ong adds.
The biotech sector is another trend to watch. Ong noted that Singapore has been developing this area for some time and that greater equity market opportunities in the coming years could support a pipeline of listings.
The team adds that the local stock market is like an ecosystem, whereby the government sets out the conditions. However, it is also up to fund managers like themselves to do the research and help companies out there create value.
“By attracting new companies and building new verticals, investors will actually see a future beyond what the current ecosystem looks like,” says Ong.
