(March 23): Singapore’s bonds have beaten all their developed-market peers this year as the war in Iran has bolstered haven demand, and fund managers say they are still one of the safest places to be.
A Bloomberg index of sovereign debt from the island state has returned 0.8% so far in 2026, outperforming 13 other global counterparts, even as surging oil prices have buffeted most fixed-income assets. That sets them apart from many traditional havens such as US Treasuries and the yen that have declined.
Singapore has earned the reputation as a haven and may have “attracted capital inflows as foreign investors seek refuge during times of heightened geopolitical risk”, said Wei Ming Cheong, a fund manager at Eastspring Investments in Singapore.
The relative outperformance of Singapore’s bonds is likely to continue, barring any sustained impact on the nation’s macro fundamentals, he said.
This isn’t the only time Singapore’s bonds have stood out. The securities beat all their developed-nation peers in the first half of last year during a sell-off triggered by US President Donald Trump’s announcement of higher global tariffs in April.
Part of the reason for the positive return has been the Singapore government’s prudent financial management, according to Principal Asset Management Co.
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“Singapore’s recent outperformance has been underpinned by its comparatively strong fiscal position relative to many developed‑market peers,” said Howe Chung Wan, the head of fixed income for Asia at Principal Asset in Singapore. This “has helped reinforce investor confidence at a time of heightened global uncertainty,” he said.
The island state’s bonds have also been given an extra tailwind by the relative strength of the local currency, which is the best performer in Asia this year after the ringgit and yuan.
While quicker inflation is bad for bonds, any uptick in the nation’s consumer-price numbers due this week may have a silver lining as it would increase expectations for policy tightening from the Monetary Authority of Singapore (MAS), and support the local dollar.
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Singapore’s core inflation probably quickened to an annual rate of 1.3% in February from 1% the previous month, according to a Bloomberg survey before the data is released on Monday.
“Singapore’s dollar should continue to outperform other Asian currencies on expectations of MAS policy tightening at the April meeting,” said Khoon Goh, the head of Asia research at Australia and New Zealand Banking Group Ltd in Singapore.
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