Practically all retail investors are aware they can tap their CPF funds to invest but roughly a quarter have not done so.
According to a survey jointly done by the Securities Association of Singapore (SAS) and the Securities Investors Association (Singapore) (SIAS), 96% of the respondents are aware they can tap their CPF funds but only 72% have done so. Nonetheless, 73% plan to invest in the next six to 12 months.
The survey, meant to examine the investment behaviour of CPF members and usage of the Central Provident Fund Investment Scheme (CPFIS), was done last March and received more than 3,500 responses.
The survey covered questions on the investment instruments that CPF members invested in, their concerns and constraints regarding CPFIS investing, preferences for investment products and the type of financial content they would like to see that can help them invest better in their investment journey.
According to the survey, the most popular investment choices for CPF members include Singapore Savings Bonds, T-Bills, stocks, ETFs and unit trusts.
There is strong interest in business trust products listed on the Singapore Exchange , as well, with two-thirds of respondents expressing a willingness to invest in them if included in the CPFIS.
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Despite interest in investing, a substantial 82% of respondents indicated a desire for more CPF-related investing content. This underscores the need for enhanced financial literacy initiatives to empower investors in making informed investment decisions.
Investors have perceived fees as a barrier to investment. The survey revealed that 71% of participants would be more likely to invest if agent bank fees were to be reduced.
“Singaporeans view CPF investing as a crucial tool for retirement," says SAS chairman Luke Lim.
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"A significant majority in the survey expressed interest in utilising their CPF funds for investments such as stocks and ETFs. Investors also believe in the importance of financial education as they seek more knowledge to make informed decisions regarding their long-term investment portfolios," he adds.
David Gerald, founder, president and CEO of SIAS is pleased to note that Singaporeans are becoming more savvy and looking into different ways to invest.
"However, before making any investments, it is very important to understand the risks involved and how the potential returns compare with the risk-free interest that is earned in the various CPF accounts.
"Remember that part of your CPF is to sustain you in retirement so bear this in mind when investing your CPF funds. SIAS will continue to work with partners on unbiased education to help more Singaporeans make informed investment decisions,” he adds.
