Date of this Version
Pensions: An International Journal
Singapore's mandatory national defined contribution pension system permits participants to invest their retirement savings in a wide range of investment instruments if they wish, rather than leaving their savings in Central Provident Fund (CPF) accounts to earn interest rates by default. This article asks whether workers seeking to earn higher returns can expect to do better than the CPF-managed default, by moving their money into professionally managed unit trusts. We use historical data to investigate whether fund managers possess superior stock picking and market timing skills, as well as whether they exhibit persistence in performance and offer diversification benefits to participants. The evidence is mixed, which could explain why so few participants opt out of the CPF-run default fund.
The final publication is available at Springer via http://dx.doi.org/10.1057/pm.2009.33
pension, retirement, investment, portfolio, investment choice, return and risk
Koh, B. S., Mitchell, O. S., & Fong, J. H. (2010). Collective Investments for Pension Savings: Lessons from Singapore's Central Provident Fund scheme. Pensions: An International Journal, 15 (2), 100-110. http://dx.doi.org/10.1057/pm.2009.33
Date Posted: 27 November 2017
This document has been peer reviewed.