Wharton Pension Research Council Working Papers

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Working Paper

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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 CPF accounts to earn interest rate by default. This paper 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.


Pension, retirement, investment, portfolio, investment choice, return and risk, trusts, managers, Singapore

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Copyright/Permission Statement

All opinions are solely those of the authors who acknowledge research support from the Wharton-SMU ResearchCenter at Singapore Management University, and the Pension Research Council at The Wharton School of the University of Pennsylvania. Copyright 2010 © Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


Without implicating him, we acknowledge research assistance from Dimas Adrian Wijaya.

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Economics Commons



Date Posted: 07 August 2019