Publication Type

Journal Article

Publication Date

2010

Abstract

As one of the oldest and largest national mandatory defined contribution pension systems, Singapore's Central Provident Fund (CPF) permits employees to invest their retirement accumulations in a variety of investment instruments rather than leaving them in a government-managed investment fund. Many plan participants avail themselves of this opportunity, selecting from a menu of more than 200 `included' funds that satisfy specific admission criteria set by the CPF Board. Nevertheless, many other funds are excluded from the list of eligible retirement system investments. This article shows that the `included/non-included' screening criteria have been effective, in that included fund managers earned higher average returns, demonstrated better stock-picking and displayed better market-timing skills, than their excluded fund counterparts. In addition, the included funds exhibited stronger persistence in performance, though they offered marginally lower diversification benefits to plan participants.

Discipline

Finance and Financial Management

Research Areas

Finance

Publication

Pensions: An International Journal

Volume

15

Issue

4

First Page

276

Last Page

286

ISSN

1478-5315

Identifier

10.1057/pm.2010.29

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Share

COinS