Why is there revised criteria for new funds under the CPF Investment Scheme (CPFIS)?
Currently, new funds applying for admission under the CPF Investment Scheme (CPFIS) are evaluated based on a number of factors such as the capability of the fund managers, the investment philosophy of the fund, its key decision makers, the appropriateness and quality of its research and analysis, its portfolio construction and implementation, and its past performance.
While this screening mechanism has helped to ensure a minimum standard for the funds under the CPFIS, more stringent criteria have been introduced so that funds under the CPFIS would better meet the objectives of CPFIS, which is to help members invest for the long-term for financial security in old age. In addition to setting a higher evaluation benchmark based on the current screening mechanism, the Board will also consider the funds' expense ratio. The latter will help lower the investment cost for members over the longer term. Funds submitted for admission under the CPFIS should also preferably have a performance track record of at least 3 years as this will allow the Board to better assess whether the funds are able to give consistently good performance against the benchmark.