Ultimate List of Mutual Funds for SG Investors

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Difficulty: Moderate

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1) Ultimate List of Bond Mutual Funds

2) Ultimate List of Stock Mutual Funds

3) Considerations when choosing a Mutual Fund

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The InvestQuest’s View: A Mutual Fund’s performance is driven by multiple factors, including but not exclusive to a Fund Manager’s skill, an element of luck and fees. It is possible for a Mutual Fund with a particular investment style to outperform for several years and underperform for subsequent years. Nonetheless, we thought it would be useful to shortlist a few — for areas where Mutual Funds outperform ETFs.

Disclaimer: This is a list of Mutual Funds that are suitable to express your investment view (e.g. you are positive on a particular region and want exposure). We are not saying that all these mutual funds should be bought now. What and when to buy depends on which regions / sectors you think are going to do well.

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If you find this article useful, do feel free to check out our other ETF and Mutual Fund related articles too!

1. Ultimate Stock ETF List for SG Investors
2. SGX-listed Stock ETFs: Which are good enough for our readers?
3. SGX-listed Bond ETFs: Which are good enough for our readers?
4. Best ETF to buy for China Stock Exposure
5. China Tech: The best ETFs and Stocks to invest in
6. Ultimate List of LEVERAGED Stock ETFs
7. When to use Active Mutual Funds vs Passive ETFs

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1) Ultimate List of Bond Mutual Funds

Mutual Funds have historically outperformed ETFs for sub-asset classes such as Corporate Bonds, High Yield Bonds, and non-US Stocks. For more details, you can read this article.

As such, for our ultimate list, we are focusing on these categories. If you’re interested in investing in other categories (e.g. US Stocks), do check out our Ultimate Stock ETF List for SG Investors.

We’ll start off with our shortlisted Bond Mutual Funds for SG investors. We have arrived at the list after screening across the universe of SGD-denominated Mutual Funds. Our screen covers aspects such as the Fund’s size, cost-efficiency, historical risk-adjusted performance and length of time since fund inception. Specific details on the fund screen is discussed later on.

Selected Bond Mutual Funds: PORTFOLIO DETAILS

SGD-denominated Funds are in the white cells, while their USD-denominated share class are in the yellow cells (if and where available).

Selected Bond Mutual Funds: HISTORICAL PERFORMANCE

While historical performance is not indicative of future performance, it is important to pick mutual fund managers who have a track record of doing well.

Do note that we expect returns for the next five years to be lower than the past five. Recall that we have been in a bond bull market, and with interest rates and credit spreads as low as they are now, it is appropriate to manage down return expectations.

Selected Bond Mutual Funds: MAX PEAK-TO-TROUGH

We quantify risk by reviewing the max peak-to-trough drawdown experienced by the individual funds during the recent Feb-April 2020 market sell off (indicated on the rightmost column in the table below). This can help investors visualize if they can comfortably stomach such volatility during a bad market.

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2) Ultimate List of Stock Mutual Funds

Mutual Funds have historically outperformed ETFs for sub-asset classes such as Corporate Bonds, High Yield Bonds, and non-US Stocks. For more details, you can read this article.

As such, we focus on non-US stocks for our ultimate list of Stock Mutual Funds.

Below are our shortlisted Stock Mutual Funds for SG investors. We have arrived at the list after screening across the universe of SGD-denominated Mutual Funds. Our screen covers aspects such as the Fund’s size, cost-efficiency, historical risk-adjusted performance and length of time since fund inception.

Selected Stock Mutual Funds: PORTFOLIO DETAILS

Selected Stock Mutual Funds: HISTORICAL PERFORMANCE

SGD-denominated Funds are in the white cells, while their USD-denominated share class are in the yellow cells (if and where available), and benchmark indices are in the grey cells.

5-year annualized returns do suggest that most of our chosen mutual funds have managed to perform in-line or better than the benchmark. See second rightmost column in below table.

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3) Considerations when choosing a Mutual Fund

In our view, the ideal SGD-denominated Mutual Fund should have a stable and consistent track record, decent amount of assets under management (to reduce the chance of the fund shutting down and to ensure that the fund manager gets sufficient operational and research support) and low management fees. A higher proportion of active share (aka off-benchmark investments) is also welcome, since an investor would be better off buying into a cheaper passive ETF otherwise.

With that in mind, the funds shortlisted have met the criteria of:

1. Long Track Record: At least 5 years since fund inception
2. Sizeable Asset Base: Fund assets of more than US$250 million
3. Low Fees: Total Expense Ratio of less than 2% per annum and fees are deemed to be low-moderate relative to funds within the same category
4. Good Historical Performance: Strong risk-adjusted performance relative the fund’s specific category, on the basis of 3-year Sharpe ratios and 5-year historical returns.
5. Ease of Access: Funds shortlisted are accessible via Fundsupermart (FSM) and Dollardex (Aviva subsidiary), unless otherwise specified.
6. Currency-hedged: Where available, we have selected fund share classes that are SGD-hedged. This means that foreign currency fluctuations (relevant to Mutual Funds that invest in non-SGD stocks and bonds), will not add or detract significantly from the fund’s total return.

The InvestQuest’s View: A Mutual Fund’s performance is driven by multiple factors, including but not exclusive to a Fund Manager’s skill, an element of luck and fees. It is possible for a Mutual Fund with a particular investment style to outperform for several years and underperform for subsequent years. Nonetheless, we thought it would be useful to shortlist a few — for areas where Mutual Funds outperform ETFs.

If you find this article useful, do feel free to check out our other ETF and Mutual Fund related articles too!

1. Ultimate Stock ETF List for SG Investors
2. SGX-listed Stock ETFs: Which are good enough for our readers?
3. SGX-listed Bond ETFs: Which are good enough for our readers?
4. Best ETF to buy for China Stock Exposure
5. China Tech: The best ETFs and Stocks to invest in
6. Ultimate List of LEVERAGED Stock ETFs
7. When to use Active Mutual Funds vs Passive ETFs