Here's what Singapore's mutual fund investors want for the next 6 months

It's all about yields.

Eastspring Investments, the Asia asset management arm of UK-based Prudential plc, today announced the findings of its inaugural Mutual Fund Investor Behaviour Study together with the launch of Singapore’s first ‘Growth & Income Index’.

The Growth & Income Index* offers insight into the asset allocation plans of Singapore mutual fund investors for the next six months. The Index shows that there is an allocation preference toward Income Funds among Singapore’s current and intending fund investors in the next six months.

“Our study revealed that mutual fund investors in Singapore are continuously searching for yield in the current low interest environment,” said Mr Alvin Chiu, Head of Marketing, Eastspring Investments.

“Some of our other key findings about mutual fund investors in Singapore are that they are generally risk-averse and understand the benefits of long-term investing. They are also keen to use asset classes beyond traditional bonds to acquire yield and total return,” added Mr Chiu.

Eastspring Investments’ research is based on 300 interviews with mutual fund investors in Singapore and was conducted in July 2013.

The index measures mutual fund investor appetite on a scale of 0 to 100 with 0 being income exposure and 100 being growth exposure. With a score of 43, this first Index score indicates that investors have reported an intention to shift toward income funds in the next six months.

According to the study, Asian bonds are currently the most popular income asset class (50%) among income fund holders in Singapore. This is followed by multi-asset incomes (39%) and high dividend equities (38%).

In the next six months, income fund holders plan to reduce their holdings in Asian bonds significantly, although they will still be among the most popular holdings.

The research revealed an intended increase in ownership in Asian high dividend equities and Asian multi-asset income products, which will potentially make these products the two most owned asset classes among income fund holders in Singapore.

“We are pleased to see that mutual fund investors in Singapore own a geographically diverse portfolio compared with some of the other markets in the region.

The average yearly review of investment portfolios show that Singapore’s fund investors understand the value of long term investing in mutual funds,” said Ms Koh Hui-Jian, Head of Retail Sales, Eastspring Investments.