If you’re looking to invest in mutual funds, Singapore is a great place to do so. The country offers a wide range of top-rated funds, and the fees are generally very reasonable. In this article, we’ll look at some of the best mutual funds in Singapore and discuss why they might be a good fit for your portfolio. We will also look at the different types of funds and then provide a few tips to help you make a sound investment decision.
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What are mutual funds?
Mutual funds are pooled investments that allow investors to buy shares in a portfolio managed by professional fund managers. Funds may be actively or passively managed, allowing investors to diversify their investments across multiple asset classes with lower transaction costs than buying individual stocks and bonds. As the name implies, these funds pool money from multiple investors and invest it in line with the objectives stated in their prospectus.
Types of mutual funds available in Singapore
Singapore’s three central mutual funds are equity, fixed-income, and balanced/mixed funds.
Equity funds focus on investing in stocks and aim to provide higher potential returns over the long term than other types of investments. Fixed-income funds provide more conservative returns by investing in bonds and other debt instruments. Balanced/mixed funds are a mix of equity and fixed-income investments which aim to strike a balance between potential returns and risk profiles.
The top-rated mutual funds in Singapore
There are many top-rated mutual funds available in Singapore. Still, some of the most popular ones include the Lion Global Investors Great Eastern SGD Equity Fund, the UOBAM Asian High Yield Bond Fund, and the Aberdeen Asia Pacific Income Fund.
The Lion Global Investors Great Eastern SGD Equity Fund is an actively managed fund that invests mainly in large companies listed on the Singapore stock exchange. It has a five-year annualised return rate of 8% as of April 2021.
The UOBAM Asian High Yield Bond Fund invests in bonds from various countries in the Asia-Pacific region, intending to provide a steady stream of income for long-term investors. It has a five-year annualised return rate of 4.2% as of April 2021.
Lastly, the Aberdeen Asia Pacific Income Fund invests in a range of debt instruments across the Asia-Pacific region, intending to provide investors with regular distributions and capital growth over the long term. This fund has a five-year annualised return rate of 4% as of April 2021.
Why should you invest in these top-rated mutual funds?
The top-rated mutual funds in Singapore offer numerous benefits for investors. First, they are highly liquid and can be cashed out quickly if needed. Second, these funds provide significant diversification across different asset classes and geographical regions, allowing investors to spread their risk exposure, reducing losses from concentrated positions in individual stocks or sectors.
Third, these funds are managed by professional fund managers with extensive experience investing in financial markets and staying up to date on market trends. Lastly, many of these top-rated funds also have low management fees, making them more cost-effective than other investments, such as ETFs (Exchange Traded Funds).
Tips for investing in mutual funds
When investing in mutual funds, a few essential tips must be kept in mind. First, you should understand each fund’s investment objectives and fees before investing. Additionally, it would help if you diversified your investments across multiple funds to reduce risk exposure. Ensure your portfolio is regularly monitored and rebalanced to align with your financial goals.
Another important consideration is to understand the taxation implications associated with different funds. Lastly, always consult a financial advisor before making any investments to ensure that you make informed decisions.
Finally, it is essential to remember that investing in mutual funds involves risk, and you should only invest money you are willing to lose.
How to start trading mutual funds?
In Singapore, investors can start trading mutual funds through various outlets. To begin investing, you can open an account with a broker or an online platform such as Tiger Brokers, POEMS or OCBC Securities. Alternatively, you can invest in mutual funds directly from the fund managers if they support direct investments.
Before investing in any fund, you should always read through the prospectus and understand the associated risks. You should also research different funds to identify ones that meet your investment objectives.
Mutual funds allow investors to diversify their portfolios and benefit from professional management of their investments. There are many top-rated mutual funds available in Singapore which can provide investors with attractive returns over the long term. Still, it is vital to consider all the considerations mentioned above before investing. With careful planning and research, investors can confidently invest in these top-rated mutual funds in Singapore and potentially enjoy more significant returns.