Posted inFund Flows

Singapore fund flows fall amid global sell-offs

Net inflows into funds sold in Singapore plunged by almost 65% over the past quarter, Morningstar data shows.
view Panoramic of the Singapore Skyline and Marina Bay, the marina is the centre of the economy in singapore, there are here all the building of all the majors bank and insurance.

Nonetheless, the amount of money flowing into the Lion City’s funds significantly slowed from S$4.4bn a quarter earlier, equivalent to a fall of 64.9% quarter-over-quarter.

Funds in Singapore posted net inflows of S$1.55bn for the first quarter of 2022, continuing the positive momentum for the eighth consecutive quarter, according to the Singapore Fund Flow Report by Morningstar.

“The drop is due to increasing redemptions across major asset classes,” said Wing Chan, Morningstar’s head of manager research Europe and Apac.

“We continued to see the conflict in Ukraine, global inflationary pressures, tightening monetary policies and China’s renewed Covid lockdowns as the main headwinds for the rest of 2022,” he added.

Allocation insights

Across asset classes, equity funds absorbed S$1.05bn, while the gross inflow amounted to S$4.1bn.

But that is almost 50% less than the previous quarter of S$1.9bn due to high redemption pressure, Morningstar noted.

Investors showed the most interest in the Asia region, with the Asia ex-Japan category posting the largest net inflows of S$363.0m, and Apac ex-Japan equity posting S$160.5m.

Technology stocks were also popular, with net inflows of S$181.0m over the period.

With fears about recession, global large-cap growth funds recorded the largest outflow of S$69.9m, followed by healthcare, at S$43.6m.

Allocation funds were the category with the second highest net inflow during the period with S$456.8m.

With heightened geopolitical tensions and market uncertainty, money market funds reported S$446.3m in net inflows, with gross inflow amounting to S$2.8bn.

The net flow is mainly attributed to Asia money markets, while other money market groups recorded a nearly muted flow activity for the period.

On the other hand, fixed income funds saw net redemptions of S$408.37m during the first three months of this year.

Gross inflows into bond funds slowed to S$2.8bn from S$4.3bn a quarter ago, according to the Morningstar report.

Among bond categories, Asia fixed income was the only category that received net subscriptions, but the positive net inflows dropped to S$433.2m from S$1.9bn in the fourth quarter.

Global fixed income and US fixed income funds were the categories that suffered from most outflows, at S$482.5m and S$289.9m respectively.

Fund flows by asset class for Q1 2022 (in S$m)

 InflowsOutflowsNet flows
Fixed income2,819.943,228.31(408.37)
Money market2,807.832,361.52446.31
Source: Morningstar Direct. Data as of 31 March 2022

“During periods of uncertainty, it’s important for fund investors to review their portfolios while staying focused on their investment goals,” said Chan.

“It is also crucial for investors to pick funds that are backed by capable portfolio managers, stable and well-resourced supporting teams, as well as a tried-and-tested investment process,” he added.

Part of the Mark Allen Group.