US ETF Equity Index Funds Available for CPF Members to Invest Through CPFIS and Plans to Include Direct Investment Options
Ministry of ManpowerSpeakers
Summary
This question concerns the inclusion of low-cost US exchange-traded fund (ETF) equity index funds under the CPF Investment Scheme (CPFIS). Mr Gerald Giam Yean Song inquired about adding direct investment options in US ETFs to improve returns for CPF members. Minister Dr Tan See Leng clarified that only Singapore Exchange-listed ETFs are permitted to ensure regulatory oversight and safeguard members' interests. He stated that fund managers of SGX-listed ETFs with US exposure may apply for inclusion based on their fees and investment track records. Furthermore, he noted that CPFIS already includes low-cost, passively-managed unit trusts with US exposure and expense ratios comparable to ETFs.
Transcript
34 Mr Gerald Giam Yean Song asked the Minister for Manpower (a) which are the US Exchange-Traded Fund (ETF) equity index funds that CPF members can currently invest in directly under the CPF Investment Scheme (CPFIS); (b) given that the CPFIS-approved list includes only Singapore-based ETFs and that US equity exposure is available only through unit trusts with higher expense ratios, whether the Ministry plans to include direct investment options in US ETF equity index funds under CPFIS; and (c) whether CPF will proactively seek to add low-cost US ETF index funds to improve returns for CPF members.
Dr Tan See Leng: To safeguard Central Provident Fund (CPF) members' interest, only Exchange-Traded Funds (ETFs) listed on the Singapore Exchange (SGX) can be included under the CPF Investment Scheme (CPFIS), as foreign products are subject to changing regulations in jurisdictions outside of the Government's regulatory oversight.
Currently, there are ETFs listed on the SGX with exposure to United States (US) equities1. Fund managers of SGX-listed ETFs may choose to apply for their products to be included under the CPFIS, depending on their commercial considerations. The CPF Board carefully assesses these applications, taking into consideration factors, such as investment-related fees and investment track records.
CPF members already have the option to invest directly in a number of low-cost, passively-managed unit trusts with US equity exposure through CPFIS2. These unit trusts have comparable expense ratios as ETFs.