Written Answer to PQ on Investing in US equity index funds under CPFIS

NOTICE PAPER NO. 3144 OF 2024 FOR THE SITTING ON OR AFTER 15 OCTOBER 2024

QUESTION NO. 6210 FOR WRITTEN ANSWER

MP: Mr Gerald Giam Yean Song

To ask the Minister for Manpower (a) what specific risks does the CPF Board believe CPF members will face if allowed to invest directly in US equity index funds that are not already present in the current CPFIS-approved products; (b) how are these perceived risks quantified; and (c) whether these risks outweigh the demonstrated long-term outperformance of US equities.

Answer: 

1. All investments are subject to risk, and investments in foreign products are further subject to regulatory risks of other jurisdictions. To manage these risks for CPF members, the CPF Board only includes products under the CPF Investment Scheme (CPFIS) after carefully considering factors such as investment track records and investment-related fees. Additionally, these products must be registered with the local authorities.

2. CPF members can already invest directly in a number of US equity index funds under the CPFIS today. Product providers, including other US equity index fund managers, can apply for their products to be included under the CPFIS depending on their commercial considerations, and the CPF Board will assess accordingly.