The Singapore equities, property and Real Estate Investment Trusts (REITs) markets enjoyed a tremendous year in 2021. The Straits Times Index (STI) is a capitalisation-weighted stock market index that tracks the performance of the top 30 companies listed on the Singapore Stock Exchange, and it is on track to post one of its best returns. The Real Estate Investment Trusts (REITs), an investment vehicle that owns and operates income-producing real estate properties, has benefitted from Singapore’s economic recovery.
How would these asset classes perform in 2022? Lion Global Investors Limited (LGI), an award winning and trusted name in fund management, proudly presents its outlook of the Singapore equities and REITs and reasons why investors should still consider these asset classes in the current market environment.
We hold a positive view of Singapore equities. Its financial sector would benefit from rising bond yields should the global economy shifts towards an inflationary environment as growth picks up. Geopolitically, nations are shifting towards protectionism, which accelerates the need for energy and supply chain security, increasing the demand for countries to relocate factories locally and accelerate green infrastructure development. This requires sustained capital expenditure globally and may push inflation to a higher level than we experienced over the last decade.
Singapore companies respond positively to periods of higher inflation, with the Singapore equities outperforming global equities during inflationary periods. The Singapore economy is an integral part of the global industrial production and commodity supply chain, such as robotics, semiconductors, oil and gas and renewable energy. Whilst inflation is a negative tax on the consumers in developed economies, the producer price inflation stemming from higher industrial components and commodity prices is a positive for companies in general for Singapore as this translates to higher company revenues.
Banking stocks, a bedrock of the Singapore equity market, are also likely to continue to do well. In addition to benefiting from rising interest rates, Singapore banks stand are poised to benefit from a growing asset base. Singapore banks are well-positioned to capture safe-haven flows from the Asia-Pacific region, and can continue to do so over the next few years should geopolitical tensions between the Eastern and Western powers persist.
Interested investors looking to capture the potential opportunities locally can consider LGI's managed funds within the Singapore equity space. One of their funds, LionGlobal Singapore Trust Fund^, was awarded Best Fund over 3 & 5 Years at the Refinitiv Lipper Fund Awards 2021.
As Singapore progresses towards normalisation, we see positive signs across different Singapore REIT properties. Industrial REITs are experiencing positive rent revisions, which often indicates firming fundamentals. There are early signs of recovery in the office REITs segment with a pick-up in leasing activities. However, we expect retail REITs to continue to face challenging times in the shorter term, but we could well see the bottom with the gradual relaxation of Covid-19 restrictions.
Nevertheless, we remain positive on the Singapore REITs as they offer an attractive annual dividend yield of 5.62%*.
Lion Global Investors partners with Great Eastern
LGI manages unit trust funds that help investors achieve their wealth accumulation goals and partners with The Great Eastern Life Assurance Company Limited (Great Eastern) to offer its managed funds in investment-linked plans (ILPs). Investors can start their wealth accumulation (coupled with protection) journeys by considering the following two ILPs by Great Eastern.
A. GREAT Wealth Advantage 2, a regular premium ILP that comes with additional features such as Welcome Bonus and Loyalty Bonus that boost your investments. It also offers death, total and permanent disability and terminal illness benefits. Premiums must be paid in cash.
B. GREAT Invest Advantage, a single premium ILP whereby the premiums can be paid with funds through the CPF Investment Scheme (CPFIS) or Supplementary Retirement Scheme (SRS), with no penalties for partial or full surrenders. It also offers death and terminal illness benefits.
Please reach out to the Great Eastern’s financial representatives for more information and an in-depth discussion.
Besides gaining access to these professionally managed funds, policyholders also get more value from the ability to customise their investment portfolios in ILPs offered by Great Eastern. Customisation is desirable as each individual’s circumstances vary in risk appetite, investment horizon, wealth goals and life stages. Some examples of individuals at different life stages:
1. Young couples saving for the all-important housing deposit
2. Young parents accumulating an education fund
3. Retirees looking for low-risk investments to decumulate in their silver age
On top of that, policyholders can perform free-of charge fund switches# as they continue to optimise their investment portfolios through different life stages.
^Source: Lion Global Investors Limited. Past performance of the fund and the manager is not necessarily indicative of its future performance.
*Source: Lion Global Investors Limited, as of 28 February 2022. Past performance is not necessary indicative of its future performance.
#Great Eastern may impose a fee at its discretion for fund switching in the future.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
The information provided may contain projections or other forward-looking statements regarding future events or future financial performance of countries, markets or companies, and such prediction or forecast is not necessarily indicative of the future or likely performance of the Fund(s).
Investments in these plans are subject to investment risks including the possible loss of the principal amount invested. Please refer to Fund Details and Product Highlights Sheet for the specific risks of the fund(s). Past performance is not necessarily indicative of future performance.
A Product Summary and a Product Highlights Sheet in relation to the fund(s) may be obtained through Great Eastern or its financial representatives. Potential investors should read the Product Summary and the Product Highlights Sheet before deciding whether to invest in the fund(s). Returns on the units of the fund(s) are not guaranteed. The value of the units in the fund(s) and the income accruing to the units, if any, may fall or rise.
The information presented is for general information only, and does not have regard to the specific investment objectives, financial situation or particular needs of any particular person, and should not be construed as an advice or recommendation to invest in the funds.
As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid.
Protected up to specified limits by SDIC.
This is part 4 of the 5-parter series.