When I started investing my Supplementary Retirement Scheme (SRS) funds 7 years ago, it was with several experiments in mind. Firstly, the SRS account adopts a monthly Dollar Cost Averaging investment methodology, as opposed to market-timing for my cash account. Secondly, the SRS funds were invested in an index fund and a balanced fund, as opposed to individual stock selection for the cash account. Thirdly, the monthly investments were split between an index fund and a lifecycle fund, to understand whether lifecycle funds could serve the needs of an investor throughout his lifetime.

What are lifecycle funds? These are funds whose asset allocations change from aggressive to conservative as time progresses. Using the fund that I bought (UOB GrowthPath (GP) 2040) as an example, the allocation to equities will reduce from an initial 83% (in 2002) to an eventual 20% by 2040. This saves the need for an investor ...