Removal of CPF Investment Scheme Sales Charges
CPF members who are investing their CPF OA or SA...The lacklustre performance of CPF investments has been well documented across several forums and publications. While market performance has been a contributing factor over the past few quarters, the disproportionately high fees is a one of the key contributors. This consequently makes investing CPF OA monies unappealing. Which begets the question: why invest your CPF when we get a risk-free guaranteed return of 2.5% p.a.?
In March 2018, the Ministry of Manpower announced the removal of sales charges and reduction of wrap fees for CPFIS investments. Come October 2020, there is no longer any sales charges levied, and wrap fees are further reduced from 0.7% to 0.4%. Does that make existing CPFIS investments significantly better? The answer is not as straightforward. Despite the removal of sales charges and lower wrap fees, there are fundamental problems that need to be addressed within the fund distribution industry
