Beat the CPF investment restriction deadline

1 April 2008 is coming very soon. After this date, the first 20k in CPF-OA and SA won't be available for investment purpose anymore. So, who ever interested to invest would have to act now before it is too late.

However, invest in this uncertain time needs some courage. Although we said it is better to buy when it is cheap than it is expensive. But the human psychology would make it a difficult task. On the investor mind, cheap could go cheaper. However, how often can you catch the bottom? Spread out the investment amount would be a good idea to prevent the difficult market timing job.

Online fund distributor fundsupermart is running a promotion now on some fixed income fund at zero sales charge. The message is if you are planning to invest CPF money in equity fund sometime later, you can park the money in fixed income fund now and switch later. Since they offer zero sales charge and free switching, so the only risk is fluctuation of the bond prices and interest rate. It is worth the risk if you think you are able to somehow catch “the bottom”.

One of the fund under promotion is AIGIF Singapore Bond Fund which has won some fund awards. The fund is down 4.36% on 3 months basis. This is quite unusual, consider other bond fund is holding up well. So, I did a further check. In the fund top 10 holdings, there are Capitalmall Trust and A-REIT. I think that might explain the loss, as REIT is being sold down in the recent market turmoil. Even fixed income fund is not without its own risk.

At the same time, DollarDex also highlighted 3 of their fixed income fund is on zero percent sales charge. I think they are trying to capture the business from people want to park the money in fixed income fund first.