facebookWould you use your CPF OA to invest in Unit Trust? Any views on this ? - Seedly

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Anonymous

07 Aug 2020

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General Investing

Would you use your CPF OA to invest in Unit Trust? Any views on this ?

Discussion (15)

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I did invest my CPF OA in unit trust, but I did it in my twenties, knowing that I would get a flat someday. After a decade, I surrender the policy so that the returns will go back to my CPF for my housing. The returns were not bad though. I chose to fund all the returns for my housing so that I would take lesser housing loan.

Shengshi Chiam, CFA

Shengshi Chiam, CFA

04 Aug 2020

Personal Finance Lead at Endowus

Hi,

Based on your reply to Nicholas, it seems like your finances are quite tight because you will be using CPF to pay for your HDB loan, with no excess CPF monies to invest in CPFIS (you need to have more than 20k).

Rather than trying to chase short term returns where there is a higher chance of you being worse off than getting the risk free 2.5%, you may want to consider taking a bank loan instead of a HDB loan, where you save up on interest costs.

Christina Seah

Christina Seah

04 Aug 2020

Financial Consultant at Great Eastern FA

Hi! I have invested my CPF-OA in Unit Trusts & ILP.

100% equity position as I'm looking at a 5 - 6 year runway for my OA to grow.

Current unit trust portfolio = +30% since invested in March (Lucky to have bought into the dip)

Current ILP portfolio = +0.45% since invested in the last week.

Do note that I'm just aiming for above 2.5%p.a. return. My personal expectation is actually 8% yoy. Anything beyond is a bonus to me. (Personally I am expecting my returns to even out in the longer run due to volatility)

The general considerations would be your risk appetite, time horizon and also fees & charges. Do note that your CPF Investment Scheme account will also have a quarterly charge for your holdings.

Personally, I plan to adjust my holdings if I feel a certain fund has hit it's resistance (in my view). It's necessary to get a fund update every 6 months/ a year or even every 3 months. so that at least you can make sure you are on track to your goals. Would be happy to share more but it would make this answer too long πŸ˜‚ Hope that helps!​​​

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Bang Hong

Bang Hong

04 Aug 2020

Sustainable Spender Specialist at Spender Bang

Depends, but typically no.

  1. Reserving OA for stable small returns (2.5%) to form the "imaginary bond segment". You will see the beauty of withdrawing OA at 55 years old, when you are confident to have the CPF FRS @ your 55 years old mark, where CPF-SA alone is above the FRS @ your 55 years old. Then you play the shielding game and tadahhh, that monies in CPF-OA will sit in your CPF-RA , and you can withdraw anytime , payment via PayNow. Need to learn the dynamics of this wonderful game, where interests is withdraw first.

  2. Reserved for housing repayment. This is when I have enough for housing repayment for the next 12-24 months, I will use the excess to invest. Else security on hosuing comes first. In case when you are tired you want a career break, or say jobless, housing repayment is no biggie, no big concerns.

Pang Zhe Liang

Pang Zhe Liang

04 Aug 2020

Senior Financial Services Consultant at AIA Singapore Private Limited

It depends on your risk appetite and your objective. Personally, yes, I will invest my CPF monies. P...

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