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Don't know how to structure a portfolio, cannot assess risk, or have little knowledge of suitable products?

Don't worry, we can help you. Advice free for first-timers too!

Choices for lower risk
Unit trusts are not all about high risk investments, and not all unit trusts go into equities. Some offer investments in money market instruments (among the safest of holdings) and government bonds. Also, some of these lower risk funds have no sales charge at dollarDEX.

And unlike an FD (Fixed Deposit) there is no minimum holding period. So you can invest this week and sell your holdings anytime you like, without any penalty levied by a bank or fund manager.

While it's worth remembering that equities generally give the best returns when markets are not bullish, we feature below a selection of useful lower risk unit trusts.

Cash for short to medium term, or for emergency planning

  • LionGlobal SGD Money Market Fund offers the safety of a money market fund, with returns usually higher than the two funds mentioned above. The fund aims to manage liquidity and risk while looking to provide a return which is comparable to that of SGD short-term deposits. The fund will invest in high quality short-term money market instruments and debt securities. Some of the investments may include government and corporate bonds, commercial bills and deposits with financial institutions.
  • Phillip Money Market Fund. The fund's investment objective is to preserve principal value and maintain a high degree of liquidity while producing returns comparable to that of Singapore Dollar savings deposits. The fund invests primarily in short term, high quality money market instruments and debt securities, which may include government and corporate bonds, commercial bills and deposits with financial institutions.
  • Fullerton SGD Cash Fund. The investment objective of the fund is to provide investors with liquidity and a return that is comparable to that of the Singapore Dollar Banks Saving Deposits rate.

An additional advantage of Phillip Money Market Fund and Fullerton SGD Cash Fund is that switches out are done on the same deal day if done before the cutoff time (usually 3pm). This means the fund to which you are switching will be priced on the same day (applies to almost all funds, please check individual fund summary page as some are done at T+1). This feature is useful for investors doing market timing.

USD cash management

If you have USD you could consider Phillip USD Money Market Fund A for a lower risk parking place. The investment objective of this fund is to provide liquidity and manage risk while looking to provide a return which is comparable to that of USD short-term deposits. Payment and redemption are in USD.

Cash for longer term

How can you get decent returns on your cash for a year or longer without taking too much risk? One way is to use a bond fund, and pick one that is not exposed to currency risks, that is, holds primarily SGD investments. Note though because they are not money market funds, and their long-term yields will be higher, the risks (volatility) will be higher too. So there is low risk but not no risk.

Example funds

  • Legg Mason Singapore Bond Fund A. Its investment objective is to achieve yield enhancement by aiming to outperform the benchmark in Singapore Dollar terms via active but prudent management of a portfolio comprising primarily of Singapore bonds, cash and cash equivalent instruments. Available under CPFIS
  • PineBridge IF Singapore Bond Fund. The objective of PineBridge International Funds - Singapore Bond Fund is to invest as a direct investment portfolio, to provide stable income with capital preservation by investing primarily in high credit quality SGD fixed income instruments issued by Singapore and non-Singapore entities. Available under CPFIS.
Note: all funds mentioned above do not have any capital protection or guaranteed return.

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Page last updated 11 Apr 2012