Improve Singapore stock market -- Put 5-10% of CPF Life funds into SGX listed equities

There's talk of improving returns of Singapore stock market nowadays (see CNA article) by

- Improving corporate governance

- Asking our sovereign funds (Temasak Holdings/GIC) to invest more in Singapore stocks. (Govt said no - article link)

- Getting quality firms to list in Singapore, which has very few new listings nowadays

I would, however, suggest that Govt put in 5-10% of CPF Life funds into Singapore stocks. It can be done in stepped manner e.g. put 1% of CPF Life funds into SGX equities every year until it hit desired X%

- This will boost returns / liquidity for Singapore stocks.

- This will enhance long-term returns of CPF Life fund, as CPF Life fund is an annuity fund that will last for a long time. This long duration is suitable for some of the funds to be deployed into Singapore equities which is likely to beat or be in line with 4% returns in the long run* but has short-term volatility

*Based on STI ETF webpage, 10-year annualised returns (ending Jun 2024) of STI index and STI ETF is 4.24% and 3.82% respectively. The annualised returns since the start of STI etf is 6.46%. 

- Compared to other countries, Singapore stocks tend to have higher dividend yield and lower volatility. This makes it appealing for annuity funds such as CPF Life fund (and income-seeking investors too).