Singapore—Unlike other pension funds around the world, Singapore’s Central Provident Fund (CPF) has defied the downward trend experienced by assets under management (AUM). The total amount of CPF has actually grown by 6.6 percent over the past year, going from S$375 billion in total assets in 2017 to nearly S$400 billion in 2018.
Singapore has also stayed in ninth place when it comes to assets, based on the most recent World 300 research of ‘The world’s largest pension funds – 2019,’ which was published on Monday, September 2. The study was published by Willis Towers Watson’s Thinking Ahead Institute, which describes itself as “a global not-for-profit innovation hub made up of engaged institutional asset owners and service providers committed to changing and improving the investment industry for the benefit of the end saver.”
While AUM at the world’s 300 largest pension funds increased by 15.1 percent in 2017, it decreased by four percent in 2018 to a total of US$18 trillion.
In the list of top 20 biggest funds, AUM also dropped by 1.6 percent year on year and is now at US$7.3 trillion, accounting for a little over 40 percent of the total AUM. According to the study, the top 20 pension funds’ AUM declined for first time in seven years.
However, between 2013 and 2018, the top 20 funds grew by 4.7 percent, averaging higher than the growth of the top 300 funds in the same time frame, which hovered at around 3.9 percent.
The Business Times (BT) quotes head of research for the Thinking Ahead Group, Bob Collie, as saying, “A tougher market environment in 2018 meant that AUM growth paused, but the underlying trend remains one of growing pension markets worldwide.
The pace of change in the investment world is a challenge, and scale is a huge advantage in a lot of ways. Many of the most interesting and important developments start with the largest funds, and as new investment ideas like the total portfolio approach and universal ownership gain traction in these organisations, they influence the whole market.”
Seven of the top 20 pension funds are from the Asia-Pacific region. Japan’s Government Pension Investment has stayed in the number one spot. However, this year’s fourth and seventh placers, South Korea’s National Pension Service and China’s National Social Security respectively, have gone down by one place from last year’s results.
North America still has the highest share of AUM, with 45.2 percent. But Asia Pacific is now ranked number two with 26.2 percent of all assets in the study. Europe ranks third with 24.9 percent.
For the five year period between 2013-2018, North America grew the fastest, at 5.8 percent. The Asia-Pacific region followed at 5.2 percent, and Europe only grew by 0.5 percent.
According to the head of investment in Asia at Willis Towers Watson, Jayne Bok, “Despite macroeconomic and global trade headwinds, Asia is still a growing region with a young population, and its long-term growth trajectory remains positive.
However, we should expect a general slowdown in its growth, in line with global markets.”/ TISG
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