Strip Bond
In investing, bonds serve a central function as a safe haven for steady returns. Everywhere on earth, they are considered one of the safest options within the investment spectrum, especially for investors looking for fixed-income opportunities. Bonds- the loans actually made by investors to entities such as governments or corporations- pay back principle along with interest over a predetermined period. While most bonds have a similar design, strip bonds are a bit special in their setup; this catches the eye of certain investors who seek long-term employment.
The article will delve further into the world of strip bonds: what they are, how they work, the kinds that exist, and some possible advantages and disadvantages for the investor. By the end, you’ll have a sense of whether strip bonds might be the right addition to your portfolio.
Table of Contents
What is a Strip Bond?
A strip bond, also known as a zero-coupon bond, is a type of bond where the interest payments (or coupons) are separated from the principal amount. Unlike traditional bonds, strip bonds do not offer regular interest payments to the bondholder. Instead, they are sold at a discounted price, and investors receive a lump sum at maturity. The return comes from the difference between the bond’s purchase price and the face value, or maturity value.
Since strip bonds do not provide periodic interest payments, they can be seen as a predictable investment, often appealing to those with long-term financial goals like retirement planning or education funding.
Understanding Strip Bonds
Understanding the formation process helps in better apprehending strip bonds. Strip bonds result from the traditional bonds, whose interest and principal payments are separated or ‘stripped’ from each other. This results in two different financial instruments: one is that of interest payments, while the other is the principle. Each one of them is sold as strip bonds individually.
For instance, a bond that offers ten annual coupon payments along with a principal repayment can be stripped into 11 individual securities: 10 strips for the coupon payments and one strip for the principal. Investors can purchase each of these individually, giving them control over which part of the bond they wish to hold.
Strip bonds are popular among long-term investors because they provide a known lump sum at a specific future date. Investors purchase these bonds at a discount and wait for the maturity date when they will receive the bond’s face value without the distraction of reinvesting regular interest payments.
Types of Strip Bonds
There are different types of strip bonds based on the source from which they are derived:
- Government Strip Bonds: These are created by stripping government-issued bonds. In countries like the US and Singapore, governments issue bonds that can be stripped into individual securities. For example, the US Treasury issues strip bonds called Treasury STRIPS (Separate Trading of Registered Interest and Principle of Securities).
- Corporate Strip Bonds: Corporate bonds can also be stripped, meaning companies can issue bonds where the coupons and principle can be separated and sold as individual securities. These are generally considered higher risk compared to government strip bonds due to the potential credit risk associated with corporations.
- Synthetic Strip Bonds: Some financial institutions may create synthetic strip bonds by purchasing regular bonds and stripping the coupons from the principle. These synthetic bonds function in the same way as government or corporate strip bonds but are created by private entities.
How Strip Bonds Work
The process of creating and trading strip bonds is fairly straightforward. A financial institution, for example, a brokerage firm, takes a regular bond and separates its coupon payments from the principal. These stripped pieces are then sold to investors as individual strip bonds.
For example, suppose an investor buys a strip bond that will pay US$50,000 at maturity in 10 years. The investor will pay a discounted amount, such as US$40,000 today, and in 10 years, they will receive the full US$50,000. Since there are no periodic interest payments, the return on the investment comes from the appreciation of the bond’s value over time.
Strip bonds work well for investors who want a known payout at a future date without needing to manage periodic cash flow.
Examples of Strip Bonds
One of the most well-known examples of strip bonds is Treasury STRIPS in the United States. As in the case of the US Treasury, traditional bonds are also later stripped into separate securities of interest and principal and traded as such. Treasury STRIPS tend to enjoy significant popularity among low-risk, long-term investors.
Hence, in Singapore, Singapore Government Securities may be stripped and traded as individual bonds.These bonds are ideal for investors seeking guaranteed returns with minimal risk.
Frequently Asked Questions
Some benefits are that returns are predictable at maturity, they are best for long-term goals, and there is no reinvestment risk.
The disadvantage is that there is no illiquidity risk. Purchasing power declines with inflation, and there can be liquidity issues as some are redeemed at irregular periods.
Zero-Coupon Bonds: No interest payments; sold at a discount and paid in full at maturity.
Traditional Bonds: Pay regular interest, sold close to face value, return spread out over time.
Strip bonds, such as pension funds, are excellent investments for long-term investors. They are traded over the secondary market, where demand arises from those who want to receive large, certain sums of money at regular intervals.
Strategies include laddering, buying bonds with different maturities, and duration-matching bond maturities with future financial needs.
Interest rate risk, inflation risk, and liquidity issues due to the lack of regular income. Rising interest rates can reduce the market value of strip bonds.
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- Income Bonds
- Junk Status
- Interest-Only Bonds (IO)
- Industrial Bonds
- Flat Yield Curve
- Eurodollar Bonds
- Dual-Currency Bond
- Fixed-to-floating rate bonds
- First Call Date
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- Remaining Term
- Callable Corporate Bonds
- Green Bond Principles
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- Junk Status
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- Industrial Bonds
- Flat Yield Curve
- Eurodollar Bonds
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- First Call Date
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- Baby Bonds
- Remaining Term
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- Bond warrant
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Thai Beverage PLC: Challenging Operating Environment Amid External Pressures
**Company Overview** Thai Beverage PLC (ThaiBev) is a leading beverage company in Southeast Asia, operating primarily in the spirits and beer segments. The company maintains significant market positions in Thailand and Vietnam through its beer operations, while also commanding a strong presence in the regional spirits market. **Below-Expectation Financial Performance** ThaiBev's recent financial results fell short of analyst projections. For FY25, revenue reached only 92% of forecats, while profit after tax and minority interest (PATMI) came in at 86% of expectations. The company's spirits division was particularly weak in the second half of FY25, with PATMI declining 3% year over year. Most concerning was the sharp 11% year-over-year contraction in volumes during the fourth quarter of FY25. The primary driver behind this underperformance was the border dispute with Cambodia, which resulted in a massive exodus of migrant workers from Thailand. This development caused significant disruption to supply chains and contributed to a decline in volumes across ThaiBev's operations. **Mixed Segment Performance** Despite these challenges, ThaiBev's beer segment demonstrated resilience with strong earnings growth in the second half of FY25. This improvement was attributed to higher contributions from Thailand operations, which reduced minority-interest impacts, and by aggressive cost-cutting measures in distribution and administrative expenses. However, beer volumes still declined 1.2% year over year in 2H25, primarily due to weakness at Sabeco following price increases. **Investment Outlook and Recommendation** Phillip Securities Research maintains an ACCUMULATE recommendation for ThaiBev, while lowering the target price to S$0.53 from S$0.56. The revised valuation reflects a 22% reduction in FY26 earnings estimates due to lower revenue projections and a 12x FY26 price-to-earnings ratio, which aligns with the company’s four-year average forward PE. Despite significant forecast cuts, analysts expect earnings growth in FY26 as management is anticipated to align operating expenses with reduced volumes. The investment case is further supported by potential gross margin expansion opportunities driven by substantial declines in input costs, including packaging, malt, and molasses prices. However, ThaiBev continues to face a challenging consumer spending environment, recently exacerbated by flooding conditions that may further pressure near-term performance. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
BRC Asia Ltd: Strong Performance Drives 36% Profit Growth
**Company Overview and Market Position** BRC Asia Ltd operates as a leading steel reinforcement solutions provider in the construction industry, specialising in steel rebar delivery and related services. The company serves as a critical supplier to Singapore's construction sector, supporting major infrastructure and residential development projects across the region. **Strong Financial Performance Highlights** BRC Asia delivered impressive financial results with adjusted profit after tax and minority interests (PATMI) surging 36% year-on-year in the second half of FY25. Full year revenue and adjusted PATMI came in at 96% and 101% of forecasts, respectively, demonstrating solid execution against expectations. Excluding the S$16.5 million disposal gains on associates from 2H24 and other one-off items, the underlying business performance showed remarkable strength. The standout performance was driven primarily by an estimated 34% year-on-year increase in steel rebar delivery volumes, marking the highest volume growth since 2H23. This surge reflects stronger construction project offtake across BRC Asia's key markets, indicating robust demand conditions in the construction sector. **Robust Order Book Supports Future Growth** BRC Asia's business outlook appears particularly strong, supported by a substantial S$1.9 billion order book. This represents a 36% year-on-year increase and is 42% above the company's five-year historical average. The significant boost stems from S$570 million in T5 contracts awarded during 3Q25, providing substantial revenue visibility for the coming periods. Steel rebar delivery volumes are expected to continue ramping up over subsequent quarters as project offtake strengthens, with peak volumes anticipated in 2026-27. Key growth drivers include HDB BTO buildout programmes, the T5 project ramp-up, and expansion contracts for the Marina Bay Sands Integrated Resort which are expected to be tendered to main contractors by year-end. **Investment Recommendation and Valuation** Phillip Securities Research has upgraded BRC Asia to BUY from NEUTRAL, raising the target price to S$5.10 from the previous S$4.10. The revision reflects a 15% increase in FY26 adjusted PATMI forecasts, driven by higher expected delivery volumes. The target price incorporates valuations rolled over to FY26/27, with weighted average cost of capital (WACC) and growth rate assumptions at 10% and 2.5% respectively. The stock also offers an attractive FY26 dividend yield of 4.8%, enhancing its investment appeal. This article was written with help from PhillipGPT, based on a report by a Phillip Securities Research analyst. Reference link: BRC Asia Target Price S$5.10 - Stock Analyst Research | POEMS Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
The ILP Debate: Why Singaporeans Struggle With Financial Product Decisions
Recent discussions in Parliament and data from the Financial Industry Disputes Resolution Centre (FiDReC) have shed light on a deeper issue: many Singaporeans struggle to make confident decisions when it comes to choosing financial products — especially more complex ones. At a glance ILP complaints have surged: The Monetary Authority of Singapore (MAS) reported that FIDReC handled 211 investment-linked policy (ILP) complaints in 2024 — a sharp increase from 55 complaints in 2023 1. The ILP debate is longstanding: Some say ILPs cost too much and are too complex; others defend their benefits, like tax and estate planning flexibility. But the real issue lies elsewhere: many people simply do not have a clear, structured way of evaluating which product suits them. A solution exists: The Facilitating Decision-Making (FDM) methodology, first introduced in the Insurance and Financial Practitioners Association of Singapore Journal, offers a practical, client-friendly framework that helps investors and advisers make decisions together in a clearer, more transparent way. Why ILPs Are Back in the Spotlight Investment-linked policies (ILPs) have always been debated, but a recent rise in sales, followed by a significant spike in complaints, pushed the topic back into the public spotlight and into Parliament. The events culminated in a public exchange between two industry voices, financial educator Christopher Tan and adviser Trishita De Mello. Christopher contended that ILPs combine high costs with complex structures, making them unsuitable for most investors. Mello, however, countered that Christopher’s argument unfairly misleads and oversimplifies ILPs. Both arguments have their own merit. But beneath the debate lies a simpler truth: many investors simply cannot connect what they read in product disclosures with how the product actually works in real life. Even though ILPs made up only a small portion of all policies sold in 2024, the surge in complaints shows that many Singaporeans still misunderstand what they are buying 2. This is not just a “product problem” — it’s a decision-making problem. Why Financial Decisions Feel So Hard Part of the challenge is that today’s suitability checks rely heavily on human judgement. They help rule out clearly unsuitable products, but they do not give people a structured way to compare options. This means: advisers try their best to guide clients using experience and intuition clients often struggle to understand trade-offs between one plan and another both sides may walk away with different interpretations of the same explanation For example: It’s easy to say term insurance is not suitable for funding a child’s university fees. But if a client asks, “Should I pick an endowment plan? An ILP? Or invest separately?”, there’s no standard, easy-to-follow way to examine the differences. As products get more complex, so do misunderstandings 3. A Framework for Clarity: FDM This is where the Facilitating Decision-Making (FDM) methodology comes in. FDM provides the structure that many clients and advisers have been missing. FDM takes what good advisers already do in their heads — comparing factors, weighing trade-offs, and explaining choices — and turns it into a transparent process that clients can clearly follow. The methodology involves: identifying meaningful and relevant factors such as potential returns, risk, liquidity, tax implications, legal considerations and client specific requirement such as ESG or Shariah compliance assigning weights to each factor, forcing both client and financial adviser to prioritise trade-offs scoring potential strategies such as ILPs, term-plus-investment combinations, or pure fund platforms — on the identified factors on a scale of 0 to 10, with financial advisers providing a rationale for each score While the ratings may be inherently subjective, each one can be accompanied by a brief explanation from the financial adviser outlining the rationale. The sum product scores are then tallied to see how closely each option aligns with what the client actually values. This transparent and reviewable framework fosters trust between both parties, invites challenges or clarification, and provides clients with meaningful co-ownership of the process. What Financial Planning Often Misses FDM also acknowledges that the best strategy can change over time. Market shifts and evolving client priorities mean that product suitability is contextual, hence there is no ‘best plan of all time’; only the ‘best at that point in time’. With a structured process like FDM, clients are not tied to a one-time decision. Instead, planning becomes an ongoing partnership where decisions can be reviewed and updated using the same transparent framework. A Call for Clearer Conversations The recent scrutiny around ILPs is not just about ILPs themselves. It reflects a deeper industry challenge: helping clients understand how recommendations are made. A structured approach like FDM can elevate industry clarity by ensuring recommendations can be explained, reviewed, and improved over time. It empowers both advisers and clients to look beyond product features and focus on what truly matters — clarity, confidence, and informed decision-making. The Takeaway: The Best Plan Is the One You Understand Financial planning does not need to feel intimidating. When both adviser and client follow a clear framework, decisions become easier, clearer, and more aligned with real-life goals. Products may change. Markets may change. Life will certainly change. But with a structured approach to decision-making, you can always find the “best plan for you — at this point in time”. Contributor: Isaac Fang, CFA Portfolio Manager (Dual Licence) Phillip Securities Pte Ltd (A member of PhillipCapital) http://bit.ly/TTPisaac References: [1] https://www.mas.gov.sg/news/parliamentary-replies/2025/written-reply-to-parliamentary-question-on-investment-linked-policies [2] https://www.fidrec.com.sg/_entity/annotation/7aae5aed-95a7-ef11-b8e9-6045bd22652a [3] https://www.straitstimes.com/business/concerns-raised-over-investment-linked-plans-as-demand-for-them-goes-up-in-singapore [4] https://www.businesstimes.com.sg/opinion-features/investment-linked-insurance-products-complexity-label-long-time-coming Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Simple but Powerful: Strategies Behind DCA and DVA
1. Introduction When is the right time to invest? The truth is, timing the market is difficult, even for professionals. That’s why systematic investing strategies like Dollar-Cost Averaging (DCA) and Dollar Value Averaging (DVA) are popular. These approaches take the guesswork out of investing, helping you stay consistent and focused on long-term growth. In this article, we’ll explain how you can apply DCA and DVA to your own investment journey. 2. What is Dollar-Cost Averaging? DCA is the investment strategy of investing a fixed amount of money at regular intervals, regardless of the price or market conditions. Let’s look at an example of the results of investing US$500 at the end of each month in the SPDR S&P 500 ETF Trust (SPY) from Jan to Aug 2025: Month Price (US$) Investment (US$) Jan 607.5 500 Feb 585.56 500 Mar 549.83 500 Apr 547.57 500 May 588.93 500 Jun 617.38 500 Jul 639.46 500 Aug 647.47 500 Dollar Cost Average (DCA) Chart As of 25 Sep 2025, the market price stands around US$657.94, while the average cost price at month-end based on the above DCA example is US$597.96, registering an approximate 10% growth on the US$4,000 invested. By spreading your investments over time, DCA reduces the risk of investing all your money at the wrong moment. It also encourages discipline, since contributions are made consistently regardless of short-term market fluctuations. This strategy is especially suitable for investors who prefer a straightforward, recurring approach that works well with a fixed monthly budget, without needing to monitor the market closely. Benefits of DCA: Reduces the risk of investing all at once at the wrong time Encourages discipline with consistent contributions Simple to implement, especially for investors with a fixed monthly budget 3. What is Dollar-Value Averaging? DVA takes a more active approach. Instead of investing a fixed amount each time, contributions are adjusted based on market price. DVA adjusts contributions based on market performance—investing more when prices are low and less when prices are high—helping you to take advantage of market swings. Applying this method to the earlier example of investing in the SPY from Jan to Aug 2025, the results would look like this: Month Price ($) Investment ($) Shares Bought Jan 607.5 500 0.823 Feb 585.56 600 1.024 Mar 549.83 800 1.455 Apr 547.57 900 1.643 May 588.93 500 0.849 Jun 617.38 300 0.485 Jul 639.46 200 0.312 Aug 647.47 200 0.308 Dollar Cost Average (DCA) Chart Likewise, as of 25 Sep 2025, the market price of SPY is approximately US$657.94, while the average cost per share is US$580.10, representing a total position of 6.899 shares. With a total investment of US$4,000, this corresponds to an approximate 13.48% return. A noticeable decrease in share purchases during periods of strong upward price momentum. This strategy is particularly suitable for investors who prefer a performance-sensitive approach and are comfortable with variable contribution amounts. Benefits of DVA: Adjusts contributions based on market conditions: buy more when prices are low, less when prices are high Potentially higher returns than DCA if consistently applied Suitable for investors comfortable with variable contributions and active portfolio management 4. Pros and Cons of the Different Strategies Strategy Pros Cons Dollar Cost Average (DCA) Simple and consistent; reduces emotional decisions May underperform in steadily rising markets (opportunity cost) Dollar Value Average (DVA) More responsive to market swings; potentially higher returns Requires monitoring and flexible cash flow; more complex 5. Conclusion Both investment strategies provide a structured way to invest consistently and remove the stress and uncertainty of trying to time the market. Ultimately, your choice between DCA and DVA depends on your personal financial situation, risk tolerance, and investment goals. If you prefer a hands-off, steady approach, DCA may be the right fit. If you are comfortable with actively responding to market fluctuations and seeking to optimise returns, DVA could offer additional growth potential. Both strategies reinforce the fundamental principle of disciplined, long-term investing: consistency matters more than timing. By sticking to a systematic plan—whether through DCA or DVA — investors can navigate market ups and downs with greater confidence, gradually building a portfolio that supports their individual long-term financial goals. Check out our other articles if you’re interested in learning more about fractional shares. Visit our website or contact our dedicated Night Desk team at globalnight@phillip.com.sg or (+65) 6531 1225. Start investing smarter with POEMS today — open an account and trade the US markets now! Open an Account Now! Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Mooncakes: The Hidden Environmental Cost of Gifting
Every year during the Mid-Autumn Festival, many homes across Asia are filled with colourful mooncake boxes. Some are lavishly designed, embossed with gold foil, and often heavier than the pastries they protect. Crafted to impress and symbolise prosperity, they serve as tokens of appreciation in both corporate and personal exchanges. Yet after the celebration ends, many of these boxes end up discarded, barely used and seldom recycled. This seemingly harmless tradition reflects a broader tension between aesthetic excess and sustainable responsibility. For investors, the discarded mooncake box offers profound Environmental, Social, and Governance (ESG) lessons that extend far beyond the packaging industry. The first lesson lies in the environmental cost of aesthetic indulgence. A typical premium mooncake box is made from layered materials, including coated paper, plastic inserts, metallic embellishments, and magnetic clasps, making it nearly impossible to recycle efficiently. According to Bloomberg, the popularity of mooncakes and their elaborate packaging is driving China’s rising demand for plastics, with polyethylene output nearly doubling since 2018 and packaging equipment production increasing by 32.2% this year. [1] Similar patterns are observed in Singapore, where elaborate packaging has become a competitive differentiator among brands. From an ESG investment standpoint, this issue is best viewed through the lens of resource efficiency and the circular economy. Excessive packaging contributes to higher waste generation and increased Scope 3 emissions, highlighting the importance of responsible consumption and production as outlined in UN Sustainable Development Goal 12. For investors, this underscores the need to assess companies based on measurable sustainability outcomes—such as energy efficiency ratios, waste reduction targets, carbon disclosure scores, and supply chain transparency—rather than appearances alone. The second ESG dimension is the social factor. It emerges when we consider why companies continue producing such elaborate packaging. The answer lies in consumer psychology and societal norms. Many consumers perceive luxury packaging as a proxy for quality or sincerity. In the corporate gifting culture of Asia, presentation often outweighs practicality. This social expectation drives firms to overproduce, even when executives acknowledge the waste involved. For investors, this highlights how social sentiment shapes corporate ESG behaviour. Companies respond to consumer values, and when those values shift, capital flows follow. In particular, evolving preferences toward sustainable alternatives highlight potential transition risks for companies that are gradually adapting their packaging and product offerings. Businesses that align with this growing demand for sustainability are better positioned to maintain market share and support long-term profitability. For example, in recent years, sustainable packaging companies such as DS Smith (UK) and Huhtamäki (Finland) have outperformed traditional peers, benefiting from global consumer preference for biodegradable materials. [2] The discarded mooncake boxes, therefore, are not just environmental waste but also a social signal. It is evidence of a misalignment between consumer behaviour and sustainability awareness. As younger generations grow increasingly sustainability-conscious, demand for minimalist, eco-friendly products will expand. Firms that fail to adapt may face reputational and financial risks. The governance aspect of ESG relates to how companies balance short-term marketing appeal with long-term sustainability goals. Approving costly, non-recyclable packaging might signal weak sustainability oversight or poor board alignment with ESG principles. When companies prioritise optics over impact, it suggests governance complacency. For investors, governance quality is therefore a key indicator of whether ESG initiatives are genuine or merely performative. As global regulators, from the EU’s Corporate Sustainability Reporting Directive (CSRD) to Singapore’s mandatory climate disclosures, tighten standards, weak governance will translate directly into financial penalties and reputational damage. The mooncake box thus symbolises ESG immaturity: decisions made without integrating environmental and social responsibility into corporate frameworks. The broader takeaway for investors is discernment. This involves distinguishing intrinsic value from cosmetic appeal. Just as consumers are drawn to the shimmering box rather than the mooncake’s quality, investors can be seduced by ESG branding that lacks operational depth. According to MSCI’s 2024 ESG Trends report, over 60% of global funds labelled sustainable had no measurable decarbonization strategy. [3] Sustainable investing must be data-driven, focusing on tangible performance indicators such as emissions intensity, renewable energy use, and board diversity. Ultimately, the discarded mooncake box is symbolic of humanity’s sustainability paradox, illustrating our instinct to value appearance over essence. Yet, in a hopeful turn of events, several confectionery and packaging firms are now adopting biodegradable materials, reusable tins, or digital gifting models that reduce waste entirely. Brands like Maxim’s and Mei-Xin have begun introducing recyclable paper packaging, while newer entrants market minimalist boxes that position environmental care as part of their brand identity. These shifts demonstrate how sustainability, when aligned with brand equity, can yield both financial and reputational dividends. Investors should recognise that ESG investing is not philanthropy. It is, in fact, risk-adjusted capitalism. Companies that anticipate and mitigate environmental and social risks consistently outperform those that react too late. The mooncake box, then, becomes both a cautionary symbol and a call to action: to demand substance over spectacle, long-term stewardship over short-term appeal, and responsibility over reputation. As the glitter fades and the boxes pile up, the true investors are those who see lessons in the waste by understanding that sustainability begins not in grand gestures but in small, deliberate choices. Keen to explore how sustainable investing can make a lasting impact? Learn more at phillipfunds.com/sustainable-investing. Contributor: Kenneth Chan Wealth Manager Phillip Securities Pte Ltd (A member of PhillipCapital) https://bit.ly/kennethchanwb Appendix: [1] https://www.bloomberg.com/opinion/articles/2025-10-08/luxury-mooncakes-won-t-go-away-nor-will-plastic-waste [2] https://time.com/collection/worlds-most-sustainable-companies-2024/ [3] Sustainability and Climate Trends to Watch Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Why Idle Cash Attracts Scammers & How to Beat Them
You may come across news about scams on your social media feeds. Recent headlines such as “Scam victims in Singapore lost $456m in the first half of 2025” raise alarm. From investment fraud to phishing emails and fake trading apps, online scams are on the rise. Many of these schemes prey on people with idle cash, basically – money sitting in their bank account without any active management. Common examples of scams include fake “high return” investment platforms promising 10-20% per month, social media scams where strangers solicit “joint investments”, and insurance premiums scams, where callers pose as insurers, claiming that you have “outstanding premiums” to pay or risk a policy lapse. When “Safe” Investments Turn Out to Be Scams Someone close to me once fell for a scheme that seemed harmless at first. The scammers convinced him that he could “book hotel rooms” online as an investment. The pitch sounded safe: invest some money, wait for tourists to check in, and then receive both your capital and profit when they check out. It sounded good, but of course, there were no hotels, no tourists and no returns. Fortunately, he didn’t lose everything, but the stress and the near-miss experience were painful reminders that scams don’t just target the greedy, but also prey on the trusting, the busy and anyone with idle funds seeking an opportunity. Recently, a client called to check if she had any outstanding premiums. She had received a call demanding immediate payment or risk lapsing her policy. Fortunately, she was aware of such scams and contacted me before making any payments. However, this type of scheme can be convincing, as most Singaporeans own some form of insurance, making the scam appear genuine. Here are some important reminders: 1. Legitimate insurers will never ask for your PIN or bank login details. 2. Premium payments should always be made through official company channels. 3. The best safeguard is to schedule annual reviews with your trusted financial advisor, so you’re always clear on which policies you have and when your premiums are due. Even if you do not fall for scams, idle funds carry another silent risk — underutilisation. Cash sitting in a bank account and earning little to no returns is especially vulnerable in today’s high-inflation environment. You might think idle money is “safe”, but in reality, it’s either exposed to scams or quietly losing purchasing power. This is where SMART Park makes a difference. Once you have opted in to SMART Park - Excess Funds Facility and transfer the money into your POEMS account, the funds will automatically be placed into the money market fund. Your cash then generates daily returns, which you can conveniently view from the POEMS Mobile 3 app. Enjoy full flexibility — your funds in SMART Park stay liquid and can be accessed anytime you need them. Simply submit a withdrawal request, and you should receive the funds within 1 working day. This adds an additional layer of security before you decide how to use your funds. Think of SMART park as a secure parking lot: instead of leaving your “car” in a dark alley (where scams lurk), you're parking it in a well-lit and guarded facility. In short, SMART Park is low risk, liquid and generates better returns. Scams often thrive on two things: greed—chasing unrealistic returns, and inattention—ignoring idle money or losing track of your insurance details. By parking your funds in SMART park and staying connected with your advisors, you address both risks: avoiding the lure of risky schemes while letting your money work for you safely and automatically. In today’s world, protecting your wealth is not just about steering clear of scams; it’s also about ensuring your cash isn’t left idle and unproductive. With SMART Park, you can be confident that your funds are managed and are growing steadily in the background. Often, the most harmless-looking attempts by scammers can cause the biggest damage. The smarter choice is to keep your cash somewhere both secure and productive. Ask your advisor today how SMART Park can make your idle cash work for you! Contributor: Elin Chee Financial Services Manager Phillip Securities Pte Ltd (A member of PhillipCapital) http://bit.ly/TTPelin Appendix: [1] https://www.straitstimes.com/singapore/scam-victims-in-spore-lose-record-1-1-billion-in-2024-highest-number-of-cases-ever-reported Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Night Owls and Early Birds: A Guide to Extended Hours Trading
Introduction Extended-hours trading refers to buying and selling securities outside regular trading hours. Unlike standard trading sessions, these transactions are executed primarily through Electronic Communication Networks (ECNs), which facilitate trades when traditional exchanges are closed. Key Takeaways Two Sessions: Extended-hours trading in the US consists of two sessions — pre-market (4:00 am to 9:30 am ET) and post-market (4:00 pm to 8:00 pm ET). Market Indicator: Activity during these sessions often provides early signals for the regular trading day, though participation is typically lower, resulting in reduced liquidity. News Impact: Extended-hours trading is especially useful for reacting to breaking news, earnings releases, and merger announcements, many of which occur outside standard market hours. Risks & Volatility: Prices can swing more sharply during these sessions due to reduced trading volume and wider spreads. As a result, extended-hours activity may not always reflect the true momentum of the broader market. What is Extended-Hours Trading? Extended-hours trading is exactly what it sounds like — trading that takes place outside of the US market’s official opening hours. It is divided into two sessions: the pre-market (4:00 am to 9:30 am ET) and the post-market (4:00 pm to 8:00 pm ET). Pre-market activity often provides early clues about how stocks might perform once the market officially opens. While trading volume is generally lower during this period, significant changes in price and volume can hint at potential market direction and investor sentiment. Similarly, the post-market session reflects how investors react to news and earnings announcements released by many highly traded companies after the closing bell. This activity can offer insights into overall market sentiment and may influence expectations for the next trading day. Why Trade in Extended-Hours? 1. Opportunities for Early Reactions to News and Announcements Important news — such as earnings reports, financial results, or merger and acquisition news — is typically made before the market opens or after it closes. Extended-hours trading gives investors the chance to respond immediately, rather than waiting for the opening bell. Key economic data releases, such as jobs reports and inflation figures, also tend to come out around 8:30 am ET, during pre-market hours. In times of heightened volatility, extended sessions are often the first to reflect breaking news, allowing investors to adjust their positions quickly. Likewise, announcements made during post-market hours can trigger sharp price swings and significant gaps from the previous close. For example, Oracle (ORCL.US) surged more than 30% in post-market trading following news of a deal with OpenAI. Yahoo Historical Price on ORCL.US Though not as drastic, these movements after earnings reports or stock exchange filings are quite common. An example is when Coinbase (COIN.US) fell about 6% after its Q2 2025 earnings release. CNBC Reporting on Coinbase (COIN.US) Q2 Results 2. Gauge for breakouts or breakdowns during normal trading hours The price range of a stock during extended-hours trading can provide traders with insight into its support and resistance levels during regular hours, as well as potential breakouts or breakdowns. Changes in prices and trading volumes during these hours can foreshadow broader market movements throughout the day. 3. Access to longer trading hours Extended-hours trading allows investors to place trades immediately to manage their positions without for the market to open. This offers greater flexibility and convenience, as the trading window is longer. Traders restricted to regular trading hours may have to limit their strategies accordingly. Monitoring extended-hour activity also aids in risk management and informed trade positioning. Engaging in extended-market trading can offer opportunities for a timely entry or exit, giving investors a potential edge when the regular market resumes. Risks in Extended-Market trading 1. Lower Liquidity and Wider Spreads In extended hours trading, there are usually fewer buy and sell orders compared to regular market hours. This lower activity makes it difficult to buy or sell at your desired price. Your order may only be partially filled, or not filled at all. Fewer trades and higher volatility can also cause wider bid-ask spreads and larger price gaps between buyers and sellers. 2. Risk of Higher Volatility Prices can move more sharply during extended hours than during the regular session. This increased volatility means your order might not be fully executed, or it may be completed at a less favourable price. 3. Risk of Unlinked Markets Different extended-hours trading systems may display varying prices for the same security. Because these systems are not always interconnected, you might receive a less competitive price on one platform compared to another. 4. Risk of News Announcements Important company or market news is often released outside regular trading hours. Such announcements can cause sudden and sharp price movements during extended sessions, making it harder to trade at expected prices. What are the differences between extended-market and regular trading? Characteristics Extended Hours Regular Liquidity and volume Low High Bid-ask spread Wide Narrow Susceptible to higher or lower price gaps (refer to chart A above) Yes Generally no Price movements Prices are determined by a smaller group of investors, which may be heavily influenced by market news. (e.g. earnings release) Proper supply and demand dynamics determine price movements, ensuring orderly trading conditions. Market participants Predominantly institutional investors Both institutional and retail investors The table above captures the main differences between extended-market and regular trading sessions. Can I trade in the extended-hours market? How? Yes, you can! US extended-hours market prices on POEMS are available from 4:00 am to 9:30 am ET and 4:00 pm. to 8:00 pm. ET. You may refer to the table below to see the corresponding time in Singapore. Pre-market start time Pre-market end time Regular market start time Regular market end time Post-market start time Post-market end time US Eastern Standard Time (EST) 04:00 09:30 09:30 16:00 16:00 08:00 Singapore time (daylight saving) 16:00 21:30 21:30 04:00 04:00 08:00 Singapore time (non-daylight saving) 17:00 22:30 22:30 05:00 05:00 09:00 Extended-market orders can be placed starting from 4:00 am ET and remain valid until the close of the post-market session at 8:00 pm ET. Quotes for extended-market trading are only available during these hours. Any unfilled orders will automatically be carried forward into the next regular trading session. To begin trading in the extended market, click here. If you have any further questions, please visit our FAQ on US pre-market trading. Visit our website or contact our dedicated Night Desk team at globalnight@phillip.com.sg or (+65) 6531 1225. Start investing smarter with POEMS today — open an account and trade the US markets now! Open an Account Now! Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Should You Invest Your Supplementary Retirement Scheme (SRS) Savings?
Many individuals in Singapore can expect to spend an average of 2025 years in retirement. Over such an extended period, inflation may gradually reduce overall purchasing power. Therefore, it is essential to secure financial stability by ensuring there are sufficient savings to cover essential needs and living expenses during this period. Investing your SRS savings may be crucial for combating inflation and maximising your retirement savings. Aside from the average 0.05% bank interest earned on idle savings, SRS savings can be invested in various instruments, providing more opportunities to grow at a rate that may keep up with or even outpace inflation. What is the Supplementary Retirement Scheme (SRS)? The Supplementary Retirement Scheme (SRS) is a voluntary savings scheme introduced by the Singapore government to help individuals build a larger pool of retirement savings earlier in life. It provides an additional layer of savings to complement CPF, offering tax advantages and investment growth opportunities. Singapore Citizens/Permanent Residents can contribute up to a yearly maximum of S$15,300, and foreigners can contribute up to S$35,700. SRS Annual Contribution Limits Singaporeans/Permanent Residents S$15,300 Foreigners S$35,700 Individuals can make tax-free withdrawals from their SRS accounts of up to S$40,000 annually over a period of 10 years. The statutory retirement age is fixed when the first SRS contribution is made. Any subsequent change in the statutory retirement age will not affect an individual’s ability to withdraw. This ensures that the SRS withdrawal age remains consistent even if the official retirement age changes later. Why Should You Invest Your Supplementary Retirement Scheme (SRS) Savings? While SRS offers a baseline interest rate of 0.05%, there are a variety of investment options available through the scheme to make your money work harder for you. Through the SRS framework, your accumulated savings can be diversified across multiple asset classes and markets – including Unit Trusts, Stocks, ETFs, and many more. Additionally, gains from your SRS investments are not subject to tax while they remain in your account. By investing early, your SRS savings benefit from compounding, providing an additional stream of income to complement your CPF savings. In summary, SRS offers three benefits: tax relief on contributions, potential investment returns, and tax concessions on withdrawals, where only 50% of the withdrawn amount is subject to tax. How to Open an SRS Account? You can open an SRS account with any of the three local participating banks either online/in-person: DBS Group Holdings Ltd Overseas-Chinese Banking Corporation (OCBC) Ltd United Overseas Bank (UOB) Ltd Before opening an account, you will be required to confirm that you do not have an existing SRS account with another SRS operator before proceeding. *For foreigners: Please complete the Declaration Form for SRS (For Foreigners) to declare your foreigner status* Required Documents Document required for opening an SRS account: NRIC/FIN or Passport Who is eligible to open an SRS account? Singapore Citizens, Singapore Permanent Residents (SPRs) and foreigners who: Are at least 18 years of age; Are not an undischarged bankrupt; and Do not have a mental disorder and can manage themselves and their affairs; Do not already have an SRS account (including one that has been suspended) with the same or another operator; and Do not have a pending application with another SRS operator to open an SRS account; and Have not previously had an SRS account with the same or another SRS operator where all the funds had been withdrawn i) On medical grounds; or ii) On or after reaching the statutory retirement age prevailing at the time of your first contribution. SRS Investment Options: What Can You Invest in? SRS savings can be allocated across various investment vehicles – ranging from low-risk fixed deposits to higher risk options like stocks. This flexible approach enables individuals to align their investments with their goals and risk tolerance. Investment Options available for SRS Savings Unit Trusts REITs Stocks Singapore Government Securities ETFs Single Premium Insurance Products Fixed Deposits Low Volatility/Sustainable Options for SRS Investing with Phillip Capital Management (PCM) Investors looking for investment strategies designed to provide consistent returns and high liquidity may find the ‘Phillip Money Market Fund’ suitable as a low-risk option. Investors with higher risk tolerance who are interested in companies engaging in sustainable practices can look into funds such as the ‘Sustainable Reserve Fund’. 1. Phillip Money Market Fund The Phillip Money Market Fund aims to provide a high level of liquidity while delivering returns comparable to those of Singapore dollar savings deposits. The Sub-Fund invests primarily in short-term, high-quality money market instruments and debt securities. Through strategic diversification, it enables the fund to optimise yield without compromising flexibility. https://www.poems.com.sg/fund-finder/phillip-money-market-fund-534010/ 2. Sustainable Reserve Fund The Sustainable Reserve Fund is a diversified, short duration bond fund that aims to achieve income yield enhancement over the 6-month Singapore Overnight Rate Average (SORA). Guided by its proprietary ESG-integrated investment framework, the fund employs an inclusionary, sustainability-focused selection process—investing at least 70% of assets in issuers committed to taking appropriate actions that contribute to a green economy. The Sub-fund primarily invests all its assets in global fixed-income instruments (including short-term interest-bearing debt instruments and bonds), money market instruments and bank deposits (including fixed deposits). Structured as a short-duration bond fund, it achieves robust diversification across issuers, with no specific sectoral emphasis. Find out more here: https://www.poems.com.sg/fund-finder/sustainable-reserve-fund-a-sgd-dis-sgxz21949797-534202/ https://www.poems.com.sg/fund-finder/sustainable-reserve-fund-a-sgd-acc-sgxz39183199-534201/ Limited Time Reward Enhance the growth potential of your SRS savings with Phillip Capital Management! From now till 31st December 2025, Receive S$10 worth of PMMF BONUS UNITS for every S$10,000 invested in eligible funds using SRS – Plus, enjoy additional rewards when subscribing with a Regular Savings Plan (RSP) during the promotion period.Find out more: https://tinyurl.com/mt4nb2k5*T&Cs apply Conclusion The Supplementary Retirement Scheme (SRS) is more than just a tax-deferral tool. Investing your SRS savings can serve as a powerful strategy to counter inflation in the long run. Ultimately, it plays a strategic role, amplifying the growth potential of your retirement nest egg while preserving its value. FAQs about Supplementary Retirement Scheme How do I start investing using my SRS Savings on POEMS? Open an SRS account with any of the three participating banks stated above. Link your SRS Account to your trading account via POEMS 2.0 or POEMS Mobile 3 App: Log in to POEMS 2.0 > My Settings > My Account > Bank A/C information > Select ‘SRS’ tab > Fill up the required information Log in to POEMS Mobile 3 App > ‘Me’ Tab > Bank A/C Information > Select the pen icon on the top right-hand corner > Select ‘SRS’ and fill up the required information Filter investment type to ‘SRSIA’ to search for funds. I’m new to SRS investing. What’s a good way to get started? If you’re investing for the first time, start with beginner-friendly options: Unit Trusts – offering diversified portfolios to mitigate investment risks. SMART Portfolio - a discretionary investment service that matches a best-fit portfolio based on your online risk analysis. What happens to my SRS savings when I reach the retirement withdrawal age? You may make penalty-free withdrawals spread over 10 years (starting from the date of your first penalty-free withdrawal) on or after the statutory retirement age that was prevailing at the time of your first SRS contribution. 50% of the withdrawal sum from your SRS account is subject to tax and will be taxed at the rate applicable to you. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. 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