CPF-Investment Scheme – My Experience

image credit to todayonline.com.sg

CPF-IS has been hot and never-ending topic since DPM Tharman made a comment in 2016 that “the scheme was not fit for purpose “ because over the last 10 years, more than 80 per cent of those who invested through the scheme would have been better off leaving their money in the CPF Ordinary Account.

He said that over the last 10 years, more than 80 per cent of those who invested through the scheme would have been better off leaving their money in the CPF Ordinary Account since the Ordinary account still gives the member a 2.5% interest.

Since the announcement of the review in 2016, the CPF Advisory Panel yet to come out with the recommendation of the revamp of the scheme, but as indicated by DPM, it will be “ a simple, aggregated, low-cost investment option, which is something that the Government is going to study very carefully

Below are some of the links and good articles on how to investing using CPF-IS and pro and cons given by local financial portal and bloggers.

 Investing with Your CPF Savings: A Quick Guide to Get Started ( From Seedly)

Why Investing Your CPF Money Is A Bad Idea  and CPFIS: 5 Reasons Why You Should Not Rush To Invest Your CPF Monies    ( From Dollars & Sense )

3 Awful Consequences of Trying to Invest Your CPF Money ( From singsaver.com.sg)

Since more than 80% of those invested through the scheme would have better leaving their money in CPF account, it is wise that most of the financial portal and bloggers or adviser tend to remind us of the RISK of using our CPF money to invest. Obviously , most of us also using CPF money to serve our housing loan hence is more critical that we access our risk tolerance and the need for the money for retirement ( especially when we have a short time frame for such investment horizon )  before we commit any money under CPF-IS.

CPF-IS: My Experience

Not many CPF member will have such acute investment knowledge and know-how as Uncle CW8888 who have made more than $303 K under CPF-IS ( Link here ). I only managed to make $39 k ( including dividend and unrealized P&L ) with XIRR of 12.2% since 2009. (please refer to below Appendix A ).

Of course other then picking up the right stocks and staying longer in the market to enjoy the impact of “compounding effect “, one may need to ensure the margin of safety in entering the market at the right time. This is simply because we don’t have the luxury of doing the “dollar-cost averaging “ down with our limited fund in CPF balance as compared to our cash account.

I would elaborate further base on my recent experience in investing in Keppel Corp and SembCorp Ind since Jul 2014 by using CPF money. No doubt I have caught the falling knife when entering the O&G sectors in 2014 by hoping to have a quick return in anticipating fast rebound of oil price.

My XIRR on CPF _IS would increase to 23.8% ( Appendix B ) if I have excluded the Keppel Corp and SembCorp Ind in my analysis this is because the return has been dragged down by poor return on investment in these two O&G counters which is slightly negative with XIRR of -0.04% ( Appendix C).

The point I try to highlight here is not good or bad in investing in these two O&G counters, but as mentioned, we simply don’t have the luxury to do the “dollar cost average down “ even if we think that the stocks invested still have chance to rebound in future as you may see that my XIRR of Keppel and SembCorp Ind is around 4.12 % as of closing on 13 Oct in my cash account. ( Appendix D) after doing some dollar-cost averaging when the price dropped further. This is the key drawback in using your CPF money to invest, of course, the averaging down of wrong or speculative stocks will also end up in disaster.  

Lesson learned: Make sure that we have enough “margin of safety “ in entering the market by using CPF money to invest ( the best timing would be during a crisis , eg. Asian Financial Crisis in 1997, Dot Com / Tech Bubble 2000, SARs Epidemic 2003, GFC in 2008/09 etc ) where the market would have dropped by more than 20-50% ).

By hindsight and as usual, easier said than done, do we really dare to invest when the crisis hit? especially with money save for retirement under CPF….??  

Let's also see what the CPF Advisory Panel would bring to us and hope it would improve our overall ROI under new CPF IS, at least to reduce the figure of 80% !!

Cheers !!

Appendix A: TTL Return on CPF-IS (including dividend and unrealized profit or loss )

Appendix B: TTL Return excluding Keppel Corp and SembCorp Ind 

Appendix C: XIRR of Keppel Corp and Semb Corp Ind ( under CPF IS )

Appendix D: XIRR of Keppel Corp and SembCorp Ind ( under cash account)


  1. As most of CPF members will have much smaller CPFIS account size relatively to the growth rate of their cash war chest; so many of CPF members may have to think or re-think of their investing strategy - taking Sniper shoots nearer at historical market low may be better option. One shot. One kill!

    Collecting 2.5% compounding interests is worth the wait for GSS in the market.

    Some retail investors seriously need education from veterans as they are happily beating CPF OA 2.5% CAGR with their high single yield with their S-REITs investment strategy. OK. OK. Politically right! Happy can liao

    1. Hi Uncle CW8888,
      Yes, with limited resource under CPFIS acct , waiting for GSS will be the best option !!
      Cheers !! :-)


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