Retirement fund body considers allocating three percent of fresh inflows into alternative investment funds

The Employees' Provident Fund Organisation may allocate three percent of its fresh annual inflows into alternative investment funds as part of its asset diversification strategy. This potential shift introduces alternative asset classes into the conservative debt-heavy retirement corpus. Institutional retirement funds traditionally invest predominantly in sovereign debt and high-rated corporate bonds to guarantee safety for subscriber savings.

Introducing alternative investment funds permits exposure to unlisted equities, venture capital, and private equity markets to seek higher long-term yields. Fund managers and financial advisors should monitor official circulars regarding eligible fund categories and exposure caps. Keep track of portfolio performance disclosures released by the retirement body.

Bottom line: Greater exposure to alternative assets introduces nuanced market risks alongside potential yield enhancements for retirement savings.