Paul: The Singapore Fund has had only one champion year since its inception.
The year was 1993. SGF experienced some dilution through rights issued that year. The issuance, however, did nothing to restrain SGF's advance as the market-price spiked to ~ US$23.00/share near Christmas Day, just prior to going ex-dividend. That's back when the dividend was in the US$2.00 range. The shares split later in 1994. (I can not recall the arithmetic.) The Singapore Fund's performance hasn't been the same since. But, then, for various reasons neither has the region.
True that SGF's charter permits it to invest throughout SEAsia. Historically, SGF has dedicated 20% - 25% of its portfolio to the Malaysian market. (The latest figure I have is 17%.) That's been a hindrance of late.
Also, the extent of diversification in equity investments appears to have been critical where Singapore/Malaysia are concerned. Better for you and I over the past 1 1/2 years to just buy one of the best companies in the country (e.g. United Overseas Bank for a 20% return or Sime Darby for a 30% return). SGF is shackled by limits on foreign ownership. Many times the fund can not take as large a position as it would like, and is forced to diversify or hold cash.
So what can I say, Paul, but that SGF's market-price performance the past few years has been poor. Though, given the circumstances, I don't know that another manager would have done better. Is the fund a safe haven that will rebound as regional markets stabilise? Yes. When will the markets stabilise? There is no consensus, just hunches.
There are a number of structural changes being contemplated for the Singapore economy. Former chairman of the New York Federal Reserve, Gerald Corrigan, has been in Singapore to advise. Investors should be extremely careful. Some changes may be at the expense of foreign shareholders, or funds of foreign registry -- like SGF.
Hope that's of some assistance. |
