CPF has released a report by Lipper on the performance of unit trusts under the CPF Investment Scheme (CPFIS) for the half year ending June 2009.
This simplified report talks about the benefits of long term investing and the power of compounding, as well as provides tables comparing the returns, risk and expense ratio of the various funds.
Read report here: CPFIS 2Q2009
There’s also a scatter plot measuring the risk against return ratio of the funds, segregating funds based on whether their returns outperform or underperform the industry average given their volatility (risk).
Given that most equity markets have performed badly in the past year, you can see that most of the funds in the best quadrant (highlighted as giving an above-average return and lower-average risk) are fixed income funds.
Selecting funds based on this criteria would be a mistake as you might end up with an asset allocation that does not fit you. In fact, if you select funds solely from the best quadrant, you will end up with a 100% fixed income portfolio.
Instead, an asset allocation plan should be drawn up based on your risk profile and investment horizon. The tables can then be used as an aid to help you select funds from the respective asset class.