Singapore equity funds draw record $2.2b as bank dividends bolster local market
New reports point to renewed demand for Singapore equities alongside growth in dividends.
Singapore equity funds attracted a record $2.2 billion in inflows during the third quarter of 2026, marking a significant increase from previous quarters. This surge in fund investments coincides with higher dividend payouts from local companies, according to data from Morningstar, an investment research firm. Morningstar's findings, released on November 4, revealed that Singapore-focused equity funds saw more than double the inflows of the previous quarter, and nearly five times the $450 million recorded a year earlier.
Capital Group's Dividend Watch report also confirmed that Singapore companies paid a total of US$7.6 billion in dividends during the quarter, reflecting a 2.5% increase compared to the previous year. Underlying dividend growth for Singapore companies stood at 9.6%, surpassing the global average of 7.5%, which was driven predominantly by banks such as DBS and OCBC.
DBS' record fee income, coupled with robust wealth management activity and expanding customer engagement, helped offset weaker margins and enabled the bank to continue returning surplus capital to shareholders. OCBC benefited from record non-interest income and strong revenue streams from wealth management and trading. Morningstar attributed the renewed interest in Singapore equities to the market's strong performance and the efforts under the Equity Market Development Programme (EQDP) aimed at revitalizing the local stock market.
The popularity of Singapore equity funds is growing as investors recognize the strong local market performance, making them increasingly appealing beyond traditional risk-on periods. Singapore equities have experienced positive inflows consistently since the fourth quarter of 2024, with the EQDP measures and market performance contributing to their resurgence.
LionGlobal Singapore Trust recorded the highest inflows, totaling around $1.05 billion, followed by Amova Singapore Dividend Equity Fund, which attracted about $530 million. Amova Singapore STI ETF also saw an inflow of $280 million. Allocation funds, which invest in a mix of assets, saw the largest quarterly inflow at $2.45 billion, reflecting the strong appetite for equities.
However, this influx of capital into equities was accompanied by a withdrawal of funds from fixed-income investments, with a net outflow of $1.04 billion recorded during the quarter. This marks the third consecutive quarter of fixed-income withdrawals, marking a shift from the $3.36 billion attracted in the same period of 2025. The PIMCO GIS Income Fund, typically a leading fixed income asset gatherer, recorded a second consecutive quarter of withdrawals, with investors pulling out approximately $790 million.
Rising bond yields, as a result of higher interest rates on new bonds making existing bonds less attractive, have weighed on fixed-income fund returns, pushing down their prices.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
