WE REFER to the letter 'Raise the CPF ceiling for investments in Reits' (ST, Nov 3). Mr Chan Wei Sen suggests that the Board considers allowing members to use 100 per cent of their Ordinary Account savings for investments in Reits.
Reits invest in a portfolio of income-generating properties or property-related assets and distribute the bulk of their net income, mainly from property rentals and sales, to their shareholders.
While they provide CPF members with a more liquid way of investing in real estate, the degree of diversification of Reits is more comparable to that of listed stocks than unit trusts or exchange-traded funds which invest in the securities of many companies.
Hence, the Board has imposed for property funds the same investment limit as stocks included in the CPF Investment Scheme.
We thank Mr Chan for his feedback.
Lo Tak Wah
Director (Retirement and Investment)
CPF Board
