CPF Investment Scheme – How to know whether you have made gains?

I wrote previously about tracking gains or losses on investments made using CPF Ordinary account under the CPF Investment Scheme (CPFIS).

I found out a way to know the dollar quantum of gains (or losses) made from CPFIS since Day 1 of using CPF money for investment. This was discovered as I was winding down my equity position and pulling back money into CPF Ordinary account (CPFOA).

A bit of background first. When you invest using CPFOA, both the capital investment amount and various fees and charges are deducted from your CPFOA balance. If you sell your investment, the sale amount net of fees and charges are returned to CPFOA balance. If you receive dividends and capital distributions from your investments, these are also returned to CPFOA balance. What remains invested is shown in your agent bank statement showing your investment portfolio as cost of investment.

Now for information on how much you have made on investments using CPFOA amount. You can access your CPF statement using on-line CPF webpage. Go to “My Statement” and scroll down the screen until you see “Net Amount Used” for investments using Ordinary Account.

This “Net Amount Used” is amount you have withdrawn for CPFIS investments less refund from sale or maturity of your investments and dividends, etc. If it is a positive amount, it shows how much CPFOA amount you have used to-date. Compare this amount with your Agent bank statement balance of your investment portfolio.

Take an example:

“Net Amount used” (CPF webpage) = $2,200
Cost of investment portfolio (Agent bank statement) = $39,800
The difference $37,600 is your paper gains made on using CPFOA. But bear in mind that as these investments (shown in your agent bank statement) are not liquidated yet, the paper gains can be reduced if you sell them below costs.

Take another example:

“Net Amount used” is a negative amount. Negative amount usually means you have made profits because you have refunded more than the amount you have withdrawn. Whatever you have in your investment portfolio when they are sold will return back to your CPFOA and this will increase the negative amount further, which means more profits made.

You will be in happier position, if the “Net Amount used” figure is a negative balance. It means that you have pulled back ALL amount of CPFOA used in investments and more.

Copyright © 2012, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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