Singapore's Disclosure Grade Drops to ‘Below Average’

The latest chapter of Morningstar's sixth Global Investor Experience study gives the market a lower grade because it doesn't require full holdings disclosure

Ruth Saldanha 15.12.2020
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Light Through Trees

The latest chapter of Morningstar's sixth Global Investor Experience study found that Singapore investors now experience a below-average disclosure environment.

Earlier today, Morningstar published the third and final chapter of its sixth biennial GIE report. This chapter covers Disclosure, grading the experiences of mutual fund investors in 26 markets on a five-tier scale: Top, Above Average, Average, Below Average, and Bottom. Previous chapters were on Fees and Expenses and Regulation and Taxation.

From Morningstar's perspective, the best regulatory approach is rooted in greater transparency. "In the long run, mutual fund industry stakeholders that fight transparency are likely to generate outcomes that are bad for investors and bad for the industry itself. Hence, we are pleased with the incremental improvements most markets have made in improving disclosure practices since our previous study," the report's authors note.

First, here’s a look at how countries scored:

Country Score

The United States and India earned Top grades, with six markets—Canada, Korea, South Africa, Sweden Taiwan, and Thailand—getting Above Average grades. While most markets occupy roughly similar positions as in the 2017 survey, France and the Netherlands took jumps upward, benefiting from incremental improvements across EU markets, and South Africa’s grade also improved.

As in previous years, Australia was awarded the lowest grade. In this edition of the study, Australia stands alone as having clearly the feeblest disclosure regime among the 26 markets in this study. As an otherwise sophisticated market, it is remarkable that Australia remains the only one with no implemented portfolio holdings disclosure regime.

Global Key Findings
The report finds that most markets around the world have incrementally improved the environment for mutual fund inves­tors through better disclosure practices. Ideally, complete portfolio holdings are publicly available from a central website (such as an industry association or a regulator). Pleasingly, nine markets in this study have this in place.

Worldwide, the authors note, much environmental, social, and governance regulation is in the pipeline that should provide more-standardised disclosure to inform investors' understanding and comparison of products. "This should help prevent greenwashing—or using ESG claims in fund marketing without ESG princi­ples truly guiding investment decisions—from being a significant issue for investors," the report notes. "In Europe, which is the region with the most ESG investment regulatory innovation, Sweden is the leader in ESG disclo­sures, given its granular regulatory requirements. Outside of Europe, the list of green funds disclosed on the Hong Kong regulator website is an example of a simple yet impactful initiative that helps investors more easily identify funds that meet stated ESG requirements."

Driven by a lack of required full holdings disclosure, Singapore's Disclosure grade fell to Below Average.

"Singapore's simplified prospectus receives credit for clearly outlining a fund's strategy and investment risks and for requiring standardised returns, but it does not require the disclosure of manager names and lacks a monetary illustration of fees," the report finds.

However, Singapore has made some improvements to its disclosure requirements since the 2017 study.

According to the report, "the Monetary Authority of Singapore, or MAS, took steps to standardise the disclosure format of trailer fees, as financial advisers must now disclose the amount of trailer fees they receive from asset managers. Moreover, the MAS has highlighted good disclosure practices to help investors determine whether higher fees associated with actively managed funds are justified. Room for improvement remains in other areas, such as portfolio holdings disclosure, where only the top 10 holdings are required instead of all positions. While Singapore has plans to enhance its environmental, social, and governance disclosure practices in the next two years, its efforts to date lag other markets in Asia, namely Hong Kong."

Morningstar launched the Global Investor Experience study in 2009 to encourage a dialogue about global best practices for mutual funds from the perspective of fund shareholders.




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Ruth Saldanha

Ruth Saldanha  is Senior Editor at

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