Funds that invest in Singapore stocks took in S$2.2 billion (about US$1.72 billion) in the three months to September, five times the S$450 million they drew a year earlier, according to Morningstar data reported this week. The figure was also double the second quarter's total.

For savers in Singapore, the numbers show a change in habits. Local investors have long kept most of their stock and bond money overseas and turned to the home market mainly in strong rallies. Morningstar senior analyst Arvind Subramanian said in an emailed statement that "this is starting to shift," crediting the Monetary Authority of Singapore's equity market development programme (EQDP) and the market's gains, Asia Asset Management reported on Friday.

Where the money went in Singapore funds

A single fund took nearly half of the quarter's equity inflows. LionGlobal Singapore Trust, run by Lion Global Investors, drew about S$1 billion. Amova Asset Management, the Japanese manager, collected about S$530 million in its Amova Singapore Dividend Equity Fund and S$280 million in the Amova Singapore STI ETF, which tracks the Straits Times Index.

Mixed-asset funds also gained. Allocation funds, which hold both stocks and bonds, took in S$2.45 billion in the third quarter, up from S$1.83 billion in the second and S$1.49 billion in the first, Morningstar said.

Bond funds went the other way. Rising yields hurt their returns, and they posted net outflows for a third straight quarter, losing S$1.04 billion in the July to September period. A year earlier they had attracted S$3.36 billion.

Trading activity rose with the flows. Turnover on the Singapore Exchange reached S$132 billion in the third quarter, almost a third more than a year earlier, according to the Morningstar figures cited by Asia Asset Management.

How the MAS EQDP feeds local funds

MAS and the Financial Sector Development Fund announced it in February 2025 with S$5 billion, to be placed with Singapore-based managers running actively managed strategies that invest fully or substantially in Singapore-listed shares. MAS said on its programme page that it prefers strategies tilted toward small and mid-sized companies and expects them to attract commercial investors alongside its seed money.

In February 2026 the central bank raised the programme to S$6.5 billion. At that point it had allocated S$3.95 billion to nine managers. A third batch of five managers, announced on Sept. 29, received S$1.45 billion, taking allocations to S$5.4 billion across 14 firms, according to a summary of the announcement by law firm Allen & Gledhill. MAS also committed S$20 million to a market-making grant covering about 80 small and mid-cap stocks and new listings, running until Dec. 31, 2028. A fourth batch of managers is under review and expected to be completed in 2027.

The design matters for retail investors. EQDP money goes to managers, not directly into shares, and the managers are expected to bring in outside capital. That is why public funds focused on Singapore have become a channel for both the policy and household savings.

What fund buyers should check

The Straits Times Index rose 10.6% in the third quarter and gained 23% from July 2025, when the first EQDP managers were named, to Nov. 4, 2026, Morningstar said. Much of that came from DBS, OCBC and United Overseas Bank, which make up about 58% of the 30-stock index.

That concentration is the main thing to understand before buying a Singapore fund. An STI tracker is, in large part, a bet on three lenders. Morningstar's Asia equity research director, Lorraine Tan, said in a Nov. 4 webinar that Singapore looks relatively overvalued because of bank share prices, and that DBS and OCBC "stand out as particularly stretched." She expects their interest income growth to slow as rates peak.

Investors comparing products can look at a few concrete points:

• Index fund or active fund. A passive STI fund mirrors the bank-heavy index. Active Singapore funds, including EQDP-backed strategies, may hold more small and mid-cap stocks, but they charge higher fees.
• Top holdings. A fund's factsheet lists its biggest positions. A fund with the three banks near the top of the list will move largely with them.
• Dividend focus. Dividend-labelled funds often lean on banks and REITs, so they can overlap heavily with an index fund.
• Where the rest of the portfolio sits. Investors who already own bank shares or hold deposits and money market funds at the same banks may add less diversification than they expect.

Morningstar's data cover flows, not returns after costs, and strong quarters for inflows have not always been followed by strong quarters for performance. Capital Times does not recommend any fund.

The next marker is the fourth EQDP batch, which MAS expects to finish in 2027, and Morningstar's fourth-quarter flow figures, which will show whether the shift from bond funds to local equities continued after the index's run to November.