Singapore continues to be a safe haven for investors amid US instability
Foreign investors are ramping up their shift toward Singapore as a financial safe haven, amid growing instability in U.S. assets and rising geopolitical uncertainty.
Singapore equities have delivered a 13% total return since the beginning of 2025, more than double the 6% gain recorded by the MSCI All Country World Index. This shows a wave of capital flowing into Singapore’s stable markets as U.S. policy volatility and legal uncertainty deepen.
Morgan Stanley analysts attribute the trend to recurring market rallies triggered by the so-called “Taco trade.” A term invented by Financial Times columnist Robert Armstrong, referring to “Trump always chickens out” on tariffs. Recent examples include President Trump walking back tariffs on Chinese and European imports, prompting sharp equity rebounds.
The pattern began in April, when Trump reversed a proposed tariff hike after market turmoil, and continued through May, including a 90-day delay on U.S.-China tariff decisions and a last-minute pause on 50% tariffs for European goods.
Still, market fatigue is growing. According to Bloomberg, the S&P 500’s sensitivity to tariff headlines has fallen from 80% in early April to just over 30% by late May. Meanwhile, Singapore remains an appealing destination, driven by its AAA credit rating from all three major agencies, a stark contrast to the U.S., which was downgraded by Moody’s on May 16.
The Singapore dollar has also proven resilient, rising 5.5% against the U.S. dollar this year. According to analysts, the Monetary Authority of Singapore (MAS)’s long-standing currency policy and substantial foreign reserves reinforce the Singapore dollar’s appeal as a store of value. On May 29, it traded at 1.287 to the greenback, close to its 10-year high.
Adding to Singapore’s safe haven image, the ultra-wealthy are increasingly storing physical gold in high-security vaults near Changi. The Reserve, one of the city-state’s most prominent precious metals facilities, reported an 88% rise in storage orders and a 200% increase in bar sales year-on-year, mostly from overseas clients.
Investors are also pulling away from traditional paper gold assets and the U.S. dollar, opting for physical bullion and currencies tied to more stable economies. The ongoing legal battle between the Trump administration and the U.S. Court of International Trade, over the legality of sweeping import tariffs, is adding to investor caution.
“Tariffs on Asia are likely to stay amid the legal battle,” said Michael Wan of MUFG Bank, warning that prolonged uncertainty could weigh on U.S. investment plans and economic growth.
