University education costs continue to rise, making early planning increasingly important for parents.
Instead of relying solely on savings accounts, which may struggle to keep pace with tuition inflation, some investors choose to build education funds through long-term stock investing.
With a time horizon of 10 to 20 years, compounding can become a powerful ally in reaching these financial milestones.
When selecting stocks for such a critical goal, the objective is not maximum short-term returns or chasing the latest market fad.
Instead, ideal stocks should offer long-term growth potential, strong balance sheets, and durable business models that can generate consistent cash.
The key is to find a balance between growth and stability, ensuring the capital is preserved while it grows.
Here are three stocks I’d consider for building a child’s future university fund.
Singapore Exchange Limited (SGX: S68): The Market Toll-Booth
As Singapore’s sole stock market operator, SGX occupies a unique, vertically integrated position that makes it a natural anchor for a long-term portfolio.
It provides essential infrastructure for listing, trading, and clearing across equities, currencies, and derivatives.
In the first half of its fiscal year ending 30 June 2026 (1HFY2026), the group reported a 7.6% year-on-year (YoY) increase in net revenue to S$695.4 million.
This growth was driven by a nearly 20% rise in securities daily average traded value and strong performance in its currencies and commodities division.
While its net profit was broadly flat at S$342.7 million due to a one-off impairment, adjusted net profit actually rose 11.6% to S$357.1 million.
Crucially for parents, SGX is a strong cash generator, producing S$363.7 million in operating cash flow during the half-year.
It has also demonstrated a clear commitment to rewarding shareholders; the group declared an interim dividend of S$0.110, with management aiming to maintain a 0.25 cent quarterly dividend increase through the end of FY2028.
This level of predictability is invaluable when planning for expenses a decade or more away.
CapitaLand Integrated Commercial Trust (SGX: C38U): The Income Generator
For the defensive portion of the fund, I look toward one of Singapore’s largest REITs.
CapitaLand Integrated Commercial Trust, or CICT, owns a high-quality portfolio of retail and office properties across Singapore, Australia, and Germany.
Its presence in our daily lives – through malls like Plaza Singapura and ION Orchard – provides a level of tangible stability.
For the first quarter of 2026 (1Q2026), CICT reported gross revenue of S$426.7 million, up 8% YoY.
Net property income (NPI) rose 7.9% to S$314.4 million, supported by healthy rental reversions of 4.4% for retail and 6.1% for its office properties.
Despite a slight dip in occupancy to 95.2%, the REIT remains active in refreshing its portfolio, including a proposed acquisition of the Paragon mall and a S$160 million enhancement initiative at Plaza Singapura.
Including a REIT like CICT adds a steady stream of passive income to the fund through its distributions.
For a parent, this provides the flexibility to either reinvest the payouts to buy more units or eventually use the cash to pay for semesters of study.
iFAST Corporation Limited (SGX: AIY): The Growth Engine
To complement the stable anchors, I would consider a wealth management fintech like iFAST.
Operating across Singapore, Hong Kong, and the UK, iFAST is currently in a high-growth phase as it scales its digital platform and global bank.
The company delivered a surge in performance for 1Q2026, with revenue climbing 44.5% to S$154.5 million and net profit jumping 47.3% to S$28 million.
Assets under administration (AUA) hit a record S$32.6 billion, fuelled by strong inflows into its wealth management platform and ePension business in Hong Kong.
What makes iFAST particularly interesting for an education fund is its balance of growth and financial health.
It maintains a healthy net cash position of S$384.4 million.
It has also significantly raised its dividend payout, declaring an interim dividend of S$0.0250 – up over 50% from the previous year.
While its free cash flow recently dipped due to timing effects at its digital bank, management expects healthy growth in both revenue and profitability for the full year.
Why Time is a Parent’s Best Friend
The biggest advantage we have as parents is a long investment horizon.
This long runway allows us to ignore short-term market volatility and focus on the power of compounding.
When dividends from companies like SGX or CICT are reinvested back into the fund, they can significantly accelerate growth over the years.
Consistency often matters more than trying to pick the “perfect” stock.
Small, regular contributions – known as dollar-cost averaging – reduce the risk of timing the market poorly and ensure the fund grows steadily.
Be careful to avoid common pitfalls, such as chasing speculative trends or waiting too long to start.
By focusing on quality businesses with durable earnings and disciplined management, we can give our children a meaningful financial head start.
Get Smart: Think Decades, Not Days
Investing for a child’s university fund is ultimately about giving compounding the time it needs to work its magic.
By selecting quality businesses like these and staying the course, we can move steadily toward our goals, ensuring the funds are there when they are needed most.
The earlier we begin, the more powerful the results will be.
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Disclosure: Calvina L. owns shares of SGX and CICT.
