10 ETFs on Singapore Exchange You Didn’t Know About (2021)
The only constant in this world is change…and uncertainty.We don’t know what lies ahead and we can never be too sure.Many invest their money in unit funds, other use ILPs. But there are pros andcons to each investing vehicle.For the lazy investors who want to capture market returns without having tosieve through countless annual reports and studying businesses, the ExchangeTraded Fund (ETF) is a popular investing vehicle.You get to enjoy ease, flexibility, and liquidity while ensuring that yourinvestments grow steadily.The ETF Singapore offers are varied and keeps track of the performances ofcommodities, indexes assets, and bonds. These are listed and traded in theSingapore stock market and are all accessible through the Singapore StockExchange.Compared to other investment vehicles, the ETF is very similar to the commonstock.However, with ETFs, investors are subject to lower fees because of its passivemanagement mechanism. You do not need to spend hours picking individualstocks, instead you can invest in a broader market theme or asset.
10 Best ETFs In Singapore
ETFs provide investors with an easy, low-cost solution to investing.According to Statista, there were 7602 ETFs in the markets as of 2020. Thisnumber would have increased by the time you’re reading this.With so many options out there, where should you start?We list 10 Best ETFs in Singapore for your consideration:
2. Nikko AM Singapore STI ETF (G3B)
Nikko Asset Management offers its version of the STI ETF. Like its SPRDcounterpart, the Nikko AM Singapore STI aims to replicate the Strait TimesIndex that tracks the top ranking companies in Singapore. It helps youpurchase shares from blue chip companies in Singapore that are familiar to yougiving a sense of security.It was launched 7 years after the SPDR ETF, hence it is no surprise that theNikko AM STI ETF has a smaller Assets Under Management (AUM).It offers the same low expense ratio of just 0.30% per year and offers a lowertracking error of 0.17% at the point of writing. (Comparatively, SPDR STI ETFhas a tracking error of 0.29%).
3. ABF Singapore Bond Index Fund (A35)
The ABF Singapore Bond Index Fund is one of the biggest and earliest ETF onSingapore stock exchange. It gives investors exposure to bonds by investing inthe constituents of the iBoxx ABF Singapore Bond Index which tracks high-quality Singapore government bonds as well as bonds from quasi-Singaporegovernment entities like Temasek and HDB.Throughout the years it has been growing strong and steady, which makes itamong the most successful ones. It currently has an Assets Under Management(AUM) of S$983 million as of 31 Mar 2021.At first glance, like many of us, it is discouraging to purchase from this ETFespecially for the new players as the figures look very intimidating. But,because it is an established ETF, it is low cost and less risky, which isshown by its recorded success each year since it was created.
What Is the Average Singapore ETF Returns Like?
This varies widely depending on your portfolio of ETFs.SGX published a study on the 2020 year to date (YTD) performance of Singaporefocused ETFs. You can read the full report here. These are some of thehighlights for 2020: * Top three ETFs in terms of new inflows were SPDR STI ETF, Nikko AM STI ETF and Nikko AM SGF Investment Grade Corporate Bond ETF. * Top three best yielding ETFs were Lion Phillip S-REIT ETF (6%), SPDR STI ETF (4.7%) and Nikko AM STI ETF (4.6%).
7 popular ETFs in Singapore — have you heard of these?
Here are 7 popular generic ETFs in Singapore.ETF in Singapore|What it tracks|Expense ratio —|—|— SPDR STI ETF|Top 30 companies on SGX|0.3% Nikko AM STI ETF|Top 30 companies on SGX|0.3% ABF Singapore Bond Index Fund|Singapore govt + quasi-govt bonds|0.26% Phillip Sing Income ETF|High dividend stocks on SGX|≤0.7% Lion Phillip S-REIT ETF|High dividend Singapore REITs|0.6%? SPDR S&P 500 ETF|Top 500 on US stock market|0.09% SPDR Gold Shares ETF|Price of gold bullion|0.4% If you already know all there is to know about ETFs and index funds, feel freeto skip straight to the ETF section by clicking on the name of the ETF youlike.Otherwise, read on for some 101s on what on earth this whole ETF thing isabout.Back to top
ETF vs unit trust — which type of index fund is better?
Technically, ETFs are not the only way to track the entire market. Index fundsare also available in the form of unit trusts (sometimes called mutual funds).Unit trusts are professionally managed funds and typically cost a lot morethan ETFs. Not only do they require a higher initial investment, there arealso annual management and commission fees of up to 5% that eat into yourpotential profits. You can read more about unit trusts here.On the other hand, ETFs are passively managed. There may be a fund manager,but her job is pretty hands-off (apart from putting the different stockstogether to track the index).Therefore, ETF fees are usually lower than that of unit trusts. Most chargeless than 1%, and you’ll find a lot that are charging more like 0.3% or 0.5%.ETFs are also traded like normal stocks on SGX, so there’s nothing stoppingyou from buying just 1 lot of shares. You’re really only restricted by yourinvestment broker’s commission fees.Now that you know the basics of investing in ETFs — here are 7 well-known ETFsin Singapore to get you started.Back to top
3. ABF Singapore Bond Index Fund (SGX: A35)
Bonds have always been the uncool sibling to stocks, but it’s definitely anattractive type of asset for the risk-averse (and for those who seek a “safehaven” in a stock market crash).Plus, high-profile government / government-linked bonds like Singapore SavingsBonds, Temasek Holdings Bond and the Temasek-linked Astrea IV and V Bonds havewhetted Singaporeans’ appetite for bonds.Wouldn’t it be great if you could buy all those government-ish bonds all inone fell swoop, instead of having to camp at the ATM every time one comes out?The ABF Singapore Bond Index Fund lets you do that. It’s basically a “groupbuy” for a whole bunch of bonds issued by extremely credible entities: TheSingapore government and gov-linked entities like HDB, LTA and TemasekHoldings.While the returns may not exactly be jaw-dropping, you will get (pretty much)guaranteed bond coupon payouts.ABF Singapore Bond Index Fund expense ratio: 0.26%Back to top
How to start investing in ETFs in Singapore
Investing in ETFs is simple. Generally there are 2 options: Either investing alump sum, or using a regular savings plan.
Regular savings plan
A less heartache-inducing way to invest in ETFs is to opt for a regularsavings plan, which is basically a “subscription” to your investment ofchoice.You can break down that $10,000 lump sum into 10 parts, buying $1,000 worth ofSTI ETF shares every month. Some months will be more expensive and some monthscheaper, but the point is that you’ll be buying your ETF at the average priceover 10 months.Right now, there are 3 options: OCBC Blue Chip Investment Plan, DBS/POSBInvest-Saver, and POEMs Share Builders Plan. We’ve done a comparison of these3 RSPs here.The important things to check are (a) whether the programme has the ETFs youwant, and (b) how much the commission fees are. If the RSP fees turn out to betoo high, then you might be better off with the lump sum method.Back to top
The STI ETF Step-by-Step Guide – What Is It and How To Start InvestingUnit Trusts in Singapore – Things to Know Before You InvestDollar Cost Averaging: Definitions, Examples and the Pros and Cons forSingapore InvestmentsPOSB/DBS vs OCBC vs POEMS vs Maybank Kim Eng: Which Regular Savings PlanShould You Choose?The post Top 7 ETFs in Singapore — The Total Beginner’s Guide to Investing inETFs appeared first on the MoneySmart blog.MoneySmart.sg helps you maximize your money. Like us on Facebook to keep up todate with our latest news and articles.Compare and shop for the best deals on Loans, Insurance and Credit Cards onour site now! More From MoneySmart The 7 Best ETFs for Bear Markets & Recessions (Defensive) in 2021Bear markets, recessions, and market downturns are largely unpredictable bytheir very nature. Here we’ll look at the best defensive ETFs to weather thestorms and survive or even thrive during periods of market turmoil in 2021.Disclosure: Some of the links on this page are referral links. At noadditional cost to you, if you choose to make a purchase or sign up for aservice after clicking through those links, I may receive a small commission.This allows me to continue producing high-quality, ad-free content on thissite and pays for the occasional cup of coffee. I have first-hand experiencewith every product or service I recommend, and I recommend them because Igenuinely believe they are useful, not because of the commission I get if youdecide to purchase through my links. Read more here.
FUTY – Fidelity MSCI Utilities Index ETF
Demand for utilities like water and electricity stays relatively constantduring recessions and bear markets. These services are usually the lastexpense consumers cut. Consequently, utilities rarely experience drops inrevenues, and are thus considered defensive stocks. The sector is also popularfor providing consistent and high dividends.The Fidelity MSCI Utilities Index ETF (FUTY) seeks to track the MSCI USA IMIUtilities Index and has an expense ratio of 0.08%.
VDC – Vanguard Consumer Staples ETF
Similarly, demand for consumer staples – everyday products that people needlike dish soap, deodorant, toothpaste, food, beverages, etc. – is non-cyclicaland doesn’t change much during economic downturns, as consumers are unwillingor unable to stop buying these products. Thus, consumer staples stocks likeJohnson & Johnson and Procter & Gamble tend to weather storms well and areconsidered to be “defensive” stocks. These stocks also usually maintain aconsistent dividend payment during recessions and bear markets. Likeutilities, consumer staples have the added benefit of being lowly correlatedwith the broader market.The Vanguard Consumer Staples ETF (VDC) has over $6 billion in assets and over90 holdings across the U.S. consumer staples sector. The fund seeks to trackthe MSCI US Investable Market Consumer Staples 25/50 Index and has an expenseratio of 0.10%.
VIG – Vanguard Dividend Appreciation ETF
Dividend investors will likely already be familiar with this fund. TheVanguard Dividend Appreciation ETF (VIG) seeks to track the NASDAQ US DividendAchievers Select Index (formerly known as the Dividend Achievers SelectIndex). These are stocks with a history of at least 10 consecutive years of anincreasing dividend payment. That usually means large, stable, safe, cash-healthy companies that are more resilient during bear markets.These companies also tend to exhibit lower volatility than the broader market.While the yield per se may not be impressive to income investors, these high-quality companies offer the potential for growth and a growing dividendpayment. This ETF has an expense ratio of 0.06%.