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Step-By-Step Guide To Investing Into STI ETF

Here is what you need to know before investing in the STI ETF.

 

The STI ETF refers to the Straits Times Index Exchange Traded Fund. If you have been a regular reader of Dollarsandsense.sg, you will know that this is one of the financial products that we believe the average Singaporean should consider investing in.

Read Also: Why Your First Stock Investment Should Be The STI ETF

In the Singapore Stock Exchange, we have an option of two fund managers for the STI ETF. They are the SPDR STI ETF, which is Singapore’s first locally created exchange traded fund, and the Nikko AM STI ETF.

The table below is a summary of some of the key points of both funds.

Nikko AM STI ETF SPDR STI ETF
Managed by Nikko Asset Management State Street Global Advisors
Lot size 100 100
Fund size

(As of 11/30/2015)

SGD 97.30 million

 

SGD 229,241.25 million

 

Fees 0.42%

 

Of the Net Asset Value NAV) per annum

0.30%

 

Of the Net Asset Value (NAV) per annum

Stock Code on SGX G3B ES3

 

There is also a very slight difference in the percentage of funds allocated to each sector:

Nikko AM STI ETF:

Nikkon Am

Source: http://www.nikkoam.com.sg/

SPDR STI ETF:

SPDR

Source: State Street Global Advisors

There are a few ways in which people can invest into the STI ETF. Each of these methods we mention below would be based on the investor preference and the amount of capital he or she has.

(1) Investing In STI ETF Through Any Brokerage Account

One way to invest in the STI ETF is to buy it using any brokerage account that gives you access to the SGX market. The brokerage fee differs for the various brokerage firms in the Singapore market.

Below is a table of some of the more commonly used brokerage firms in Singapore.

Brokerage firm Minimum fees Trading fees
DBS Vickers SGD 25 0.28%
Maybank Kim Eng SGD 25 0.275%
OCBC Securities SGD 25 0.275%
UOB Kay Hian SGD 25 0.275%
Standard Chartered SGD 0 0.20%

 

Trading fees percentage reduces when your contract amount exceeds SGD 50,000.

Do note that Standard Chartered holds your shares through a custodian account. That means shares bought using its brokerage account do not go into your individual Central Depository account (CDP)

(2) Invest Into STI ETF Using A Monthly Investment Plan

There are investors who may choose to invest into the STI ETF using this second method due to a few reasons.

  • Reduce the hassle of having to monitor the market closely to find a “ good” price to invest in.
  • Having limited capital and hence, a smaller amount of being invested each month would make more sense.
  • Lack in discipline when it comes to saving, and hence, a monthly-automated investment plan is a solution to help save up.

At a minimum investment of SGD 100 per month, investors can choose to invest regularly into the STE ETF. Some of the companies offering such monthly investment plans are OCBC bank offering the OCBC Blue Chip Investment Plan, POSB offering the Invest Saver, and Maybank Kim Eng with the Monthly Investment Plan.

Fees of each are as per the table below:

OCBC
Blue Chip Investment Plan
POSB

Invest Saver

Maybank Kim Eng
Monthly Investment Plan
Minimum investment sum SGD 100 SGD 100 SGD 100
Invested into Nikko AM STI ETF Nikko AM STI ETF SPDR STI ETF and

Nikko AM STI ETF

Buying fees 0.3%

or

SGD 5 per shares

(Whichever is higher)

1% 1%

(When amount invested is less than SGD 1,000)

Dividends Credited into respective bank account

 

Read Also: 4 ETFs Investors In Singapore Should Know About

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