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4 ETFs On SGX For Exposure To Different Markets: Nikko AM STI ETF (G3B); Nikko AM REITs ETF (CFA/COI); Lion-OCBC Hang Seng Tech Index ETF (HST/HSS); SPDR Gold Shares (O87)

ETFs are a convenient way to gain immediate investment exposure to various sectors and asset classes that we want to invest in, both within and outside of Singapore.


Whether you are a new or experienced investor, Exchange-traded funds (ETFs) are a great way to get investment exposure in the financial markets. A single investment into an ETF will allow you to gain exposure to multiple stocks that the ETFs invest in. This not only provides investors with immediate diversification in their portfolios, but it is also cost-efficient to build and manage their portfolios as most ETFs charge a total expense ratio of less than 1% per annum (p.a).

With more than 30 ETFs listed on the Singapore Exchange (SGX), Singapore investors have sufficient choices to invest in various markets through ETFs on SGX.

In this week’s edition of 4 Stocks This Week, we look at 4 ETFs on SGX that Singapore investors can invest in the gain exposure in different markets.

Read Also: Complete Guide To ETF investing in Singapore

Nikko AM STI ETF (SGX: G3B)

The Nikko AM STI ETF (SGX: G3B) is one of two ETFs on SGX (the other being the SPDR STI ETF (ES3)) that tracks the Straits Times Index, which is the benchmark index for the stock market performance in Singapore.

By investing in this ETF, you gain investment exposure to large Singapore companies such as our three local banks (DBS, OCBC, UOB), Singtel and Jardine Matheson. In fact, due to their large market capitalisation, these 5 companies comprise about 55% of the STI as of May 2021.

Source: Nikko AM

Since its launch in February 2009, the Nikko AM STI ETF has delivered an annualised return of 8.64%, with its past 3-year and 5-year annualised returns at 0.68% and 5.90% respectively. This assumes that all dividends are reinvested into the ETF.

Its dividend yield is currently at about 3.3%, making the ETF a possible option for income-seeking investors. Expense fees are kept relatively low at just 0.3% p.a.

Read Also: SPDR STI ETF VS Nikko AM Singapore STI ETF: What’s The Difference Between These 2 Straits Times Index ETFs Listed On The SGX?

Nikko AM-Straits Trading Asia Ex Japan REIT ETF (SGX: CFA/COI)

The second of the two Nikko AM ETFs in our article today, the Nikko AM REITs ETF (SGX: CFA/COI) is an ideal option for dividend-seeking investors in Singapore who want to gain exposure to Singapore REITs. It’s also one of three REITs ETFs on SGX.

Available in both SGD (SGX: CFA) and USD (SGX: COI), the ETF invests in various real estate investment trusts (REITs) across both Singapore and the region. The bulk of its holding is based in Singapore with companies such as Ascendas REITs (9.8%), Capitaland Integrated Commercial Trust (9.6%), and the trio of Mapletree Logistics (7.7%), Industrial (6.8%) and Commercial (6.2%) trusts.

Besides Singapore, the ETF also has exposure to overseas REITs such as the ones found in Hong Kong, Malaysia and India.

Source: Nikko AM

Since it was launched in March 2017, annualised return for the ETF inclusive of dividends being reinvested is 6.90% p.a. the 1-year annualised return for the ETF is at 6.49% p.a, which may come as a surprise to some who expected that REITs might have performed poorly over the past year due to the impact of COVID-19.

Its dividend yield is currently at 3.91% for investors with expense fees at 0.6% p.a.

If you are keen to find out more about the NikkoAM ETFs, join us online on 15 July, 12pm – 1.30pm as we discuss on Facebook Live how ETFs can help Singapore investors achieve their investment goals in the COVID-19 world that we find ourselves in.

There will also be a panel discussion on whether Singapore Is Still Be A Great Market For Dividend Investors? The event will be shown on Facebook Live. You can indicate your interest to attend this event here.

Lion-OCBC Hang Seng Tech Index ETF (SGX: HST/HSS)

Launched in December 2020, the Lion-OCBC Hang Seng Tech Index ETF (HST/HSS) tracks the Hang Seng TECH Index’s performance, which comprises the 30 largest technology-related companies listed on the Stock Exchange of Hong Kong. These include tech-related companies like Alibaba, Tencent, Meituan, Xiaomi and JD.com. This is also the first technology-based ETF on the SGX.

Source

For investors who want investment exposure to the leading technology companies in China and Hong Kong, the Lion-OCBC Hang Seng Tech Index ETF is an easy way to gain access to these leading technology companies.

Available in SGD (SGX: HST) and USD (SGX: HSS), the ETF has generated a return of 3.1% since it was launched about 6 months ago and has a total expense ratio of 0.68%. You can read our review on 5 things you need to know about this ETF before investing in it.

To find out more about how you can invest in China as a Singapore-based investor, join us on Facebook Live on 17 July 2021 (Saturday) from 12pm to 1.30pm, as we discuss topics including How Long More Can The Chinese Growth Story Continue and whether a Chinese-Listed Company Could Be The Biggest Company In The World One Day.

SPDR Gold Shares (SGX: O87)

The only commodity ETF on the SGX, the SPDR Gold Share ETF (SGX: O87) is a suitable ETF for investors to consider if they wish to invest in gold, without wanting the hassle of needing to buy, store and maintain physical gold. It’s different from the other ETFs as it doesn’t invest in any stocks or bonds. Rather, the ETF invests in Gold Bullion and its performance, is thus, tied to gold prices.

Over the past 10 years, annualised performance has been at 1.74% p.a. However, over a shorter period of 3-year and 5-year, annualised returns are much higher at 12.87% and 8.97% p.a. Performance of the ETF is essentially tied to gold prices.

The ETF pays no dividends and has an expense of 0.40% p.a.

Read Also: Want To Buy Gold? 5 Ways Investors In Singapore Can Invest In And Gain Exposure To Gold As An Asset Class

Investing In ETFs On SGX

If you want to learn more about investing in ETFs in the COVID-19 world that we live in, DollarsAndSense is co-organising with SGX a 3-day ETF symposium, from 15 July to 17 July, 12pm to 1.30pm daily. In this event, we will also discuss some of the ETFs on SGX, including some of the ETFs mentioned in today’s article.

Over the three days, join us as we bring you 11 keynote speakers and panelists from the financial industry. The symposium will cover three themes:

  • Day 1, 15 July: Income Investing and Dividends;
  • Day 2, 16 July: Multi-Asset Portfolio and Asset Allocation;
  • Day 3, 17 July: Investing in China

The key speakers include DollarsAndSense’s very own founders, Timothy Ho and Dinesh Dayani as well as Adam Wong (Editor-In-Chief, The Fifth Person), (Goh Tee Leng, Fund Manager, Heritage Global Fund, and blogger of InvestingNook), Jermyn Wong (Head of Asia ETF Business Development, Nikko Asset Management Group), Geoff Howie (Market Strategist, SGX), and more.

Check out our Facebook event page for more details on the keynote speeches, speaker sharing and panel discussions. If you have any burning questions, send them to our Pigeonhole and we will do our best to respond to all of them during the event.

You can indicate your interest to attend this event here on Facebook.

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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.