Singapore is a popular destination for real estate investment trusts (REITs) seeking to be listed on the exchange and for good reasons. REITs offer an easy and fuss-free way for investors to invest in properties without having to fork out a large sum of capital or having to shoulder the responsibilities of a landlord.
With more than 40 REITs and property trusts in Singapore, investors may prefer to take a diversified, hands-off approach towards investing in REITs. This is where REITs ETFs come into play. As the name suggests, REIT ETFs allow investors to invest in a portfolio of different REITs through a single ETF investment.
In this week’s edition of 4 Stocks This Week, we look at 4 REITs ETFs on the SGX.
Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYJ/BYI)
The Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYJ/BYI) is the first REIT ETF to be listed on SGX in 2016. It’s listed in both SGD (BYJ) and USD (BYI) and tracks the performance of the iEdge APAC Ex-Japan Dividend Leader REIT Index.
One interesting thing to note is that despite being listed on SGX, the Phillip SGX APAC Dividend Leaders REIT ETF has about 52% of its portfolio in Australia, with 34% in Singapore and about 11% in Hong Kong.
Since being listed, annual returns inclusive of dividends being reinvested are at 5.62% (assuming SGD). Based on its latest fact sheet, the dividend yield is currently about 4.22%.
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA/COI)
Listed in 2017, the NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA/COI) is the second REIT ETF to be listed on the SGX. It’s also traded in both the SGD (CFA) and the USD (COI).
The ETF tracks the performance of the FTSE EPRA Nareit Asia Ex Japan, which is an index that offers components that are largely Singapore and Hong Kong REITs. A look at the top 10 holdings of the ETF would show some familiar names.
Since its listing, annual returns assuming dividends are being re-invested are at 6.17%.
Lion-Phillip S-REIT ETF (SGX: CLR)
Launched in October 2017, the Lion Phillip S-REIT ETF (SGX: CLR) tracks the performance of the Morningstar Singapore REIT Yield Focus Index. In total, it consists of 27 REITs all of which are listed on SGX. This fund is designed to screen for high-yielding Singapore REITs with superior quality and financial health.
In its 3Q2021 newsletter report, the ETF manager shared that the dividend yield from the fund is at about 4.36% p.a.
CSOP iEdge S-REIT Leaders Index ETF (SRT/SRU)
The latest REIT ETF to be listed on SGX, the CSOP iEdge S-REIT Leaders Index ETF (SRT/SRU) is available for trading in both SGD (SRT) and USD (SRU). As its name suggests, the ETF tracks the performance of iEdge S-REIT Leaders Index which means that the ETF consists of S-REITs.
The iEdge S-REIT Leaders Index consists of various notable names such as CapitaLand Integrated Commercial Trust (C38U, 10.3%) and Ascendas Real Estate Investment Trust (A17U, 10.1%). As of 31 October 2021, here are the top 10 largest constituents in the index.
While the ETF may be new, the index that it’s tracking – iEdge S-REIT Leaders Index – is not.
Based on historical data, we can see that its total return of the iEdge S-REIT Leaders Index over the past 5 years is at 9.50% (inclusive of dividends being reinvested). If we assume dividends are not reinvested, the returns would have been 4.31%.
The latest 12-month dividend yield is at 4.08% as of 31 October 2021.
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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.