If you have been following world news since the start of the year, you might be forgiven for thinking that the global economy is facing uncertainty (US-China Trade War) and because of that, stock markets around the world wouldn’t be performing too well this year. You would be wrong.
Since the start of 2019, most major stock markets around the world have done well. Both the Nasdaq and S&P 500 have hit record highs while the FTSE 100 have climbed from 6,734 at the start of the year, to 7,549 as of 26 July, or an increase of about 12%. This is in spite of Boris Johnson being elected as the new Prime Minister of UK and Brexit just looming around the corner.
Closer to home, the Singapore Exchange (SGX) has also done well. The Straits Times Index (STI), which comprises of 30 of the strongest and most liquid stocks listed on the SGX, have climbed from 3,038 at the start of the year to 3,363 as of 26 July, an increase of about 10.7%.
Exchange Traded Funds (ETFs) in Singapore which tracks the performance of a basket of stocks have likewise performed well. In this week’s edition of 4 Stocks This Week, we look at 4 of the best performing ETFs on the SGX since the start of the year.
Xtrackers CSI300 Swap UCITS ETF 1D (SGX: KT4)
The CSI300 is an ETF (traded in USD) that tracks the performance of 300 companies which are listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. Its performance reflects that of China’s stock markets.
In spite of uncertainty in the US-China trade war, it appears that the general sentiments are that China continues to remain as one of the fastest growing major economy around the world and cannot be ignored.
Since the start of the year, the CSI300 has delivered a total return of 31.1%. It’s currently trading at US$10.20.
United SSE50 China ETF (SGX: JK8)
Offered by UOB Asset Management, the SSE50 is an alternative ETF for Singapore investors looking to gain exposure to China’s stock market. It’s traded in Singapore Dollar (SGD) so there is no need to be concerned about foreign exchange risk. The key difference between the SSE50 and the CSI300 is that it consist of 50 stocks on the Shanghai Stock Exchange, instead of 300.
Since the start of the year, the SSE50 has delivered a return of 24.1%.
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA/COI)
Offered in both SGD and USD, the Nikko Asia REIT ETF is an ETF that focuses largely on REITs in Singapore (70%) and Hong Kong, with some holdings also in Malaysia, China and Indonesia. Sector wise, it’s focused on Retail (35.5%), Industrial (25.2%) and Office (15.8%). This is a good ETF to consider if you want to look for REITs diversification across the region.
The ETF has delivered a return of 20.9% (SGD) and 21.3% (USD). It’s also worth noting that since its inception in 29 March 2017, it has delivered a total return of 16.34%.
Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYJ/BYI)
The first REIT ETF to be offered on the SGX, the Phillip SGX REIT ETF allows investors to invest in REITs across Asia Pacific (excluding Japan) with a special emphasis on REITs that pay the best dividends. Singapore investor may however want to take note that unlike the NikkoAM REIT ETF, a large part of the Phillip SGX REIT ETF portfolio is in Australia REITs so this means the REIT is heavily concentrated to the real estate sector in Australia.
Offered in both SGD and USD, the ETF has delivered a return of 19.9% (SGD) and 20.8% (USD) since the start of the year.
To conclude this article, it appears that both the China stock market and REITs have been performing well in 2019 thus far, as reflected by the ETFs that track the performances of these markets.
However, we must remember that ETFs are instruments whose value and performance are based on the assets that they are tracking. So before investing in any ETF, remember to find out and understand what are the underlying assets which the ETFs are tracking.
Read Also: 5 Types Of ETFs You Never Knew Existed
Can Your Investments Survive 2021 And Beyond?
While most of us have survived the year, how has your portfolio fared? The financial markets took us and our emotions on a wild roller coaster ride in 2020, leading to some poor decisions like panic selling or missing out on opportunities as fear and uncertainty held them back.
As we step into 2021 amidst a “New Normal”, join the FSM’s flagship event – “What and Where to Invest” held virtually from 9 to 26 January 2021. Be equipped with the right knowledge and skills that will help you invest globally and profitably.
Prepare yourself for the investing years ahead and register now for “What and Where to Invest” virtual conference!
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.