Exchange-Traded Funds (ETFs) are funds that are traded on the exchange which aims to passively mimic the performance of the index or a sector that it they are tracking. It’s created and managed by fund managers and can be bought and sold on the stock exchange like a regular stock. Investing in an ETF is a less costly way to build a similar portfolio than to buy individual stocks.
In this week’s edition of 4 Stocks This Week, we look at some of the most popular ETFs on the Singapore Exchange for 1H2020.
SPDR Gold Shares ETF (SGX: O87)
If you wish to invest in gold without the hassle of having to buy, store and maintain physical gold, the SPDR Gold Shares ETF is a suitable way to get started. The aim of this ETF is for the shares to track the performance of Gold Bullion, less expense (0.40%).
Perhaps not surprisingly, given the stock market volatility this year, there has been a flight to safety for many investors who would turn to gold investing instead. This has led to an average monthly turnover of about $156.9 million for the SPDR Gold Shares ETF.
Year-to-date return for the ETF is at 16.2%. The ETF does not pay out any dividend since it only invests in gold.
SPDR STI ETF (SGX: ES3)
One of two indexes that tracks the Straits Times Index (STI), the SPDR STI ETF has been a popular index and a good first investment in Singapore if you are looking to get started on stock investing. Comprising of 30 of the largest and most liquid blue-chip companies listed on the Singapore Exchange (SGX), companies on the STI account for close to 80% of the total value of all listed on the SGX.
By investing in the SPDR STI ETF, you automatically invest in all 30 companies listed on the STI. The ETF tracks the performance of the STI with an expense ratio of 0.3%
For the 1H2020, the SPDR STI ETF was the second most traded ETF in Singapore, with an average monthly turnover of $145.4 million. Year-to-date return is at – 16.5%
Lion-Phillip S-REIT ETF (SGX: CLR)
The Lion-Phillip S-REIT ETF is one of three REITs ETFs listed on the SGX. It invests in high-quality Singapore REITs such as Capital Mall, Mapletree Commercial and Capitaland Commercial. In total, it invests in about 25 different REITs and trusts on the SGX.
With REITs prices showing a high level of volatility, especially during the March and April period due to the circuit breaker measures, it comes as no surprise that the ETF was more widely traded in 1H2020. On average, the monthly trading turnover was $19.4 million.
Year-to-date return for the REITs is at – 6.8%. It has an expense ratio of 0.6%.
Lyxor China Enterprise (HSCEI) UCITS ETF (SGX: P58)
A popular ETF for those who wish to have exposure to China, the HSCEI UCITS ETF tracks the performance of the Hang Seng China Enterprise Index. The index serves as a benchmark to the performance of Mainland securities that are listed in Hong Kong. These include companies such as Tencent, China Construction Bank (CCB), Ping An, ICBC and China Mobile. In total, there are about 50 companies within this index.
With an expense ratio of 0.7%, the ETF is an excellent way for Singapore investors to get started on investing in China companies. Year-to-date return for the ETF is at -7.9%. Average monthly turnover for the ETF is $19.3 million.
If you are keen to find out more about the most traded ETFs in 2020, you can refer to SGX market update report here.
Find The Best ETFs On FSMOne.com
Choosing the right ETF is crucial to your investment success. Distilled from over 2,000 ETFs available on FSMOne.com, the 2020 edition of the ETF Focus List brings you the best in class ETFs that will help you invest globally and profitably. Click here to find out more!
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.