From 18 November 2021, the CSOP iEdge S-REIT Leaders Index ETF (SGX: SRT/SRU) will be listed on the Singapore Exchange (SGX), giving Singapore investors yet another option to invest in a REITs ETF. This ETF will be available for trading in SGD and USD.
A quick background. The CSOP iEdge S-REIT Leaders Index ETF, as its name would already suggest, is an ETF that is designed to track the performance of the iEdge S-REIT Leaders Index. The iEdge S-REIT Leaders Index is a narrow, tradable, adjusted free-float market capitalisation weighted index that measures the performance of the most liquid real estate investment trusts in Singapore in SGD.
Before you think about investing in the CSOP iEdge S-REIT Leaders Index ETF, here are 4 things about the ETF that you should first know.
#1 Components of the iEdge S-REIT Leaders Index
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.
If you have started investing in S-REITs, most of these will be companies that you are likely familiar with already. If you are new to investing, then it might be good to do some research on your own on some of these companies within the index before you decide whether or not to invest in the ETF. In total, Currently, there are a total of 28 constituents that form the index with a total market capitalisation of about $69 billion.
The index is reviewed semi-annually in March and September, and the constituents will have their weights capped at 10% to ensure that no single company is able to dominate the index. This ensures that the index will be diversified.
#2 Investment Objectives Of The ETF
The main investment objective of CSOP iEdge S-REIT Leaders Index ETF is to replicate as closely as possible, before fees and expenses, the performance of the iEdge S-REIT Leaders Index. In other words, by investing in the CSOP iEdge S-REIT Leaders Index ETF, we will be investing in the index that it’s tracking.
Through a single ETF investment, the iEdge S-REIT Leaders Index ETF allows investors to have the opportunity to invest into a basket of Singapore REITs (S-REIT) that can potentially offer both long-term capital appreciation and regular income stream in the form of dividends.
Based on information stated on its prospectus, the ETF is only suitable for investors who 1) want capital growth and regular income, 2) seek an index-based approach to investing in a diversified basket of REITs listed on the SGX-ST in a cost-effective and easy to access manner, and 3) believe that the Index will increase in value over time.
#3 Historical Returns and Dividend Payouts Of CSOP iEdge S-REIT Leaders Index ETF
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.
#4 Management Fee For CSOP iEdge S-REIT Leaders Index ETF
Last but not least, the management fee for the CSOP iEdge S-REIT Leaders Index ETF will be 0.50% and will not be more than 0.80%. This is competitively priced to the S-REIT ETFs peers that are currently listed such as the Lion-Phillip REIT ETF which also has a management fee of 0.50% and the Phillip SGX APAC Dividend Leaders REIT ETF which has a management fee of 0.30%.
Read Also: Guide To REIT ETFs In Singapore
The ETF’s initial offering period (IOP) has started and will run till 15th November 2021, and investors who wish to make the purchase can do so through their brokerage firms. The ETF will be listed on 18 November 2021.
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