Connect with us

Investing

4 Dividend-Paying ETFs On SGX To Invest For Dividend Income: iShares Barclays USD Asia High Yield Bond Index ETF (O9P); Lion-Phillip S-REIT ETF (CLR); NikkoAM-StraitsTrading Asia ex Japan REIT ETF (CFA/COI); Phillip SING Income ETF (OVQ)

For income-seeking investors, ETFs are a good way to get your dividend income from multiple companies instead of just a few.


One of the reasons for investing is so that we can enjoy regular income from our investments. While we can invest in high dividend-paying stocks and bonds to earn regular dividend income or coupon payments, it also makes sense to consider investing in dividend-paying ETFs. When we invest in dividend-paying ETFs, we enjoy diversification as our investment is made into a variety of stocks (or bonds), as opposed to having exposure to just a single company.

Of course, this doesn’t mean that our investment portfolio is fully protected. Similar to stocks and bonds, the value of ETFs can also go up or down depending on the components that make up the ETF. Unlike investing in growth or value investing, the idea behind dividend investing is to generate a consistent stream of income from our investments.

In this week’s edition of 4 Stocks This Week, we take a look at 4 dividend-paying ETFs that investors can invest in on the SGX if they want to enjoy regular dividend income.

Do note that all financial information in this article is taken from the SGX market update report published on 20 April 2021.

iShares Barclays USD Asia High Yield Bond ETF (SGX: O9P)

With a 12-month dividend yield of about 6.6%, the iShares Barclays USD Asia High Yield Bond ETF (SGX: O9P) is a bond ETF that you can invest in if you want investment exposure to high-yield bonds that are issued by government and corporates in Asia (excluding Japan).

The ETF invests in the bonds of more than 300 companies across Asia, with these bonds primarily being BB-rated (36.6%), B-rated (38.3%) and Not Rated (23.6%). As bond investors will know, the lower the credit rating of a bond, the poorer quality it’s deemed to be. This is also why they tend to give higher yields to compensate investors for taking on a higher risk when investing in these bonds. This also makes the iShares Barclays USD Asia High Yield Bond ETF one of the highest-paying dividend ETFs on the SGX.

This ETF is denominated in USD and has an expense ratio of 0.5%.

Lion Phillip S-REIT ETF (SGX: CLR)

Launched in October 2017, the Lion Phillip S-REIT ETF (SGX: CLR) invests in Singapore REITs such as Capitaland Integrated Commercial Trust (9.9%), Keppel DC REIT (9.7%) Ascendas REIT (9.6%) and Mapletree Logistics Trust (9.2%). In total, the REIT currently invests in 25 different Singapore REITs. The current 12-month dividend yield for the ETF is at 6.0%.

Since its inception in 2017, the Lion Phillip S-REIT ETF has generated a return of about 6.1% p.a. The ETF has an expense ratio of 0.60% p.a.

NikkoAM-StraitsTrading Asia ex Japan REIT ETF (SGX: CFA/COI)

Another REITs ETF that Singapore investors can consider is the NikkoAM-StraitsTrading Asia ex Japan REIT ETF (SGX: CFA/COI). Unlike the Lion Phillip S-REIT ETF that only has exposure to Singapore REITs, the NikkoAM-StraitsTrading Asia ex Japan REIT ETF has investment exposure in countries such as Hong Kong, Malaysia, India and China.

The current 12-month dividend yield for this REITs ETF is 5.1%, with its management expenses at 0.6%. You can invest in this ETF in both SGD (SGX: CFA) or USD (SGX: CQI).

Read Also: How Much Would Singapore Investors Have Made If They Invested $1,000 In Every REIT ETF Since Their Listing?

Phillip SING Income ETF (SGX: OVQ)

The Phillip SING Income ETF (SGX: OVQ) is an ETF that invests in 30 high-quality Singapore companies with the intent of offering stable and quality income for its investors. This is why some of the top companies it invests in are household names such as DBS (10.5%), OCBC (10.2%), UOB (9.7%), SGX (8.8%) and Singtel (8.3%). Other companies that are part of this ETF include SATS, Genting Singapore and Netlink Trust.

The financial sector takes up about 40% of the allocation within this ETF, with REITs taking up about 21% of the allocation. The 12-month dividend yield is at 5.2% for the ETF. This is a good ETF to consider if you want to invest in Singapore equities for income.

Read Also: Complete Guide To ETF investing in Singapore

Advertiser Message

Don’t Take A 50-50 Chance With A So-So Trading Experience

As a Gold/Diamond client with FSMOne.com, you can let your investments soar higher with flat HK$50 processing fees* for HKEX trades. This means that whether you make a HK$10,000 or HK$100,000trade, you will only be paying HK$50 in processing fees*. So, the higher your investment amount, the higher your cost savings!
Click here to find out more.
*Excludes exchange-related fees.

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.