When interest rates were high, Singapore Treasury Bills (T-bills) became the investment of choice. They were simple, safe and offered yields of around 4%. But with rates now closer to 1.85%, many investors are asking: how can I still earn steady returns without taking on much more risk?
At MooFest 2025, DollarsAndSense spoke with Bertram, Investment Director and Portfolio Manager at Amova Asset Management (formerly Nikko AM), about how bond exchange-traded funds (ETFs) can be the next step for investors looking beyond T-bills.
Watch the full DollarsAndSense Podcast episode with Bertram here:
T-Bills Remain Reliable but Offer Lower Rewards
T-bills are backed by the Singapore government and remain one of the safest investments available. They’re a popular parking spot for cash, especially when markets feel uncertain.
However, with yields now below 2%, they may not keep pace with inflation or provide meaningful income for long-term investors. This is where bond ETFs can come in — they offer the potential for higher yields while still keeping risk at a moderate level.
Read Also: Treasury Bills (T-bills): What Are They And How You Can Buy Them
Bond ETFs Provide Simple Access to a Range of Bonds
A bond ETF lets investors buy a basket of bonds, from government issues to corporate debt — in a single trade. With a minimum investment of roughly $1,000, they make the bond market much more accessible compared to buying individual bonds, which can require $250,000 or more.
Two well-known options in Singapore are the ABF Singapore Bond Index Fund and the Amova SGD Investment Grade Corporate Bond ETF.
The ABF Fund, listed since 2005, holds Singapore Government Securities and statutory board bonds such as those from HDB. It’s composed mainly of AAA-rated, government-backed debt and currently pays semi-annual dividends of around 2 to 2.5%.
The Amova Corporate Bond ETF, launched in 2018, invests in high-quality corporate bonds from well-known issuers such as Temasek, Singtel, HSBC and UOB. It typically yields around 3 to 3.3%, with dividends also paid twice a year.
Bond ETFs Can Help Smooth Out Market Volatility
Because bonds often move differently from shares, including them in a portfolio can help cushion the impact of stock-market ups and downs.
For retail investors, bond ETFs are a simple and cost-efficient way to achieve that balance. They trade on the stock exchange just like shares, have low management fees, and allow investors to buy, sell or rebalance easily whenever market conditions change.
Understand the Risks Involved
While bond ETFs offer stability, they are not risk-free. Their main vulnerability lies in interest-rate movements. When rates rise, bond prices typically fall, leading to short-term drops in value. However, over time, the steady coupon payments can help offset these fluctuations.
Unlike individual bonds, bond ETFs do not have a fixed maturity date. Instead, they maintain a relatively stable duration, usually between eight and ten years, meaning your exposure to rate changes stays consistent.
Bertram suggests viewing bond ETFs as part of your core Singapore-dollar portfolio, alongside cash and T-bills. Government bond ETFs can provide safety and diversification, while corporate bond ETFs add a little more income potential.
He also recommends adjusting your mix based on the interest-rate outlook. If rates are expected to fall, holding more bonds could bring capital gains. If rates are likely to rise, trimming your bond exposure can help limit downside risk.
A Growing Option for Balanced Portfolios
T-bills remain a dependable starting point, but bond ETFs offer a practical way to aim for higher and steadier returns. With low entry amounts, regular dividends and broad diversification, funds like the ABF Singapore Bond Index Fund and the Amova SGD Investment Grade Corporate Bond ETF make it easier for investors to build balanced, resilient portfolios that can weather different market cycles.
Moving Beyond the Basics
As Singapore’s investment landscape evolves, tools like bond ETFs are helping everyday investors take the next step from short-term cash management to longer-term growth. They strike a useful middle ground between safety and opportunity — offering flexibility without complexity.
For those looking to strengthen their portfolios in 2025 and beyond, learning how bond ETFs fit into your financial plan could be the key to achieving steadier, more sustainable returns.
Check out the full episode below to hear Bertram’s full insights on how bond ETFs fit into a Singapore investor’s portfolio, including what to watch in 2025’s interest-rate cycle:
Watch on YouTube: DollarsAndSense Podcast Ep 35 | Beyond T-Bills: How Bond ETFs Can Help Singapore Investors Diversify
Listen on Spotify: DollarsAndSense Podcast Ep 35 | Beyond T-Bills: How Bond ETFs Can Help Singapore Investors Diversify
