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Trying to invest in a few individual stocks may lead to poorer outcomes for your overall portfolio. You may encounter “analysis paralysis” – a term used to describe overthinking and analysing your decisions, especially since there are also many stocks that you can invest in. There’s also a good chance that you get swayed by “hot tips” or trending stocks without really understanding why you’re buying into the hype.
It may be more convenient and prudent to buy a diversified collection of stocks instead. Exchange traded funds (ETFs) offer investors the opportunity to build a diversified portfolio of high-quality stocks while keeping costs low.
On the Singapore Exchange (SGX), you can gain broad-based exposure in 4 types of ETFs, namely in equities or stocks, REITs, fixed-income, and commodities.
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#1 Equities ETFs
The most popular ETFs in Singapore are typically the ones that track the country-based indexes. These include Singapore’s Straits Times Index (STI), Hong Kong’s Hang Seng Tech Index (HSTECH), and the US’ S&P 500 Index, which focus on the top-performing companies in that country.
Other than the broad country indexes, there are also ETFs that sector-based or even grouped based on size or social values, such as those that are more sustainable or low-carbon-based.
For example, the Lion-OCBC Securities APAC Financials Dividend Plus ETF (SGX: YLD) is made up of the 30 largest financial companies in the Asia Pacific region with stable dividend payouts. If you ever wanted to invest beyond Singapore’s three big banks, DBS, OCBC, and UOB, this may be the ETF for you. It includes the most reputable banks in the region, such as Sumitomo Mitsui Bank and Mizuho Bank in Japan, HSBC in Hong Kong, and Australia’s Commonwealth Bank, National Australia Bank, and Westpac.
Another ETF, the Lion-OCBC Securities Singapore Low Carbon ETF (SGX: ESG) focuses on the top 40 green companies in Singapore focused on decarbonisation and sustainability goals. If you want to invest with intention, this may be the ETF for you. It includes some of Singapore’s most forward-looking companies, including the three banks and Singtel, as well as Singapore companies that are listed elsewhere, such as Sea Ltd, Flex Ltd, and Grab.
Another ETF, the UOBAM FTSE China A50 Index ETF (SGX: JK8), tracks the top 50 A-share stocks in China. China A-shares are issued by Chinese companies that are incorporated and listed on the mainland. You can consider this ETF if you want to gain exposure to some of China’s largest companies, including liquor producer Kweichou Moutai, battery manufacturer CATL, and electric vehicle giant BYD.
#2 Fixed Income ETFs
Fixed income assets such as bonds are often seen as lower-risk, lower-return investment alternatives compared to equities, which tend to be more volatile.
A balance of bonds and equities can improve an investment portfolio’s risk-return profile over a longer period. However, it might not be practical for some retail investors to invest in bonds or other fixed income assets directly as they may not be able to access certain bonds due to the high minimum investment amounts or even build a portfolio of fixed income to adequately diversify their exposure in the asset class. Issuance timing and liquidity may also be an issue
This is where fixed income ETFs come in.
Unlike individual bonds, which are subject to market demand and supply, fixed income ETFs can be bought and sold anytime during market trading hours, even if the underlying bonds are illiquid.
For example, the iShares Asia High Yield Bond ETF (SGX: QL3) comprises high-yield bonds issued by governments and corporations in Asia. This may be the ETF to choose if you want to gain exposure to bonds issued by ICBC in China, Australian mining services company Mineral Resources, Rakuten and Nissan in Japan, or even government bonds issued by Pakistan and Sri Lanka.
You can also gain exposure to a basket of investment grade bonds, that must meet the credit rating threshold of BBB, with the NikkoAM Investment Grade Corporate Bond ETF (SGX: MBH). This may be the ETF to choose if you want to gain exposure to bonds issued by Temasek, HSBC, NTUC Income, Singtel, and HSBC.
#3 REITs ETFs
Real Estate Investment Trusts (REITs) are a popular investment asset in Singapore, allowing investors to gain exposure to a large portfolio of properties with just a small investment amount. REITs ETFs take this concept one step further by tracking the performance of multiple REITs. This allows for even greater diversification.
The CSOP iEdge S-REIT Leaders Index (SGX: SRT) focuses on the performance of the most liquid REITs in Singapore. This may be the ETF to choose if you want to gain exposure to the full spectrum of real estate sectors, including data centres via Keppel DC REIT, commercial real estate via CapitaLand Integrated Commercial Trust, industrial real estate via CapitaLand Ascendas REIT and Mapletree Industrial Trust.
#4 Commodities ETFs
The SPDR Gold Shares ETF (SGX: GSD) tracks the price of gold bullion, specifically the LBMA Gold Price. If you want to invest in gold, but have concerns about buying and storing physical gold, this may be the ETF to choose. With the benefit of greater liquidity and price transparency, this gold ETF may be a cost-effective alternative investment to physical gold.
Invest In ETFs On SGX With FSMOne
FSMOne has helped Singapore investors to invest in globally-diversified portfolios since 2000 by catering to their every need as a one-stop for unit trusts, bonds, stocks, ETFs, and more.
Earlier this year, on 27 January 2025, FSMOne announced its intention to revolutionise ETF investing by becoming the first platform in Singapore to offer a flat processing fee of S$3.80 for ETFs listed on the SGX. This game-changing flat processing fee removes high trading cost as a barrier for investors and further empowers investors to invest better in global ETFs.
For many investors, it’s not just about making one-off investments. By investing regularly, you take pressure off your ability to time the market and can start small, using your monthly income to invest rather than having to accumulate a large lump-sum before you can start.
You can do this with FSMOne’s ETF Regular Savings Plan, which offers more than 250 popular ETFs, including the examples we used above. You can start investing in them from just S$50 a month – and retain the flexibility to stop at any time or increase your investment size once you are more confident. Now, don’t miss out on the opportunity to invest with 0% processing fees (No hidden charges, with $0 platform fees and 0% brokerage commissions) when you invest regularly on FSMOne’s ETF Regular Savings Plan.
Promo Code To Start Your Journey With FSMOne
What’s even better is that you can now receive $10 when you open an FSMOne account using the referral code ETFGems25 and enjoy 3 free trades on any SGX listed stock or ETF. The promo runs till 5th August 2025. Terms and Conditions Apply.
Join FSMOne For An Exclusive Event
Don’t miss FSMOne’s exclusive event, “The Perfect Match – ETFestival x Mid-Year Review,” on 5th July 2025, Saturday, at Marina Bay Sands! From 9.30am to 5.00pm, learn how FSMOne can be your perfect investment partner and hear from industry experts on how to confidently navigate the markets and optimise your portfolio. Find out more and register for free admission here!
