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When it comes to investing, having too many choices can sometimes be more paralysing than helpful.
With thousands of stocks, bonds and other instruments available, it’s easy to feel overwhelmed, especially if you are new to investing. For many, the fear of choosing the wrong investment can be a major hurdle that delays their investing journey altogether.
In a way, it’s not too different from walking into a popular restaurant in a foreign country. You know the food is good. You want to eat there. But you are handed a menu that has more than 100 items on it with dishes you don’t recognise, and descriptions that don’t quite help. You want to make a good decision, but you are unsure about what to order. What do you do?
One solution will be to go with the recommended restaurant set meal.
ETFs Are Like A Set Meal Curated By The Chef
This is where Exchange Traded Funds (ETFs) come into play.
Think of ETFs as the investment world’s version of a well-curated set meal. Instead of picking individual investments (or dishes), you simply have a professional fund manager construct a portfolio of assets that are bundled into one convenient package.
Just like a chef has thought carefully about the combination of dishes to provide a balanced meal, ETFs are curated by their fund managers to give you diversified exposure across companies, sectors or geographical regions.
The Benefits Of Investing Through ETFs
There are a few important reasons why ETFs make sense for most retail investors.
#1 Instant Diversification
A good set meal allows you to sample many of the best dishes that the restaurant has to offer without needing to choose. Similarly, ETFs let you invest in dozens or even hundreds of stocks or bonds in one go. For investors, diversification is important because it allows you to spread your risk across multiple stocks or bonds instead of just investing in 1-2 companies.
For example, when we invest in the Nikko AM Singapore STI ETF (SGX: G3B), we are immediately investing in the top 30 companies listed on the Singapore Exchange (SGX) main board, which include banks such as DBS, OCBC and UOB, and other blue-chip companies like Singtel, Capitaland Commercial Trust and SGX.
#2 Accessible & Transparent
When you look at the set menu at the restaurant, it shows you all the dishes that you will be served. Similarly, ETFs are known for their transparency. You can easily find information such as top holdings, sector exposure and historical performance by simply browsing through the webpage of the ETF that you are keen to invest in.
ETFs are also traded on the stock exchanges, which means that you can easily buy and sell them during market trading hours with complete price transparency.
#3 Cost Effectiveness
Ordering à la carte might be fun, but the cost can quickly add up even with just a few dishes. Similarly, buying individual stocks and constructing your portfolio can be time-consuming, expensive and may incur higher trading fees.
ETFs, on the other hand, typically have lower transaction fees and management fees compared to traditional options like single stocks or unit trusts – offering a more cost-efficient way for retail investors to build a diversified portfolio. For example, if we wish to invest in high-quality corporate bonds, with a single trade (as low as $1.1) in the Nikko AM SGD Investment Grade Corporate Bond ETF , we can get investment exposure to over 100 bonds from high quality issuers such as Temasek, HSBC and Singtel.
#4 ETFs Are Self-Rebalancing
One of the most important benefits of ETFs is that they can automatically rebalance themselves.
What do we mean by that?
Take the Amova E Fund ChiNext Index ETF as an example. The ETF tracks the ChiNext Index, which includes the top 100 largest and most liquid companies listed on the ChiNext board of Shenzhen Stock Exchange.
This ETF is reviewed and rebalanced every six months. Constituents are adjusted, removed or added to the fund, according to changes in the index. This is based on set index parameters, such as market capitalisation (“market cap”), liquidity or other performance indicators. When market cap is used as a parameter, the weakest performers whose market cap have fallen below the cut-off level are automatically removed and replaced with stronger performers whose market cap has risen above the cut-off criteria. This way, the ETF ensures that it’s always going to capture the relevant and sizeable companies.
This is somewhat similar to how a good restaurant will also regularly update its set menu to ensure that they are always serving the best, freshest and even newer dishes that are popular among customers, including seasonal highlights. As an investor, this alleviates the need to constantly watch your portfolio as the index would regularly add and filter out companies based on the set index parameters.
Choosing The Right ETFs
Just like you might choose between a seafood omakase, vegetarian tasting menu or the restaurant’s signature set, there are many different ETFs that cater to different investor appetites.
Here’s a quick look at the different ETFs that are offered by Nikko AM.
Here’s the list of ETFs that NikkoAM has on the SGX.
Some ETFs focus on equities while others invest in fixed-income assets. There are also ETFs that provide overseas exposure, such as the Amova E Fund ChiNext Index ETF, which allows investors to tap into China’s innovation-driven economy. By investing in this single ETF, you gain exposure to the top 100 A-shares listed on the ChiNext board, a platform known for hosting some of China’s promising and liquid growth companies.
For those looking to invest in real estate, the NikkoAM–StraitsTrading Asia ex Japan REIT ETF offers diversified exposure to some of the largest REITs across the Asia ex Japan region.
Ultimately, the choice of ETF depends on your investment preferences and risk appetite. But the idea remains the same: you select the “set menu” (ETF) you want, and the fund manager, like a skilled chef, curates a well-balanced portfolio for you.
Ready To Order Your Investment Set Meal?
Investing doesn’t have to be stressful or complicated. Whether you are just getting started or already a seasoned investor looking for greater convenience, balance and cost efficiency, ETFs offer a practical and powerful way to grow your wealth.
Getting started is easier than you might think.
Firstly, decide how you want to invest, whether you are using cash, CPF savings or SRS funds.
Secondly, open a brokerage account that gives you access to the ETFs you are interested in. Some platforms also offer Regular Savings Plans (RSPs), which allow you to invest in ETFs from as little as $100 a month. This not only lowers the barrier to entry, but also allows you to benefit from dollar-cost averaging (DCA), a simple strategy that reduces the risk of trying to time the market.
Lastly, select your preferred ETFs based on your goals and risk appetite. You can browse a range of curated ETF options on the Nikko AM website to help you get started.
With just a few simple steps, you’ll be on your way to building a diversified, professionally constructed portfolio, served up with all the benefits of a well-balanced financial “set meal.”
As with any investment that we make, it’s important to keep in mind the risks that we face. ETF prices can fluctuate with market conditions, sector performance and currency movements. Understanding what’s inside your ETF, reviewing it regularly and having a long term investment approach will help us with our investment journey.
From 1 September 2025, Nikko Asset Management will be rebranded as Amova Asset Management. Same trusted team, new name. Check out the full suite of Amova ETFs for the Singaporean investor here!
Read Also: How Investing Our CPF & SRS Savings In ETFs Can Supercharge Our Retirement
Top Image: iStock/jackmalipan
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The NikkoAM-StraitsTrading MSCI China Electric Vehicles and Future Mobility Index ETF, Amova MSCI AC Asia ex Japan ex China Index ETF, and Amova E Fund Chinext Index ETF are sub-funds of Nikko AM Asia Limited VCC, an umbrella variable capital company incorporated in Singapore. These funds are managed by Nikko Asset Management Asia Limited.
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