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The economy of Singapore has been growing tremendously in the past, and such an upward trend provides a clear picture of what 2019 will be like for investors. However, there are market headwinds as a result of the protracted trade wars between the US and China. Despite this, Singapore continues to experience an impressive rate of growth, and for investors, one way to take advantage of the stability and economic growth in the country is through Exchange Traded Funds. ETFs, provide the required exposure to investments that could not be available via other investment products. ETFs are easily accessible in Singapore since they are listed and traded in the SGX.
For the better part of last year, ETF investors witnessed the decline of the Strait Times Index (STI), and as of November, it had generated a return of -5.9% according to the Singapore Exchange Limited. Despite the decline, Singapore still offers the best ETFs with some of the best returns. Although last year was a tough year with poor returns, there was still exceptional performance in the first six months, and that should provide hope for 2019 because it’s a sign of how the market will perform. Here are some of the best ETFs to consider in 2019.
SPDR STI ETF
This is one of the best ETFs in Singapore, and it tops the list as one of the most attractive ETFs because of its good returns. The ETF is designed for individuals who are venturing into investing as well as for those seeking a steady flow of income. The ETF works by replicating the performance of the STI listing of 30 leading companies in Singapore.
Since SPDR STI ETF tracks the performance of STI of big companies, it thus gives investors the necessary exposure to companies such as Singtel, DBS OBC, and CapitaLand whose stock features in the STI index. The ETF provides you with a way of buying into the Singapore economy as well as gaining exposure of companies doing business in emerging economies like Malaysia and Indonesia.
For income-focused investors, this ETF should be your pick because, since 2002, investors have been receiving annual returns of around 3.8% exclusive of dividends. If dividends are added them the returns jump to almost 7% making it one of the best and if you are looking to double your investment every ten years, then this is the ideal ETF for you. It also has a lower expense ratio relative to other ETFs, thus making sure there are optimal returns on the investment.
Nikko AM Singapore STI ETF
This is a low-cost ETF in Singapore that tries to replicate how the FTSE STI index performs. If you are seeking a low cost and modest way of getting exposure to the SGX, then this should be your ETF choice. Most of the ETF’s assets are invested in index shares, which make it ideal for individuals who want to make the most of dividend distribution and capital gains.
Equally, the ETF offers a reliable means of investing in various target stocks at an affordable cost. The expense ratio of the ETF is around 0.35% with the dividends being paid bi-annually. If you are an investor seeking amazing opportunities, then you should consider this ETF because in the last three years it has had an average return of 11.65%. It also boasts an annual dividend return of about 3.5%.
Ishares MSCI Singapore ETF
For investors seeking to get exposure to equities in Singapore, this ETF is an excellent pick, and it is worth your investment. The ETF provides investors with exposure to Singapore’s large-cap and mid-sized companies through tracking the MSCI Singapore index. It has close to $800 million Assets under management of which it charges around 49 basis points annually. The bulk of the fund’s portfolio is comprised of financial assets that account for 39.3% with real estate coming second at 21.4%, followed by industrial at around 18%. Oversea-Chinese Bank Ltd, DBS Group Holdings, and United Overseas Bank Ltd are among the top holdings of the ETF.
For investors seeking exposure to the industrial, real estate and financial sector in Singapore, then this should be the path. In the past three years, the ETF has had an annual return of 48.8%, which is among the highest in the industry. It has a five year annualized return of 26.5% with annual dividend returns of close to 5.08%.
Philip SGX APAC Dividend Leaders REIT ETF
This ETF is a good pick for investors seeking investment opportunities in the growing real estate industry in Singapore. It will also give exposure to real estate properties in Australia and Hong Kong. The ETF tracks REITs such as Ascendas REIT that has properties in Singapore, China, as well as Singapore Australia and Mapletree that has diversified real estate portfolio in China, Australia, Malaysia, Vietnam, and South Korea.
The ETF has the lowest expense ratio in the industry at 0.3%, and it was one of the ETFs that performed well in 2018. Since the inception Phillip SGX APAC Dividend Leader REIT ETF it has been offering annual returns of 5.02%.
Global X Southeast Asia ETF
This ETF, unlike most of the ETFs in Singapore, offers exposure beyond Singapore to some of the largest economies in the region. It offers investors access to stocks to member states of the Association of Southeast Asian Nations, which include Singapore, Malaysia, Indonesia, Thailand, and Philippines. However, the ETF has the majority of Singapore stocks accounting for around 30.7% followed by Thailand at 22.3% Malaysia and Indonesia at 21.4% and !9.1% while Philippines has the least share at 6.5%. Some of the key sectors that the ETF specializes on are consumer staples and financials telecommunication.
The biggest holdings of the ETF include Oversea-Chinese Banking Ltd, United Overseas Bank Ltd, and DBS. Global X FTSE Southeast Asia ETF is an ideal choice for investors looking to take advantage of the GDP of Singapore that is tremendously growing because a larger portion of the stocks are from Singapore. The ETF enjoys an 8% in annualized returns and a 1.17% return in the last 12 months.
