These SGX-listed ETFs performed the best in 2017. This is why.
In 2017, a number of indices charted new highs, bringing up the performance of a number of exchange traded funds that replicated them. The table below sums up the top 6 ETFs that have outperformed its peers in the ETF investing space:
|Singapore ETFs||2017 price gain|
|db x-trackers FTSE China 50 UCITS ETF||37%|
|db x-trackers MSCI Korea UCITS Index ETF||29%|
|SPDR S&P 500||23%|
|db x-trackers MSCI Indonesia Index UCITS ETF||22%|
|db x-trackers MSCI Thailand Index UCITS ETF||18%|
|SPDR Straits Times Index||17%|
Here’s what you need to know about these ETFs.
Db x-trackers FTSE China 50 UCITS ETS
The resilience of Chinese economy has put China on the back of growth track since the surprise devaluation of its RMB currency in 2015. China’s export led growth has lifted the Chinese economy to World No. 2 in terms of absolute GDP, and the growth story resumes strongly in 2017. Db x-trackers FTSE China 50 UCITS ETS, a China ETF, tracks China’s H shares recorded an impressive 37% price gains for 2017 which puts it at the top of the league. Investors are exposed to the largest well run Chinese listed firms via db x-trackers FTSE China 50 UCITS ETF. The ETF replicates the price performance of the FTSE China 50 H Shares index which contains China’s biggest conglomerates such as Sinopec, Petrochina, Bank of China and China Construction Bank. The index recovered strongly since the market meltdown in 2015 and further gains are anticipated.
db x-trackers MSCI Korea UCITS Index ETF (DR)
Korean stocks have generally been viewed to be undervalued among the Asian region and investors can gain investment exposure to Korean stocks via db x-trackers MSCI Korea UCITS Index ETF (DR). Investors which had taken a long position in the ETF since the start of 2017 would have sitting on a massive 29% unrealized gains as at the end of 2017 even on the back of North Korean political nuclear threats. Corporate earnings fundamentals prevailed at the end of the day. The underlying index which the Fund tracks, MSCI Korea has 112 Korean multinationals and conglomerates such as Samsung Electronics and Hyundai. The index components at one time was trading at a low P/E multiple of 12 times historical earnings, making it one of relatively undervalued equity markets in the Asia region. Investors would gain instant exposure to 85% of Korean listed large cap and mid cap stocks via investment into the ETF.
PDR S&P 500 ETF
US stocks experienced the greatest bull-run since the ascent of Donald Trump as President of the United States where a slew of economic reforms were being proposed with the biggest highlight being reduction of US corporate tax rate which was successfully passed. S&P 500 index, with the best US public listed multinational companies making up the constituents of the index, has powered up the SPDR S&P 500 ETF 23% to close out 2017 at an all-time high. US unemployment rate was hovering at all-time low of around 4.1% for 2017 and a strong underlying economy has pushed up the valuations for US based companies.
db x-trackers MSCI Indonesia Index UCITS ETF
Indonesia, being the largest country in South East Asia in terms of population size, deserves investor’s attention due to rapidly rising income and explosion of middle class citizens with higher purchasing power. The country is home to some of the locally listed corporations such as Telkom Indonesia, Astra International and Bank Mandiri. With a roaring global economy in 2017, Indonesia stocks has charted strong price growth as well with db x-trackers MSCI Indonesia Index UCITS ETF which closely monitors the performance growth similar to the MSCI Indonesia Index racking up 22% gains in 2017. The index comprises 31 Indonesian companies, giving investors diversified access to the future earnings of these companies and corporate earnings has not disappointed investor.
db x-trackers MSCI Thailand Index UCITS ETF (DR)
Thailand stocks have brought cheers to investors as well, with db x-trackers MSCI Thailand Index UCITS ETF (DR) gaining 22% for 2017. Thailand has been on military administration since 2014 but business has been as usual with 2017 being one of the best growth years. Exports were up 9% for the past year with the main baht currency strengthening for much of 2017. South East Asian economies has fared pretty well in 2017 with all major equity indices charting strong growth in the absence of major political events.
SPDR Straits Times Index ETF
The last but not the least on the list of high performing ETF for 2017 is the SPDR Straits Times Index ETF. The ETF tracks the Straits Times Index, giving investors instant exposure to the top 30 Singaporean blue chip heavyweights such as DBS, UOB and Singtel. The ETF NAV grew 18% in 2017, mirroring the performance returns of STI over the exact period. Stabilisation of the oil and gas sector, rising interest rate environment has been great for banking stocks, where worst of its provision of oil and gas loan book had passed were tailwinds that pushed banking stock shares to new highs. Banking stocks makes up almost 40% of STI weightage, represented by DBS, UOB and OCBC Banks.