- Singapore has a thriving economy, making it appealing for many investors.
- ETFs help Indians get exposure to the Singapore markets without needing local knowledge.
- Indians must take care to comply with Foreign Direct Investment rules.
- Not all brokers will offer all ETFs so it pays to shop around.
Indian investors seeking exposure to international markets may wish to consider adding ETFs that track the Singapore markets to their portfolios. Singapore has a thriving economy, and ETFs are a simple way of investing in the company’s businesses. Rather than picking specific stocks and shares, an ETF tracks the performance of a market. Many of these ETFs have small minimum purchase requirements, opening investment doors for more people.
1. GLD SG$ (GSD)
The Singapore Gold Trust1 is a fund that tracks the price of gold based on the LBMA Gold Price PM. The fund’s performance mirrors the gold price quite well before fees. This tracker has a relatively small trading volume compared to some index trackers. However, it may be useful to those who are interested in having some gold in their portfolio and who don’t want to deal with the practical issues of storing the physical asset.
2. Phillip SGX APAC Dividend Leaders REIT ETF
This dividend ETF2 tracks the performance of the iEdge APAC Ex-Japan Dividend Leaders REIT Index. It aims to provide a high level of income along with some medium-term capital appreciation and does so by holding the underlying assets, with the fund’s weighting based on a combination of the REIT’s dividends, their market capitalization and their liquidity. The fund tracks the index quite closely, making it a convenient option for those who are looking for exposure to the APAC market.
3. STI ETF (ES9)
The STI ETF fund3 offers investors a simple way of obtaining diversified exposure to some of the biggest companies in Singapore, offering growth potential over the medium to long term. The STI ETF has an expense ratio of just 0.3% and, as of April 2022, had a distribution yield of 2.98%. Indian investors who are looking to build a diverse international portfolio may find the makeup of this ETF means it is an appealing option for them.
4. Lion Phillip S-REIT ETF
This ETF is aimed at investors who are relatively risk-averse. It is structured with the goal of low to moderate returns and a corresponding risk profile. The Lion Philip S-REIT ETF4 tracks several major REITs in Singapore and the surrounding region and entitles the holder to dividends. Morningstar screens the REITs before including the investment in the portfolio. The screening criteria include yield potential and financial health to ensure stability and performance for the fund.
5. CIMB S&P Ethical Asia Pacific Dividend ETF
Investors who are interested in supporting ethical companies may find the CIMB S&P Ethical Asia Pacific Dividend ETF5 appealing. This EFT tracks the S&P Ethical Pan Asia Select Dividend Opportunities Index and has been operating since early 2012. The fund’s returns so far have been poor due to the poor performance of the underlying index. However, past performance is not an indicator of future trends, and the index itself reflects challenging market conditions.
6. SPDR Straits Times Index ETF
The SPDR Straits Times Index ETF6 is a low-cost fund that tracks the performance of the Straits Times Index. It has a total expense ratio of just 0.3% and is heavily weighted toward companies in the financial sector. The fund also holds a significant number of companies in real estate. It has relatively low fees and minimum purchase limits, making it an appealing option for those who are looking for low-cost exposure to the markets in Singapore.
7. Nikko AM Singapore STI ETF
Nikko’s AM Singapore STI ETF7 is another fund that tracks the performance of the Straits Times Index. It does so by investing in all, or substantially all, of the assets in the index. It aims to maintain a similar weighting of those assets to what you see in the index itself. The fund has existed since 2009, and there is a flat per transaction, making it a potentially appealing investment for those planning to hold long-term.
8. Xtrackers MSCI Singapore UCI
While some funds pay their dividends to investors, the Xtrackers MSCI Singapore UCI8 is an accumulating fund that reinvests the dividends. This fund is available for trading on several exchanges in U.S. dollars and euros. It’s quite volatile, as is the underlying market. It has a strong weighting toward financial and real estate companies, as do other trackers following this market, and the top 10 companies in the tracker account for 77% of its allocation.
9. ABF Singapore Bond Index Fund
The ABF Singapore Bond Index Fund is a fund that tracks the investment returns of debts denominated in Singapore dollars issued or guaranteed by the Singapore government and other governments in nearby territories, including the People’s Republic of China, Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines or Thailand. Bonds typically offer lower returns than stocks and shares but are also lower risk. This index fund provides a low-cost way to get exposure to government bonds as an individual buyer from India.
10. SPDR S&P 500 ETF
The SPDR S&P 500 ETF9 is a fund that tracks the value of the S&P 500. The S&P 500 focuses on the U.S. markets, so many investors may prefer to purchase an ETF denominated in U.S. dollars. However, for those who either have an income in Singapore dollars or are already exchanging currency for other reasons, this ETF could be a convenient option for getting exposure to international markets and diversifying their portfolios further.
11. SPDR Gold Shares
Another commodity tracker, the SPDR Gold Shares10 fund tracks the price of gold. It promises low expense ratios and is physically backed by gold. The SPDR Gold Shares fund is traded on several exchanges worldwide, so it should be accessible to most Indians who are interested in global investment. To date, the ETF has been listed on the Singapore Stock Exchange, Tokyo Stock Exchange, The Stock Exchange of Hong Kong and the Mexican Stock Exchange (BMV).
12. ICBC CSOP FTSE Chinese Government Bond Index ETF US$D
This fund has a total of $676 million in assets under management. It tracks the value of Chinese government bonds.11 The fund offers dual currency trading in both Singapore dollars and U.S. dollars. Government bonds are a long-term investment, with interest typically paid annually. This form of investment can be useful as a hedge against inflation, but the returns it offers tend to be lower than one might find if they invested in more volatile assets.
13. PRINCIPAL ASEAN40
Principal Financial Group manages the PRINCIPAL ASEAN40,12 a fund that tracks the FTSE / ASEAN 40 index. The fund has no subscription or redemption fee and a modest clearing fee of just 0.05% of the value of the transaction. Individual brokers offering the fund may charge their own fees. The ASEAN40 tracks the underlying index quite accurately and may be an appealing option for those looking for medium-term returns.
14. iShares USD Asia High Yield Bond Index ETF
This ETF is a U.S. dollar-denominated fund that tracks the performance of several high-yield bonds issued by governments in the Asia ex-Japan region. The iShares USD Asia High Yield Bond Index ETF13 offers higher potential returns than many other bond indexes due to the selection of government bonds included. Bonds are a long-term investment option for those seeking stability and who are relatively risk averse.
15. Philip Sing Income ETF
The Philip Sing Income ETF14 provides investors with exposure to 30 Singapore stocks that have the potential to generate dividend income and long-term returns. It selects the stocks based on their dividend payouts, performance and stability. Indian investors who are looking to diversify and get exposure to the Asian markets may appreciate the variety of sectors represented in this fund.