KEY HIGHLIGHTS
ETF Background:
Both the Nikko AM Singapore STI ETF and SPDR Straits Times Index ETF stand as Singapore’s locally created exchange-traded fund, crafted to track the Straits Times Index’s performance. The Funds’ primary aim is to closely emulate, before expenses, the performance of the Straits Times Index. They present investors with a chance to diversify their holdings across Singapore’s leading companies and engage Singapore’s long-term growth potential through a single, cost-effective transaction.
Investment Highlights:
Target Audience:
*Implied target price / dividend yield is sourced from Bloomberg, calculated by the weighted average of the component stock’s indicated dividend yield/indicated percentage change in price
Financials
Both ETFs have almost half of their holdings in Singapore’s major banks DBS, OCBC and UOB. These banks have established a long history in Singapore’s financial landscape, which is known for its stability, strong regulatory framework, and transparency. Each bank has its own strengths and areas of focus. An exposure to each of them provides diversification within the banking sector itself. DBS, for instance, has a strong digital banking presence, while UOB has traditionally focused on small and medium-sized enterprises (SMEs). OCBC has a diverse range of businesses, including banking, wealth management, and insurance. Singapore’s banks have been at the forefront of adopting digital innovations in banking services. They are continually investing in technology to enhance customer experience and efficiency, which could potentially translate into competitive advantages. They have also offered stable dividends, making them attractive to income-focused investors.
Real Estate
Singapore’s real estate market is known for its stability, transparency, and well-regulated environment. Strong governmental policies contribute to a secure investment landscape. Despite occasional fluctuations, Singapore’s real estate market has shown resilience over time, offering long-term capital appreciation. Limited land supply and steady demand often support property values. Singapore also has a strong rental market, driven by its status as a global business hub. Investment properties can provide a steady income stream through rental yields, particularly in prime locations. Continuous urban development and infrastructure projects, such as transport enhancements and smart city initiatives also add value to real estate investments by improving accessibility and liveability.
Industrials
Singapore’s strategic location in Southeast Asia makes it a key hub for logistics, manufacturing, and trade. Its connectivity to global markets via sea and air routes enhances the appeal of industrial investments. The country boasts a modern infrastructure, including ports, airports, and advanced logistics facilities. This supports efficient supply chain operations and makes it an attractive location for industrial activities. Singapore’s government also actively supports industrial development through incentives, grants, and initiatives aimed at fostering innovation, research, and development, attracting companies to establish a presence or expand their operations in the country.
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