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OCBC Securities and Lion Global Investors to list Lion-OCBC Securities APAC Financials Dividend Plus ETF in May

Felicia Tan
·3-min read

This will be the OCBC Group’s fourth ETF in less than four years.

OCBC Securities and Lion Global Investors (LGI) will list the Lion-OCBC Securities APAC Financials Dividend Plus Exchange Traded Fund (ETF) on the Singapore Exchange S68 (SGX) on May 13.

This will be Oversea-Chinese Banking Corporation’s (OCBC) fourth ETF in less than four years after the Lion-OCBC Securities Hang Seng TECH ETF, Lion-OCBC Securities China Leaders ETF and Lion-OCBC Securities Singapore Low Carbon ETF.

The latest collaboration between OCBC Securities and LGI tracks the iEdge APAC Financials Dividend Plus Index. The index, which follows the performance of financial services companies in Asia Pacific (APAC), includes 30 of the largest and most tradeable APAC financial institutions by free-float market capitalisation. The index is rebalanced on a semi-annual basis.

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Singapore’s three local banks, DBS, OCBC and United Overseas Bank U11 (UOB)  are index constituents with other notable names including Commonwealth Bank of Australia, KB Financial Group, China Construction Bank, Sumitomo Mitsu Financial Group and Public Bank.

According to OCBC, the newest ETF will distribute a minimum dividend payout of 5% per annum. The percentage will be based on the issue price for the first two years. The dividend will be distributed on a quarterly basis.

The bank adds that the ETF holds “strong capital gain potential” as APAC financial services companies are poised to benefit from Asia’s growth story and resilience.

Referring to a report by the Deloitte Center for Financial Services, global wealth is projected to exceed US$500 trillion ($676.57 trillion) by 2024. The APAC region is said to account for over 40% of these funds with APAC’s financial services companies expected to benefit from the growth.

The initial offer period (IOP) for this ETF begins on April 11 and will end on May 3.

When listed, it will be available in Singapore dollar (SGD) and US dollar (USD) denominations under the SGX tickers YLD and YLU respectively.

“Despite the challenges faced by Asian markets in 2023, such as high interest rates, inflation, and China's sluggish economy, this year holds promise in financial markets. To enable investors to capitalise on these prospects and tap into key investment opportunities in the region, we have introduced the Lion-OCBC Securities APAC Financials Dividend Plus ETF,” says Wilson He, managing director of OCBC Securities.

“We expect this ETF to be well received because of its unique proposition – stable dividends, combined with the good growth prospects that stem from its APAC focus. Moreover, ETFs have long been popular among our customers at OCBC Securities. Income focused investors will find this ETF particularly attractive,” he adds. “This innovative ETF is the result of yet another strong collaboration between OCBC Securities and Lion Global Investors. Given that we are both part of OCBC Group, the objective of our collaboration has always been to bring the global markets to local investors. This marks the fourth ETF that we will be listing on the SGX, and we are confident that it will mirror the success of the previous three ETFs.”

Teo Joo Wah, CEO of Lion Global Investors, said that the Lion-OCBC Securities APAC Financials Dividend Plus ETF provides investors quick and easy access to a basket of high dividend yielding financial stocks in APAC.

“We know that investors are now weighing their investment options more than ever, amid the rising inflation and changing investment landscape. The launch of this ETF is a testament of LGI’s commitment to bring innovative and cost-effective ETF solutions to meet the evolving and diverse needs of investors,” he adds.

“The Lion-OCBC Securities APAC Financials Dividend Plus ETF is a good building block for yield seeking investors and is an important addition to LGI’s shelf of ETF products,” he continues.

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