Singapore is a top investment destination even as the global economy continues to grapple with uncertainties. A trade war between the U.S and China as well as Brexit uncertainty are some of the headwinds that continue to have an impact on the markets.
Amidst the turmoil, now may be the best time to explore opportunities in the financial markets. Singapore’s economy is growing at an impressive rate even as other economic powerhouses continue to experience a slowdown.
One way of taking advantage of the island nation economic growth and stability, is investing in exchange-traded Funds. Singapore being a hub of everything also plays host to some of the best performing exchange-traded funds in the world. Over the years, the ETFs have generated significant returns and rewarded investors with bumper dividend payouts.
Below are the top ETFs to watch out for heading into 2019.
SPDR STI ETF
SPDR STI ETF tops the list as one of the best ETFs, for gaining exposure into Singapore’s economy. The ETF tries to replicate the performance of the Straits Times Index that lists the biggest companies in the country.
Heading into 2019, SPDR STI ETF should be a top pick for income-focused investors. Since 2002, the ETF has rewarded investors with annualized returns of 3.8% excluding dividends. Addition of dividends takes the ETF’s return to 7%, one of the best in the industry. The ETF is ideal for investors who wish to double their money, every 10 years.
The ETF boasts of a 3 years annualized return of 11.8% and a 12-month dividend yield of 3.69%.
Philip SGX APAC Dividend Leaders REIT ETF
Investors eyeing opportunities in Singapore booming real estate should take a look at Philip SGX APAC Dividend Leaders REIT ETF. The ETF provides investors with an opportunity to bet on properties in three countries. Australia properties account for 59% of the ETF portfolio followed by Singapore at 30% and Hong Kong at 11%.
Philip SGX APAC Dividend Leaders REIT ETF tracks the performance of REITs in the three countries. Some of the REITs included in the ETF include Ascendas REIT as well A Mappletree. The ETF also boasts of one of the lowest expense ratio in the sector at 0.3%. Since inception, the ET has rewarded investors with returns of as much as 5.02%.
Nikko AM Singapore
Nikko AM Singapore is a low-cost Exchange traded fund. The fund seeks to replicate the performance of the FTSE Strait Times Index. The ETF invests all or part of its assets in Index shares. The ETF is ideal for investors looking to take advantage of capital gains as well as dividend distributions.
The ETF boasts of an expense ratio of 0.35%. For investors eyeing opportunities in the ETF space, this should be a top pick as it has returned an average of 11.65% over the past three years. Nikko AM Singapore also boasts of a 12-month dividend yield of 3.50%.
Ishares MSCI Singapore ETF
Incorporated in the U.S, Ishares MSCI Singapore ETF is an ETF that seeks to provide investment opportunities in Singapore economy. The ETF tracks the performance of the MSCI Singapore that measures the performance of large and mid-cap companies.
The ETF is ideal for investors looking to gain exposure to Singapore’s financial, Industrial and real estate sector. The ETF boasts of a 3 year annualized return of 48.8%, one of the highest in the industry. Its five years annualized return stands at 26.50%. When it comes to dividend returns, the ETF boasts of a 12-month yield of 5.08%.
Global X FTSE Southeast Asia ETF
Unlike other ETF’s, Global X FTSE Southeast Asia ETF IS an ideal play for gaining exposure to some of the biggest economies in the region. The ETF provides broad exposure to stocks in five countries mainly Singapore, which accounts for 30%, Thailand 22%, Malaysia 21%, Indonesia 19%, and Philippines 6%.
Some of the biggest holdings in the ETF include DBS Group, Overseas Chinese Banking Ltd and United Overseas Bank Ltd. The ETF is an ideal pick as Singapore’s GDP continues to inch higher given that the country’s stocks account for a huge stake. The ETF has an annual turnover of 8% as well as a 1.17% trailing twelve months yield.
SPDR Gold Shares ETF
In times of uncertainty, amidst spiraling trade tensions and economic uncertainty, gold tends to perform exceptionally well as an investment. One of the best ways to invest in gold bullion is through an ETF. SPDR Gold Shares should be an ideal give its record of accomplishment on capital gains.
SPDR Gold Shares ETF tries to replicate the performance of gold bullion in the market, less expenses. The ETF holds gold bars and then issues Baskets in exchange for deposits of gold from time to time. Thanks to Gold impressive performance in recent years, the ETF has performed exceptionally well, a trend poised to continue heading into 2019.
The ETF boasts of a 3 years annualized return of 10%
Xtrackers MSCI Singapore UCITS ETF
Xtrackers MSCI Singapore UCITS ETF is another must watch ETF in 2019. The ETF seeks to provide investors with exposure to Singapore’s growth trajectory. The ETF tries to replicate the performance of MSCI Singapore Investable Total Return Net Index
The index comprises of large, medium and small-sized companies that boast of high returns relative to the company’s assets and available shares. Some of the big names that the ETF tracks include Keppel Corp, CapitaLand, and Ascendas REIT.
Xtrackers MSCI Singapore UCITS ETF boasts of a 3 year annualized return of 13.43%. Heading into 2019 this is perfect ETF for investors looking to take advantage of Singapore’s long-term economic growth.
ABF Singapore ETF is for investors that would wish to participate in Singapore’s bond market in 2019. The index tries to replicate the performance of the iBoxx Singapore Bond Index. Known for consistent and stable returns the ETF tracks AAA-rated investments with an average yield of 2.08%. Given its low risk, profile the ETF boasts a 3-year annualized return of 4%.
(By Neha Gupta)