Hot on the heels of the listing of Singapore’s fourth REIT ETF, local lender United Overseas Bank Ltd (SGX: U11), or UOB, has announced a fifth.
On 23 November, the UOB APAC Green REIT ETF (SGX: GRN) will start trading on the Singapore Exchange (SGX: S68).
Investors interested in sustainable investing should take note.
This ETF is the first Asia-Pacific Green REIT ETF, and its constituents are weighted according to scores on environmental performance indicators.
But before you buy, here are 10 key facts you should know. (figures are as of 30 September 2021, unless otherwise stated).
The ETF aims to replicate the iEdge-UOB APAC Yield Focus Green REIT Index. The index tracks and selects constituents based on yields and environmental attributes.
Some of the environmental attributes assessed for constituents relate to energy usage, water consumption, waste management and building certifications. These ratings are performed by GRESB, a global ESG benchmark for real estate assets.
The index contains 50 stocks listed across the Asia-Pacific and Oceania regions.
Each constituent of the index has a weightage cap of 7%, and there is also a geographic cap of 40% weightage per country. However, these caps may be exceeded in between rebalancing periods due to market movements.
The index is rebalanced semi-annually, in March and September.
Scentre Group (ASX: SCG), an Australian real estate company, is the largest constituent of the index. It occupies a 7.45% position. The next two largest constituents, Dexus Property Group (ASX: DXS) and Mirvac Group (ASX: MGR) are also Australian property companies.
Japanese companies hold a 40% weight in the index, the highest after Australia (36%) and Singapore (16%).
In the last 10 years, the index delivered an annualized net return of 9.19% in Singapore-dollar terms.
The ETF currently charges a management fee of 0.45%, with the fees capped at 2.0% of the fund’s net asset value.
Distributions from the ETF are paid out quarterly, and the trailing 12-month dividend yield stands at 4.25%
Get Smart: The best of both worlds
With 50 constituents and a weightage cap of 7% per company, the UOB APAC Green REIT ETF offers investors the widest range of diversification amongst the five REIT ETFs available on the SGX.
For investors who prefer a hands-off approach, this could be an ideal instrument to invest in real estate.
By purchasing this ETF, you can be rest assured that your funds are invested in companies which help to promote environmental sustainability.
This means that you enjoy the best of both worlds, growing your money while helping to make the world a better place.
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Disclosure: Herman Ng does not own shares in any of the companies mentioned.
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