How To Buy ETF in Singapore?

Index funds or ETFs track the performance of a market index and as an investor, you get to enjoy ease, flexibility, and liquidity while ensuring that your investments grow steadily.

Singapore investors may want to invest in the Singapore market through the Straits Times Index ETF or the US market through the S&P 500 ETF.

In this guide on how to buy ETFs in Singapore, I share how to buy ETF in Singapore, the most popular ETFs to consider and much more.

What is an ETF?

An Exchange Traded Fund (ETF) is a basket of securities. It trades on an exchange, just like a stock where prices fluctuate when the stock market is open.

You’d probably heard of index funds like the STI ETF which tracks Singapore’s Straits Times Index (STI) and the SPDR S&P 500 ETF (SPY) which tracks the S&P 500 Index.

Top 10 Best ETFs In Singapore

Did you know that in Singapore, there are 52 ETFs listed on the SGX! With so many options out there, where should you start? We list 10 Best ETFs in Singapore for your consideration:

	ETF in Singapore	Stock Code	What it tracks	Expense Ratio	Past 5 year returns	Dividend Yield
1	SPDR Strait Times Index ETF	ES3	Top 30 companies listed on SGX, by market cap	0.30%	27.69%	2.49%
2	Nikko AM Singapore STI ETF	G3B	Top 30 companies listed on SGX, by market cap	0.30%	27.09%	1.50%
3	Xtrackers MSCI Singapore UCI	O9A	Top big and mid-cap companies listed on SGX	0.50%	28.88%	nil
4	ABF Singapore Bond Index Fund	A35	Singapore Government Bonds	0.24%	13.74%	2.20%
5	SPDR S&P 500 ETF	S27	Top 500 companies listed in the US, by market cap	0.09%	116.90%	1.30%
6	Lion Phillip S-REIT ETF	CLR	High dividend Singapore REITs	0.60%	no data	4.78%
7	Nikko AM-StraitsTrading Asia ex Japan REIT ETF	CFA	High dividend Asia REITs, excluding Japan	0.60%	no data	0.28%
8	Phillip Sing Income ETF	OVQ	Top 30 dividend stocks in Singapore	0.75%	no data	2.89%
9	SPDR Gold Shares ETF	O87	Gold Bullion Price (in USD)	0.40%	43.64%	nil
10	Nikko AM SGD Investment Grade Corporate Bond ETF	MBH	non-government investment-grade bonds (SGD)	0.25%	no data	2.77%

1. SPDR Strait Times Index ETF (ES3)

Managed by State Street Global Advisors (SSGA), the SPDR STI ETF tracks the performance of the Straits Times Index (STI), a market capitalization weighted index tracking the performance of the top 30 companies listed on the Singapore Exchange (SGX).

It provides exposure to the biggest stocks listed in Singapore. Some sectors include Telecommunications, Oil and Gas, Financials, and Consumer Services to name a few. 

If you are new to investing, this ETF is a good way to start with. Plus, you’ll find its basket of stocks familiar. This could give you the confidence to start investing your money while keeping you from being overwhelmed with the deeper mechanics to analyzing individual businesses.

You may want to note that although all the stocks in the STI are listed in Singapore, their core business may not be limited to the country. 

But wait there’s more:

2. Nikko AM Singapore STI ETF (G3B)

Nikko Asset Management offers its version of the STI ETF. Like its SPRD counterpart, the Nikko AM Singapore STI aims to replicate the Strait Times Index that tracks the top ranking companies in Singapore. It helps you purchase shares from blue chip companies in Singapore that are familiar to you giving a sense of security.

It was launched 7 years after the SPDR ETF, hence it is no surprise that the Nikko AM STI ETF has a smaller Assets Under Management (AUM).

It offers the same low expense ratio of just 0.30% per year and offers a lower tracking error of 0.17% at the point of writing. (Comparatively, SPDR STI ETF has a tracking error of 0.29%).

3. Xtrackers MSCI Singapore UCITS ETF (O9A)

The MSCI Singapore Index was created to track the performance of the Singapore market’s big and mid-cap companies. The index currently holds 19 stocks which are decided according to the MSCI Global Investable Market Indexes (GIMI) Methodology.

The MSCI Singapore ETF provides a good alternative to the STI ETF, which could give investors exposures to faster growing mid-cap and growth companies in Singapore. Given the current market, these companies could contribute to greater growth in the coming years, I shared some of my personal thoughts on Facebook.

We compared the differences between the STI ETF and the MSCI Singapore ETF in greater detail here.

There are two versions of the ETF – the iShares MSCI Singapore ETF (NYSEARCA: EWS) listed in US and the Xtrackers MSCI Singapore UCITS ETF (SGX:O9A) listed in SG.

4. ABF Singapore Bond Index Fund (A35)

The ABF Singapore Bond Index Fund is one of the biggest and earliest ETF on Singapore stock exchange. It gives investors exposure to bonds by investing in the constituents of the iBoxx ABF Singapore Bond Index which tracks high-quality Singapore government bonds as well as bonds from quasi-Singapore government entities like Temasek and HDB.

Throughout the years it has been growing strong and steady, which makes it among the most successful ones. It currently has an Assets Under Management (AUM) of S$983 million as of 31 Mar 2021. 

At first glance, like many of us, it is discouraging to purchase from this ETF especially for the new players as the figures look very intimidating. But, because it is an established ETF, it is low cost and less risky, which is shown by its recorded success each year since it was created. 

5. SPDR S&P 500 ETF (S27)

Warren Buffett said that ““For most people, the best thing to do is to own the S&P 500 index fund.” The first three ETFs gives you exposure to the Singapore market. But what if you would like to own part of the biggest companies in the world?

At the point of writing, most of them are listed in the United States, and many are part of the S&P 500 index.

The SPDR S&P 500 ETF is very similar to the SPDR STI ETF, except that it the S&P 500 index. The S&P 500 Index consists of the top 500 stocks listed in the American Stock Market. These companies are well diversified across different sectors with information and technology the leading industry, followed by financials, health care, energy and real estate among many. 

The ETF is listed in SGX under the ticker S27. This means you can easily invest in the US markets through your local broker and enjoy the growth without having to understand macroeconomics, business fundamentals and so much more. 

You do not need to have a US trading account to get exposure to the S&P500! 

6. Lion Phillip S-REIT ETF (CLR)

REITs are popular investing tools because of their regular (and often high) dividend payouts. But not all REITs are safe, Covid has demonstrated the weakness of retail REITs in 2020. 

The Lion Phillip SREIT ETF gives investors exposure to high quality S-REITs. It aims to replicate the MorningStar Singapore REIT Yield Focus Index. MorningStar is a Chicago-based investment research firm, they are best known for their investment research.

As an investor, you’ll get the best of both worlds – exposure to a well balanced SREIT portfolio while collecting dividends. In 2020, this ETF’s dividend yield is one of the highest at 6%.

REITs are popular investing tools because of their regular (and often high) dividend payouts. But not all REITs are safe, Covid has demonstrated the weakness of retail REITs in 2020. 

7. Nikko AM-StraitsTrading Asia ex Japan REIT ETF (CFA)

For investors who want exposure to REITs in Asia, the Nikko AM Asia ex Japan REIT ETF is another good option. 

As of March 2021, the geographic breakdown of its assets are as follow:

• Singapore (46%)
• Global/Asia (23%)
• Hong Kong (17%)
• China (5%)
• Malaysia (4%)
• India (4%)
• Thailand (1%)

You can also be sure of its diversity across sub-industries as you get exposure to Retail REITs, Diversified REITs, Industrial REITs, Office REITs, Specialised REITs, Hotel & Resort REITs, and Heathcare REITs.

This ETF provides a dividend yield of about 5% and gives investors a rather good diversification of REITs across APAC nations.

8. Phillip Sing Income ETF (OVQ)

REITs are great because they have to payout a certain amount of their revenue as dividends. But what if you want to diversify beyond real estate? 

The Phillip Sing Income ETF uses the factor based approach to pick the top 30 dividend stocks in Singapore. According to their product sheet, they track the MorningStar Singapore Yield Focus Index that selects stocks based on Business Quality, Financial Health, Dividend Yield. 

The latest estimated dividend yield is about 5%. This ETF has an expense ratio of 0.7% per annum.

You get exposure to sectors like financial services (39.1%), REITs (17.5%), Industrials (16.6%), Telecommunications (16%), Consumer (7.4%) and others (2.4%).

9. SPDR Gold Shares ETF (O87)

It might not have crossed your mind, but you can get also gain exposure to other asset classes through ETF investments.

A popular asset class is gold. The SPDR Gold Shares ETF is listed in the Singapore Stock Exchange and lets you enter the gold market easily. As of July 2020, this gold ETF is the most traded ETF in SGX.

This ETF was designed to provide investors with an easier way to invest in gold as an alternative asset class. It tracks the price of gold bullion by holding actual gold bars.

The Trust purchases gold bars which are held and stored in their London vault or a sub-custodian’s vault. You don’t have to worry about buying, storing and selling the physical gold bullion.

All that time and effort is saved for a paltry expense ratio of 0.4%.

10. Nikko AM SGD Investment Grade Corporate Bond ETF (MBH)

For most investors, the ABF Bond ETF is more than sufficient. However for the ambitious investors who crave for higher returns, the Nikko AM SGD Investment Grade Corporate Bond ETF may be something you’d like to look into.

It benchmarks against the iBoxx SGD Non-Sovereigns Large Cap Investment Grade Index which tracks the performance of SGD denominated non-government investment-grade bonds. These tend to come with a higher risk level, in return for higher potential yields.

It is a rather small ETF with a fund size of S$603.31M (as of Jun 2021), since its inception, it has provided shareholders with a 3.69% return.

How To Buy ETF in Singapore?

It is easy to invest in ETFs as the process is very similar to investing in stocks.

Step #1: Open a brokerage account

Your broker will be the middleman to fulfilling your buy and sell orders. You’ll want to look for brokerages that give you access to ETFs.

For more, refer to our comparison of the best brokerages in Singapore.

Step 2: Decide on the ETFs you want to buy

You should select ETFs depending on your investing goals and beliefs. 

If you’re looking to invest in the Singapore Market, you can consider the STI ETF. If you’re looking to invest in the S&P 500, look into the S&P500 ETFs.

Another common reason investors use ETF is to invest on specific themes. We covered the best ETFs across various investing themes, sectors and markets, you can read about them here: 

• Best China ETFs
• Best UK ETFs
• Best World ETFs
• Best Fintech ETFs
• Best Cybersecurity ETFs
• Best Semiconductor ETFs
• Best Commodity ETFs

Step 3: Buy the ETFs

Don’t try to time the market. Decide on the ETFs you’re interested in, buy them and start putting your money to work.

There are two common ways to do so:

i) Lump Sum Investing aka just buy

Simply log into your brokerage account, fund it with your investment capital and place an order for the ETF of your choice.

ii) Dollar cost average

If you don’t have a large capital to start with, or wish to grow your portfolio with regular cash injections, you can consider dollar cost averaging. This means you buy the ETF at regular intervals, using a fixed amount of capital each time you buy.

Brokers offer an easy solution for this via their Regular Savings Plan (RSP). Most RSP allow you set a buy order for the popular ETFs on a regular frequency, so you can set and forget while your money grows.

Here’s a quick guide on Dollar Cost Averaging vs Lump Sum Investing

Conclusion

This guide has given you the know how to start buying ETFs in Singapore. As you become a better and more confident investor, you may want to expand your ETF portfolio. If so, continue on to this ETF Investing Guide.

And if you wish to beat the market by picking your own stocks, we share how we invest in our Factor investing guide.

FAQ

What is the average Singapore ETF Returns?

This varies widely depending on your portfolio of ETFs.

Based on ETF data provided by SGX, the average past 5 year return of Singapore ETFs is about 36%.

The Top 3 best performing ETFs (past 5 year returns) are:

1. GLD SG$ (GSD): +43.64%
2. Phillip SGX APAC Dividend Leaders REIT ETF USD (BYI): +33.66%
3. STI ETF (ES9): +27.69%

And the Top 3 best yielding ETFs are

1. Lion Phillip S-REIT ETF (4.78%),
2. CIMB S&P Ethical Asia Pacific Dividend ETF(4.1%) and
3. Phillip SGX APAC Dividend Leaders REIT ETF (3.05%)

How do I buy S&P 500 ETF in Singapore?

There are many variations of the S&P500 ETF. The one listed on the Singapore Exchange (SGX) is the SPDR S&P 500 ETF (SGX:S27). You can buy the S&P500 ETF through your broker. Here’s a guide on how to invest in the S&P500 in Singapore.

Does an ETF pay dividends in Singapore?

In general, yes. When an ETF owns dividend stocks, they’ll collect the full dividends from each stock and distribute it to the ETF shareholders. You can choose to receive your dividends in cash or reinvest them.