NikkoAM will be launching a new REIT ETF on SGX. The new REIT ETF named Nikko AM-Straits Trading ex-Japan REIT ETF is set to list on 29th March 2017.
If you’d like to invest in REITs but are too busy to analyse individual REITs, this could suit you. But before you jump into it, let’s take a look at its features:
Key features of the Nikko AM-Straits Trading ex-Japan REIT ETF
The investment objective of the ETF is to replicate as closely as possible, before expenses, the performance of the FTSE EPRA/NAREIT Asia ex-Japan NET Total Return REIT Index, or a similar index that gives, in the opinion of the Manager, the same or substantially similar exposure as to the Index. (The Manager would have to release a 3 months’prior written notice to the trustee and the holders should they decide to make a change in the underlying index)
What makes up the FTSE EPRA/NAREIT Asia ex Japan Net Total Return REIT Index?
As of 30th November 2016, the underlying index would expose investors to the following:
Index constituents selection method
The constituents were shortlisted after being screened for size and liquidity, Currently, Singapore REITs make up 14 of its 23 constituents.
The forward 12-month gross dividend yield for these 23 REITs according to Bloomberg data is 6.11 per cent. After subtracting about 0.6% of the expense ratio and 17% of the withholding tax on the dividend received, the distribution will be around 5%.
Do take note that the dividend is not guaranteed and the fund’s plan to distribute the dividend on the quarterly basis.
Top 10 largest constituent securities for the underlying index as at 31st January 2017:
As compared to the previous REIT ETF managed by Phillip Capital, the NikkoAM REIT ETF has a larger exposure to Singapore REITs.
However due to the business nature of the constituent REITs, the NikkoAM REIT ETF is not solely focused on the Singapore market. It is also exposed to the overseas REITs market.
You can consider this ETF if your portfolio do not have much exposure to REIT currently and you would like to gain some exposure in the REITs sector.
Do take note that all of the above information are the summary and my personal opinion. This is not constitute to financial advise of any form. You are advised to read the brochure, prospectus and product highlight sheet before you decided to invest.
- Subscription details:
- Indicative timetable: subscription from 6th March to 3pm 20th March, listing on 29th March 2017
- IPO price SGD 1.00 per unit
- Useful links:
Louis Koay is a dual-licensed representative at a top financial firm. He graduated from the National University of Singapore with First Class Honours and he is a CFA charterholder as well as a Certified Financial Planner. He is currently managing a team of 6 advisors and servicing more than 1,000 clients with asset under advisory of more than $20 million. As a trainer at Dr Wealth, Louis developed the Personal Finance Mastery Course and he is a key trainer in the Intelligent Investors Immersive Program. He has trained more than 10,000 retail investors in analysing stocks and on personal financial planning.