• Combined AUM of the 30 Singapore-listed ETFs has grown by 12% in the 1H21 to 11 June, to S$9.6 billion. Fixed Income ETFs represent 47% of the combined AUM, (from 46% in Dec 2020) with REITs representing 6% (from 5%) and Gold representing 16% (from 18%), while Equity ETFs continue to represent 31% of the combined AUM.
   
• Singapore’s Fixed Income ETFs have been recipient to the most inflows in the 2021 year to 11 June, with the eight ETFs seeing combined net inflows of S$573.1 million, led by inflows to the ICBC CSOP FTSE Chinese Government Bond ETF and the iShares Barclays USD Asia High Yield Bond Index ETF.
   
• The 10 strongest performing ETFs in the 2021 year to 11 June, have all been Equity ETFs, led by the Xtrackers FTSE Vietnam Swap UCITS ETF. Resilient investment into 2021 has also been a key driver of the global equity markets, with global bank stocks outpacing semiconductor stocks, in addition to materials and resources stocks. 

Exchange Traded Funds (“ETFs”) have continued to serve as an effective means for portfolio managers seeking speedy and cost-effective broad index exposures in 1H21. Last week, at the BlackRock Investor Day 2021, the Investor Manager estimated that total, global ETF Assets Under Management (“AUM”) would grow from US$8 trillion in 2020 to US$15 trillion in 2025 (click here for more). In the 1H21 to 11 June, the combined Assets under Management (“AUM”) of all ETFs listed in Singapore has increased 12% from S$8.6 billion at the end of 2020 to S$9.6 billion as of 11 June. This follows on from the significant 57% AUM growth during 2020.

Singapore lists 30 ETFs across four major asset types – Fixed Income, Equities, Gold and REITs. As illustrated below, AUM growth has been observed across all asset classes with the exception of Gold in the 1H21 to 21 June. With the SPDR Goldshares ETF share in the combined S$9.6 billion AUM declining by 2% in the 1H21 to 11 June, the REIT ETFs and Fixed Income ETFs have both increased their share in the combined ETF AUM.

Singapore’s Fixed Income ETFs have been recipient to the most inflows in the 2021 year to 11 June, with the eight ETFs seeing combined net inflows of S$573.1 million. The Fixed Income inflows were led by the ICBC CSOP FTSE Chinese Government Bond ETF and the iShares Barclays USD Asia High Yield Bond Index ETF which were recipients of inflows of S$335.5 million and S$152.1 million respectively. As discussed here, the ICBC CSOP FTSE Chinese Government Bond ETF USD counter (CYB) delivered a 4.1%  return in the 2021 year to 11 June, with the SGD counter (CYC) delivering a similar 3.8% return. 

Leading the Inflows for the 18 Equity ETFs, the Lion-OCBC Securities Hang Seng TECH ETF saw inflows of S$150.9 million, the Nikko AM Singapore STI ETF saw inflows of S$41.0 million and the Xtrackers MSCI China UCITS ETF saw inflows of S$14.8 million. The trio of REIT ETFs was recipient to S$112.3 million in inflows, with the Nikko AM- Straits Trading Asia ex Japan REIT ETF recipient to S$82.4 million in inflows.

ETF Inflows are generally resulted from primary market creation of ETF units by the participating dealers to meet the excess demand from institutional and retail investors for the ETFs on the secondary market (i.e. the exchange). Outflows, on the other hand, are resulted from primary market redemption due to selling activities of institutional and retail investors in the market.

The 10 strongest performing ETFs in the 2021 year to 11 June, have all been Equity ETFs. The 10 ETFs averaged a 13.4% total return over the first 23 weeks of 2021. As tabled below, the Xtrackers FTSE Vietnam Swap UCITS ETF and Lyxor MSCI India UCITS ETF - Acc USD both generated the strongest gains over the period at 21.7% and 14.9% respectively.  Resilient investment into 2021 has also been a key driver of the global equity markets, with global bank stocks outpacing semiconductor stocks, in addition to materials and resources stocks. 

Source: SGX, Refinitiv, Bloomberg (Data as of 11 June 2021)

As tabled above, the five most traded of the 30 Singapore listed ETFs included the  SPDR® Straits Times Index ETF, the SPDR Goldshares ETF, the Lion-OCBC Securities Hang Seng TECH ETF, the Nikko AM Singapore STI ETF and the Nikko AM-Straits Trading Asia ex Japan REIT ETF. At 4.1%, the Nikko AM-Straits Trading Asia ex Japan REIT ETF also maintains the third highest indicative dividend yield of the 30 ETFs as tabled below.

 Source: SGX, Refinitiv, Bloomberg (Data as of 11 June 2021)

The iShares Barclays USD Asia High Yield Bond Index ETF, Lion-Phillip S-REIT ETF, Nikko AM- Straits Trading Asia ex Japan REIT ETF, Principal FTSE ASEAN40 ETF and Phillip Sing Income ETF currently maintain the highest indicated dividend yields.

Investing in ETFs

ETFs are investment funds listed and traded intraday on a stock exchange. The majority aim to track the performance of an index and provide access to a wide variety of markets and asset classes, including local stocks, international securities, bonds, commodities or money markets.

Each ETF gives investors access to the performance of the asset that comprises the underlying index. Investing in the ETF is also less costly if one was to build a similar portfolio by buying the individual stocks. It also provides exposure to international markets and asset classes that may be inaccessible to individual investors.

To find out more about ETFs, click here.