The combined assets under management (AUM) of the 5 Reit exchange-traded funds (ETFs) listed on the SGX  has doubled in 2 years, from S$455 million in August 2020 to S$901 million in mid-September 2022. At over S$900 million, S-Reit ETFs represent more than half the S$1.7 billion combined AUM of Reit ETFs in Asia-Pacific ex-Japan globally.

The 5 Reit ETFs listed in Singapore (in order of AUM size) are NikkoAM-StraitsTrading Asia Ex Japan Reit ETF, Lion-Phillip S-Reit ETF, UOB Asia-Pacific Green Reit ETF, CSOP iEdge S-Reit Leaders ETF, and Phillip SGX APAC Dividend Leaders Reit ETF.

Retail investors have been a key driver in the locally-listed Reit ETFs for the past year, accounting for 44 per cent of Reit ETF holdings. Institutional investors make up the other 56 per cent of Reit ETF holdings. Retail investors bought over S$1 billion worth of S-Reits in 2021 and continued to deploy funds into the sector, with net inflows exceeding S$930 million in mid-September 2022. Net buy/sell amount is derived by subtracting total sell amount from total buy amount.

Despite generating average total returns of -6.8 per cent in the first 8 months of 2022, the 5 Reit ETFs recorded net inflows of S$163 million in the year to date thus far. The Lion-Phillip S-Reit ETF has been the best performer over the first 8 months of 2022 with total returns of -3.53 per cent and has the highest dividend yield of 5.04 per cent. During the same period, the FTSE EPRA Nareit Developed Index (a benchmark for global Reits) posted a price decline of 18.5 per cent.

After Lion-Phillip S-Reit ETF, the CSOP iEdge S-Reit Leaders ETF was the second-highest yielding Reit ETF with a dividend yield of 4.97 per cent, followed by the NikkoAM-StraitsTrading Asia Ex Japan Reit ETF at 4.92 per cent.

The NikkoAM-StraitsTrading Asia ex-Japan Reit ETF and Lion-Phillip S-Reit ETF are among the top 10 ETFs listed on SGX by trading turnover and by net inflows.

Reit ETFs provide investors instant diversification across various sub-sectors and geographical regions at lower execution costs as opposed to building a similar portfolio through investing in individual Reits. Aside from direct cash investments, retail investors may also invest in Singapore-listed Reit ETFs via the Supplementary Retirement Scheme (SRS) and the CPF investment scheme (CPFIS).

REIT Watch is a weekly column on The Business Times, read the original version