• Attributed to the debut of five new ETFs, Singapore-listed ETFs booked combined net fund flows of S$328 million for the year, with mixed returns across the 40 ETFs, reducing their combined AUM to S$11.3 billion, from S$12.6 billion at the end of 2021.
   
• The asset class that saw the most net fund outflows across the Singapore-listed ETFs in 2022 included China RMB Bonds, Gold and Singapore Equities, while APAC Equities, China Equities and Asia USD Bonds booked the most fund inflows. Four of the 40 ETFs finished 2022 with AUM in excess of S$1 billion.
   
• Net fund flows are derived from the balance of ETF unit creation and redemption. For the 2022 year, the SGX-listed ETF booked a total of S$3.0 billion in unit creation and S$2.7 billion in unit redemption, indicative of rotational trading amid the global and regional outlooks for growth, trade and inflation.
   

For Singapore-listed ETFs, the STI remained the most traded index among ETF investors in 2022, with the two STI tracking ETFs recording a combined trading turnover of S$1.1 billion in 2022. The SPDR STI ETF STI reached its 20 year trading milestone in April 2022 and since inception has paid investors an annual total return of 6.3%. The two STI ETFs have also proved a popular investing medium amid the market volatility of recent years with the combined AUM of the two STI ETFs reaching S$1.0 billion in July 2019, and more than doubling to S$2.2 billion in December 2022.

STI ETF primary market unit creations and redemptions crossed S$550 million in 2022, with the STI also ranking among the strongest performing benchmarks in 2022, as discussed here. For the 2022 year, the broader suite of 40 SGX-listed ETFs booked a total of S$3.0 billion in unit creation and S$2.7 billion in unit redemption, indicative of rotations on the fluid outlook for growth, inflation, and interest rates, in addition to the gradual widening scope of SGX-listed ETFs across local and regional Equity, Bond and REIT markets.  

With the new ETF offerings, the AUM of all ETFs listed for trading on SGX has doubled over the past three years, while the ETF AUM associated with Supplementary Retirement Scheme (SRS) investing has more than doubled to S$376 million. The three ETFs resonating mostly with SRS investors are the STI ETFs and the Lion-OCBC Securities Hang Seng Tech ETF. The three ETFs accounted for 68% of the S$408 million of SRS ETF AUM as Dec 2022. ETFs currently now make up 10% of combined retail Collective Investment Schemes in Singapore.

 These ETFs also resonated with active investors in 2022, with the two STI ETFs and the Lion-OCBC Securities Hang Seng Tech ETF contributing 40% to the combined trading turnover of all Singapore-listed ETFs for the year. For active portfolio managers, the dispersion of returns of the STI and Hang Seng TECH Index in 2022 was evident with 120D rolling correlation coefficients ranging from 0.29 to 0.50. On 4 Jan, the price ratio spread of the SPDR STI ETF to the Lion-OCBC Securities Hang Seng Tech ETF moved to below the 12-month mean, after rising to two standard deviations above the mean in mid-March, and late-October last year.

The ongoing global trend of turning Mutual Fund AUM to ETF AUM continued in 2022, with flows into ETFs outpacing mutual funds every month through November as prepared by ETF Stream, which also noted a notable trend was the resilience of the appetite for ESG ETFs in Europe.
 

Climate Change Impact a Key Theme for New ETFs Offerings

In 2022, SGX welcomed the launch of four sustainability-linked ETFs which include three new listings and one index change for existing ETF. The three new listings that offer investors sustainability-linked exposure include NikkoAM-Straits Trading MSCI China Electric Vehicles & Future Mobility ETF, Lion-OCBC Securities Singapore Low Carbon ETF and CSOP CGS-CIMB APAC Low Carbon Index ETF. In December 2022, the iShares MSCI India Index ETF listed since 2006 start tracking a Climate Transition Benchmark - MSCI India ESG Enhanced Focus CTB Select Index and is the first sustainable ETF with a climate objective based on Indian equities.

As part of SZSE-SGX ETF product link, SGX also welcomed two new China thematic ETFs that invests into companies listed on the ChiNext market of Shanghai Stock Exchange (SZSE) and STAR market of Shanghai Stock Exchange (SSE). This includes the launch of UOBAM Ping An ChiNext ETF that tracks the performance of top 100 companies listed on ChiNext market and CSOP CSI STAR and ChiNext 50 Index ETF that tracks the performance of top 50 companies listed on ChiNext and STAR market. Since inception, the two ETFs have recorded total returns of 5.13% and 5.02% respectively, riding on optimism about an end to Covid restrictions in China. See here for more information on launch of SZSE-SGX ETF link.

The full suite of ETFs are tabled below, sort by total returns for ETFs listed for the duration of 2022.

Source: SGX, Bloomberg (Data as of 31 Dec 2022). Total Returns information not available for ETFs listed <1 Year

Note:

¹Newly launched ETFs and fund classes in 2022.

²Unlike conventional ETFs, Leveraged and Inverse (L&I) products aim to track a multiple or opposite of the daily return of its underlying Index.