SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

NikkoAM-StraitsTrading Asia Ex Japan REIT ETF / Equity Bottom-Up

NikkoAM-StraitsTrading Asia Ex Japan REIT ETF

<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2021-05/Capture_28.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">SGX listed REITs ETF</div>

The&nbsp;ascent of passive investing saw assets under management (AUM) in pure Reit Exchange Traded Funds (ETFs) exceed US$40 billion globally. The combined AUM of Reit ETFs with exposure to Asia-Pacific ex-Japan was close to US$770 million as at end April 2021.
The two largest Reit ETFs across Asia-Pacific ex-Japan are listed on the Singapore Exchange (SGX) - NikkoAM-StraitsTrading Asia ex-Japan Reit ETF which tracks the FTSE EPRA Nareit Asia ex-Japan Reits 10% Capped Index and the Lion-Phillip S-Reit ETF which tracks the Morningstar Singapore Reit Yield Focus IndexSM.
SGX also lists a third Reit ETF - the Phillip SGX APAC Dividend Leaders Reit ETF which tracks the iEdge APAC ex-Japan Dividend Leaders Reit Index.
The combined AUM of the three SGX-Reit ETFs has seen a significant 41 per cent growth, from S$395 million in April 2020 to S$558 million in April 2021, making up more than half of the AUM in Reit ETFs with Asia-Pacific ex-Japan exposure globally. As of May 25, 2021, their combined AUM has risen further to S$571 million. Retail investors account for close to 40 per cent of all SGX listed Reit ETF holdings while the remaining 60 per cent are in the hands of institutional investors. Despite generating average year-to-date total returns of 2.5 per cent (as at May 25, 2021), compared to 11.6 per cent by the STI ETFs, the three Reit ETFs recorded net inflows of S$108.7 million. During the same period, the two ETFs which track the performance of the STI Index - SPDR Straits Times Index ETF and Nikko AM Singapore STI ETF - saw total net outflows of S$63 million instead, amid investor profit-taking. 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.
Due to its diversified nature, the best performing Reit ETF for the year was Phillip SGX APAC Dividend Leaders Reit ETF, which generated total returns of 5.8 per cent. It has more than 50 per cent geographical exposure to Australian Reits, 35 per cent to Singapore Reits, 13 per cent to Hong Kong Reits and one per cent to Thailand Reits.
The various underlying Reit markets - Hang Seng Reit Index (+9.8 per cent), ASX 200 A-Reit Index (+5.0 per cent) and iEdge SG S-Reit Index (+1.7 per cent) - saw varied total returns performance in the 2021 year-to-date.
Across the same period, the NikkoAM-StraitsTrading Asia ex-Japan Reit ETF (75 per cent in Singapore Reits and a combined 25 per cent exposure to the Hong Kong, Malaysia, India and Thailand Reit markets) and Lion-Phillip S-Reit ETF (100 per cent in Singapore Reits) generated total returns of 0.5 per cent and 1.1 per cent respectively, lagging behind the Phillip SGX APAC Dividend Leaders Reit ETF.
However, the NikkoAM-StraitsTrading Asia ex-Japan Reit ETF was the highest yielding Reit ETF among the three with 12 month gross dividend yield of 4.7 per cent compared to Lion-Phillip S-Reit ETF and Phillip SGX APAC Dividend Leaders Reit ETF at 4.2 per cent and 2.6 per cent respectively.
The NikkoAM-StraitsTrading Asia ex-Japan Reit ETF and Lion-Phillip S-Reit ETF are among the top 10 highest yielding ETFs listed on SGX. REIT Watch is a weekly column on The Business Times,&nbsp;<a href="https://www.businesstimes.com.sg/companies-markets/investors-continue-to-favour-reit-etfs" target="_blank" rel="noopener">read</a> the original version.


SGX listed REITs ETF

The&nbsp;ascent of passive investing saw assets under management (AUM) in pure Reit Exchange Traded Funds (ETFs) exceed US$40 billion globally. The combined AUM of Reit ETFs with exposure to Asia-Pacific ex-Japan was close to US$770 million as at end April 2021.
The two largest Reit ETFs across Asia-Pacific ex-Japan are listed on the Singapore Exchange (SGX) - NikkoAM-StraitsTrading Asia ex-Japan Reit ETF which tracks the FTSE EPRA Nareit Asia ex-Japan Reits 10% Capped Index and the Lion-Phillip S-Reit ETF which tracks the Morningstar Singapore Reit Yield Focus IndexSM.
SGX also lists a third Reit ETF - the Phillip SGX APAC Dividend Leaders Reit ETF which tracks the iEdge APAC ex-Japan Dividend Leaders Reit Index.
The combined AUM of the three SGX-Reit ETFs has seen a significant 41 per cent growth, from S$395 million in April 2020 to S$558 million in April 2021, making up more than half of the AUM in Reit ETFs with Asia-Pacific ex-Japan exposure globally.  As of May 25, 2021, their combined AUM has risen further to S$571 million. Retail investors account for close to 40 per cent of all SGX listed Reit ETF holdings while the remaining 60 per cent are in the hands of institutional investors. Despite generating average year-to-date total returns of 2.5 per cent (as at May 25, 2021), compared to 11.6 per cent by the STI ETFs, the three Reit ETFs recorded net inflows of S$108.7 million.  During the same period, the two ETFs which track the performance of the STI Index - SPDR Straits Times Index ETF and Nikko AM Singapore STI ETF - saw total net outflows of S$63 million instead, amid investor profit-taking. 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.
Due to its diversified nature, the best performing Reit ETF for the year was Phillip SGX APAC Dividend Leaders Reit ETF, which generated total returns of 5.8 per cent. It has more than 50 per cent geographical exposure to Australian Reits, 35 per cent to Singapore Reits, 13 per cent to Hong Kong Reits and one per cent to Thailand Reits.
The various underlying Reit markets - Hang Seng Reit Index (+9.8 per cent), ASX 200 A-Reit Index (+5.0 per cent) and iEdge SG S-Reit Index (+1.7 per cent) - saw varied total returns performance in the 2021 year-to-date.
Across the same period, the NikkoAM-StraitsTrading Asia ex-Japan Reit ETF (75 per cent in Singapore Reits and a combined 25 per cent exposure to the Hong Kong, Malaysia, India and Thailand Reit markets) and Lion-Phillip S-Reit ETF (100 per cent in Singapore Reits) generated total returns of 0.5 per cent and 1.1 per cent respectively, lagging behind the Phillip SGX APAC Dividend Leaders Reit ETF.
However, the NikkoAM-StraitsTrading Asia ex-Japan Reit ETF was the highest yielding Reit ETF among the three with 12 month gross dividend yield of 4.7 per cent compared to Lion-Phillip S-Reit ETF and Phillip SGX APAC Dividend Leaders Reit ETF at 4.2 per cent and 2.6 per cent respectively.
The NikkoAM-StraitsTrading Asia ex-Japan Reit ETF and Lion-Phillip S-Reit ETF are among the top 10 highest yielding ETFs listed on SGX.  REIT Watch is a weekly column on The Business Times,&nbsp;read the original version.

REIT Watch - Investors Continue to Favour Reit ETFs

iShares China CNY Bond UCITS ETF / Equity Bottom-Up

<ul>
<li>
Over the first four months of 2021 the Xtrackers FTSE Vietnam Swap UCITS ETF, SPDR S&amp;P 500 ETF, SPDR Straits Times Index ETF, SPDR Dow Jones Industrial Average ETF and Nikko AM Singapore STI ETF were the strongest performers of SGX’s suite of 30 ETFs, averaging 13% total returns.  </li>
<li>
Of the five ETFs that were recipient to the highest net inflows over the four months, three were Fixed Income ETFs:  the ICBC CSOP FTSE Chinese Government Bond ETF, the iShares Barclays USD Asia High Yield Bond Index ETF and the ABF Singapore Bond Index Fund, which saw S$285 million of combined net inflows, 58% of the total net inflows.   </li>
<li>Combined AUM of the 30 ETFs is S$9.2 billion, up from S$5.5 billion 12 months ago. Equity and REIT ETFs have continued to represent 40% of the combined AUM. However, the share of Fixed Income ETF AUM within the total AUM has grown from 34% to 46%, while the share of Gold ETF AUM has declined from 27% to 16%. </li>
</ul>



Over the first four months of 2021 the Xtrackers FTSE Vietnam Swap UCITS ETF, SPDR S&amp;P 500 ETF, SPDR Straits Times Index ETF, SPDR Dow Jones Industrial Average ETF and Nikko AM Singapore STI ETF were the strongest performers of SGX’s suite of 30 ETFs, averaging 13% total returns.   

Of the five ETFs that were recipient to the highest net inflows over the four months, three were Fixed Income ETFs:  the ICBC CSOP FTSE Chinese Government Bond ETF, the iShares Barclays USD Asia High Yield Bond Index ETF and the ABF Singapore Bond Index Fund, which saw S$285 million of combined net inflows, 58% of the total net inflows.    
Combined AUM of the 30 ETFs is S$9.2 billion, up from S$5.5 billion 12 months ago. Equity and REIT ETFs have continued to represent 40% of the combined AUM. However, the share of Fixed Income ETF AUM within the total AUM has grown from 34% to 46%, while the share of Gold ETF AUM has declined from 27% to 16%. 


Equity ETFs Rank as Top YTD Performers, as Bond ETFs Capture Most Inflows 

Partner, River Valley Asset Management

River Valley Asset Management

Partner

Singapore-based boutique asset management firm

River Valley Asset Management is a Singapore-based boutique asset management firm. Our team at RVAM strongly believes in being a trusted steward of our clients' wealth across generations.

Each of our fund managers has years of rich portfolio management experience over multiple market cycles at world-class investment houses. We bring our clients the combined strength of our investment team to manage their financial portfolios and to provide bespoke guidance on all aspects of their financial health.

We offer multi-asset class expert investment advice to accredited investors who are family offices, high net worth individuals and institutional investors to preserve and grow our clients' wealth.

The fund management team of the company includes Homiyar Vasania, Anand Ramachandran and Jamshed Desai.

Thematic (Sector/Industry)

Singapore listed REITs and Business Trusts have been reporting financial results and while we were perusing them, we couldn’t help but hark back to the period at the start of the year when a slew of market reports hit the headlines calling for a reversal of fortunes of several REIT sectors based on the premise that ‘supply’ in many of them had or was going to peak out in 2017 and that it was going to be smoother sailing here onward. The sector has had a good rally and it is time to ponder whether "peak supply" thesis can sustain the momentum. We weren’t buying that line then and we aren’t buying it now.

Singapore listed REITs and Business Trusts have been reporting financial results and while we were perusing them, we couldn’t help but hark back to the period at the start of the year when a slew of market reports hit the headlines calling for a reversal of fortunes of several REIT sectors based on the premise that ‘supply’ in many of them had or was going to peak out in 2017 and that it was going to be smoother sailing here onward. The sector has had a good rally and it is time to ponder whether "peak supply" thesis can sustain the momentum. We weren’t buying that line then and we aren’t buying it now. 

Singapore

NikkoAM-StraitsTrading Asia ex Japan REIT ETF is an exchange-traded fund established in Singapore. The Fund's investment objective is to replicate as closely as possible, before expenses, the performance of the FTSE EPRA/NAREIT Asia ex Japan Net TR REIT Index. The Fund will invest all, or substantially all, of its assets in Index Shares in same weightings. 

NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (AXJREIT SP)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (AXJREIT SP)

REIT Watch - Investors Continue to Favour Reit ETFs

The ascent of passive investing saw assets under management (AUM) in pure Reit Exchange Traded Funds (ETFs) exceed US$40 billion globally. The...

Singapore Exchange Ltd (SGX)

Equity ETFs Rank as Top YTD Performers, as Bond ETFs Capture Most Inflows

Over the first four months of 2021 the Xtrackers FTSE Vietnam Swap UCITS ETF, SPDR S&P 500 ETF, SPDR Straits Times Index ETF, SPDR Dow Jones...

Singapore Exchange Ltd (SGX)

The Peril of 'Peak Supply' Analyses

Singapore listed REITs and Business Trusts have been reporting financial results and while we were perusing them, we couldn’t help but hark back to...

River Valley Asset Management

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)