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.

Asia’s leading multi-asset exchange

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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Commodities

<ul>
<li>As consistently flagged by the World Gold Council, gold has always been viewed as a haven asset. The precious metal also plays an important role in portfolio diversification. &nbsp;</li>
<li>Last week, global equity markets faced unprecedented turbulence following mounting investor fears over the impact of the coronavirus outbreak and an oil-price war. Reflecting bullion’s haven status, total turnover for SPDR® Gold Shares ETF has surged to S$160.8 million in the MTD, up more than four-fold YoY. &nbsp;</li>
<li>Spot gold has gained about 4% since the start of 2020, after breaching the US$1,700/oz-mark in intraday trading – the highest since Dec 2012 – earlier this month. SPDR® Gold Shares ETF has generated a total return of 7.7% in the YTD, bringing its 1Y total return to 26.4%.</li>
</ul>
&nbsp;
As consistently flagged by the <a href="https://www.gold.org/" target="_blank" rel="noopener">World Gold Council</a> (WGC), gold has always been recognised as a haven asset, one that gives investors protection and security during uncertain times.
The precious metal also plays an important role in portfolio diversification – the WGC suggests that when investors add risky assets, gold should make up 2%-10% of the portfolio. This is because the metal has a history of maintaining low correlations to most other asset classes, and including assets with a low correlation to each other helps reduce overall portfolio risk.
SPDR® Gold Shares <a href="http://www.spdrgoldshares.com/singapore/" target="_blank" rel="noopener">ETF</a> on SGX provides investors with an innovative, relatively cost-efficient and secure way to access the gold market. The ETF aims to lower many barriers that prevent some investors from investing in bullion, including the logistics of buying, storing and insuring the commodity. In addition, certain pension funds and mutual funds do not or cannot hold physical commodities or the derivatives. The ETF is set up to reflect the performance of bullion, less the fund’s expenses. It tracks the London Bullion Market Association (LBMA) PM Gold Price, and the physical bullion is kept in the form of London Good Delivery bars.
SPDR® Gold Shares Grabs Spotlight
Last week, global equity markets faced unprecedented turbulence following mounting investor fears over the impact of the COVID-19 outbreak and an oil-price war. US stocks suffered a week of wild swings, and benchmark indexes sank across the region, with circuit breakers triggered in markets ranging from Seoul to Bangkok, Manila, Jakarta and Mumbai. Although most markets managed to stage a rebound on Friday, global equities have suffered their worst week since 2008 as investors priced in a severely weaker economic outlook on the back of the pandemic.
Reflecting bullion’s haven status amidst the current market volatility, the monthly total turnover for SPDR® Gold Shares ETF has surged. In the March month-to-date, the fund’s trading value jumped to S$160.8 million, up more than four-fold from S$38.9 million in the year-ago period.
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2020-03/SPDR%20Gold%20ETF.png" class="editor-image img-responsive"></figure>
<div class="content-caption">SPDR GOLD ETF</div>

Source: SGX (Data as of 12 March 2020)
In the 2020 YTD, SPDR® Gold Shares ETF has generated a total return of 7.7%, bringing its one-year and three-year total returns to 26.4% and 10.7% respectively.
<table class="table table-striped">
<tbody>
<tr>
<td>
ETF Name
</td>
<td>
Underlying Index
</td>
<td>
SGX Code
</td>
<td>
YTD Total Return (%)
</td>
<td>
1Y Total Return (%)
</td>
<td>
3Y Total Return (%)
</td>
<td>
5Y Total Return (%)
</td>
<td>
Fund Size (S$M)
</td>
<td>
Expense Ratio
</td>
<td>
Trading Currency
</td>
</tr>
<tr>
<td>
SPDR GOLD SHARES ETF
</td>
<td>
LBMA Gold Price
</td>
<td>
O87
</td>
<td>
7.7
</td>
<td>
26.4
</td>
<td>
10.7
</td>
<td>
6.8
</td>
<td>
70,929
</td>
<td>
0.4
</td>
<td>
USD
</td>
</tr>
</tbody>
</table>
&nbsp;Source: Bloomberg (Data as of 12 March 2020)
Global Gold ETF Flows Surge
According to WGC<a href="https://www.gold.org/goldhub/data/global-gold-backed-etf-holdings-and-flows" target="_blank" rel="noopener"> data</a>, uncertainty over the potential impact of the COVID-19 coronavirus outbreak on the global economy has driven global gold ETF assets to fresh records. In February 2020, gold-backed ETFs and similar products saw an increase of 84.5 tonnes, or net inflows of US$4.9 billion, globally, boosting holdings to an all-time high of 3,033 tonnes. Combined with a gold price increase of nearly 2%, assets under management grew 4.4% in US dollars during the month, breaching the previous September 2012 record, the WGC said.
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2020-03/ETF%20Flows.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">ETF Flows</div>

Low Rates Seen Boosting Gold 
“We expect market risk and slowing economic growth interaction to impact gold prices, particularly as the financial effects of the coronavirus are realised. Additionally, lower interest rates, increased gold price volatility and central bank intervention could continue,” the WGC noted in its <a href="https://www.gold.org/goldhub/research/outlook-2020" target="_blank" rel="noopener">Gold Outlook 2020 report</a>.
“The low-rate environment is unlikely to change any time soon. Many central banks – the most since the global financial crisis – are cutting rates, expanding or implementing quantitative (or quasi-quantitative) easing, and, in some instances, doing both. Gold has historically performed well in the 12- to 24-month period following policy shifts from tightening to on-hold or easing,” it added.
On Sunday, the Federal Reserve slashed its benchmark interest rate in an emergency move by a full percentage point to 0%-0.25% – a level last seen in the wake of the 2008 financial crisis – in a bid to cushion the US economy from the impact of the coronavirus outbreak. The central bank also promised to boost its bond holdings by at least $700 billion, and said it would allow banks to borrow from the discount window for as long as 90 days, as well as cut reserve requirement ratios to 0%.
This is the Fed’s second emergency rate cut in two weeks – on 3 March, the central bank lowered US rates by half a percentage point, its first reduction since the financial crisis more than a decade ago. In a coordinated action with the Fed, five other central banks said on Sunday they would also use their swap lines to boost the international supply of greenbacks, after the pandemic sparked a rush for US dollars. Lower rates typically boost the appeal of bullion, which doesn’t pay interest.
Spot gold price has gained about 4% since the start of 2020. It breached the US$1,700/oz-mark in intraday trading – the highest since December 2012 – earlier this month.
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2020-03/Spot%20Gold.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">Spot Gold</div>

SPDR® Gold Shares ETF&nbsp; 
SPDR® Gold Shares <a href="http://www.spdrgoldshares.com/singapore/" target="_blank" rel="noopener">ETF</a> is designated as a non-Specified Investment Product, and is thus an Excluded Investment Product (EIP), accessible to anyone without pre-qualification. Investors should refer to the <a href="http://www.spdrgoldshares.com/media/GLD/file/singapore/GLD-Sing-Prospectus-2017-06-07.pdf" target="_blank" rel="noopener">fund prospectus</a> for more information, including product risks.
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, visit <a href="https://www.smartkarma.com/www.sgx.com/etf" target="_blank" rel="noopener">www.sgx.com/etf</a>



As consistently flagged by the World Gold Council, gold has always been viewed as a haven asset. The precious metal also plays an important role in portfolio diversification. &nbsp;
Last week, global equity markets faced unprecedented turbulence following mounting investor fears over the impact of the coronavirus outbreak and an oil-price war. Reflecting bullion’s haven status, total turnover for SPDR® Gold Shares ETF has surged to S$160.8 million in the MTD, up more than four-fold YoY. &nbsp;
Spot gold has gained about 4% since the start of 2020, after breaching the US$1,700/oz-mark in intraday trading – the highest since Dec 2012 – earlier this month. SPDR® Gold Shares ETF has generated a total return of 7.7% in the YTD, bringing its 1Y total return to 26.4%.

&nbsp;
As consistently flagged by the World Gold Council (WGC), gold has always been recognised as a haven asset, one that gives investors protection and security during uncertain times.
The precious metal also plays an important role in portfolio diversification – the WGC suggests that when investors add risky assets, gold should make up 2%-10% of the portfolio. This is because the metal has a history of maintaining low correlations to most other asset classes, and including assets with a low correlation to each other helps reduce overall portfolio risk.
SPDR® Gold Shares ETF on SGX provides investors with an innovative, relatively cost-efficient and secure way to access the gold market. The ETF aims to lower many barriers that prevent some investors from investing in bullion, including the logistics of buying, storing and insuring the commodity. In addition, certain pension funds and mutual funds do not or cannot hold physical commodities or the derivatives. The ETF is set up to reflect the performance of bullion, less the fund’s expenses. It tracks the London Bullion Market Association (LBMA) PM Gold Price, and the physical bullion is kept in the form of London Good Delivery bars.
SPDR® Gold Shares Grabs Spotlight
Last week, global equity markets faced unprecedented turbulence following mounting investor fears over the impact of the COVID-19 outbreak and an oil-price war. US stocks suffered a week of wild swings, and benchmark indexes sank across the region, with circuit breakers triggered in markets ranging from Seoul to Bangkok, Manila, Jakarta and Mumbai. Although most markets managed to stage a rebound on Friday, global equities have suffered their worst week since 2008 as investors priced in a severely weaker economic outlook on the back of the pandemic.
Reflecting bullion’s haven status amidst the current market volatility, the monthly total turnover for SPDR® Gold Shares ETF has surged. In the March month-to-date, the fund’s trading value jumped to S$160.8 million, up more than four-fold from S$38.9 million in the year-ago period.

SPDR GOLD ETF

Source: SGX (Data as of 12 March 2020)
In the 2020 YTD, SPDR® Gold Shares ETF has generated a total return of 7.7%, bringing its one-year and three-year total returns to 26.4% and 10.7% respectively.




ETF Name


Underlying Index


SGX Code


YTD Total Return (%)


1Y Total Return (%)


3Y Total Return (%)


5Y Total Return (%)


Fund Size (S$M)


Expense Ratio


Trading Currency




SPDR GOLD SHARES ETF


LBMA Gold Price


O87


7.7


26.4


10.7


6.8


70,929


0.4


USD




&nbsp;Source: Bloomberg (Data as of 12 March 2020)
Global Gold ETF Flows Surge
According to WGC data, uncertainty over the potential impact of the COVID-19 coronavirus outbreak on the global economy has driven global gold ETF assets to fresh records. In February 2020, gold-backed ETFs and similar products saw an increase of 84.5 tonnes, or net inflows of US$4.9 billion, globally, boosting holdings to an all-time high of 3,033 tonnes. Combined with a gold price increase of nearly 2%, assets under management grew 4.4% in US dollars during the month, breaching the previous September 2012 record, the WGC said.

ETF Flows

Low Rates Seen Boosting Gold 
“We expect market risk and slowing economic growth interaction to impact gold prices, particularly as the financial effects of the coronavirus are realised. Additionally, lower interest rates, increased gold price volatility and central bank intervention could continue,” the WGC noted in its Gold Outlook 2020 report.
“The low-rate environment is unlikely to change any time soon. Many central banks – the most since the global financial crisis – are cutting rates, expanding or implementing quantitative (or quasi-quantitative) easing, and, in some instances, doing both. Gold has historically performed well in the 12- to 24-month period following policy shifts from tightening to on-hold or easing,” it added.
On Sunday, the Federal Reserve slashed its benchmark interest rate in an emergency move by a full percentage point to 0%-0.25% – a level last seen in the wake of the 2008 financial crisis – in a bid to cushion the US economy from the impact of the coronavirus outbreak. The central bank also promised to boost its bond holdings by at least $700 billion, and said it would allow banks to borrow from the discount window for as long as 90 days, as well as cut reserve requirement ratios to 0%.
This is the Fed’s second emergency rate cut in two weeks – on 3 March, the central bank lowered US rates by half a percentage point, its first reduction since the financial crisis more than a decade ago. In a coordinated action with the Fed, five other central banks said on Sunday they would also use their swap lines to boost the international supply of greenbacks, after the pandemic sparked a rush for US dollars. Lower rates typically boost the appeal of bullion, which doesn’t pay interest.
Spot gold price has gained about 4% since the start of 2020. It breached the US$1,700/oz-mark in intraday trading – the highest since December 2012 – earlier this month.

Spot Gold

SPDR® Gold Shares ETF&nbsp; 
SPDR® Gold Shares ETF is designated as a non-Specified Investment Product, and is thus an Excluded Investment Product (EIP), accessible to anyone without pre-qualification. Investors should refer to the fund prospectus for more information, including product risks.
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, visit www.sgx.com/etf

Gold ETF Shines as Investors Shelter in Haven Assets