SGX Market Updates

This Week’s ETF Focus includes APAC REIT Dividend-Plays


PUBLISHED ON |

26 September 2017

  • The Phillip SGX APAC Dividend Leaders REIT ETF is distributing 2.05 US cents per unit with an ex-dividend date of Friday 29 Sep while the NikkoAM-StraitsTrading Asia ex Japan REIT ETF will distribute 1.128 SG cents per unit with an ex-dividend date of Monday 2 Oct.

  • Both these REIT-focused ETFs have outperformed the MSCI World Equity REITs Index from their respective inception dates. The Phillip SGX APAC Dividend Leaders REIT ETF listed in Oct 2016 and the NikkoAM-StraitsTrading Asia ex Japan REIT ETF listed in Mar 2017.

  • Other relevant ETF highlights included Chancellor of Germany Angela Merkel winning her fourth term in government. Germany is Singapore’s tenth largest trading partner and SGX lists both stocks and products with a Eurozone focus, including five SIP ETFs.




The final week of the third quarter of 2017 began with Chancellor of Germany Angela Merkel winning her fourth term of government. Throughout the week, as noted in the Economic Calendar (click here) there will also be a string of second tier economic indicators released, in addition to a handful of corporate actions – one of which is the second dividend distribution of the Phillip SGX APAC Dividend Leaders REIT ETF, scheduled to go ex-div on Friday 29 September. 



REIT-Focused ETFs

Real Estate Invest Trusts (REITs) were first listed in Singapore in 2002 and now make up as many as one-tenth of the STI constituents, and three of the five STI Reserve stocks. SGX also currently lists two REIT Exchange Traded Funds (ETFs) – the Phillip SGX APAC Dividend Leaders REIT ETF and NikkoAM-StraitsTrading Asia ex Japan REIT ETF, which were listed on SGX in October 2016 and March 2017 respectively.

Both ETFs are tracking indices focused on REITs based in the Asia Pacific region. Both ETFs are non-SIP, that is Excluded Investment Products. The ETFs are scheduled to distribute dividends over the next week – the Phillip SGX APAC Dividend Leaders REIT ETF will distribute on Friday 29 September and the NikkoAM-StraitsTrading Asia ex Japan REIT ETF will distribute on Monday 31 October.



Phillip SGX APAC Dividend Leaders REIT ETF

The Phillip SGX APAC Dividend Leaders REIT ETF will be distributing US$0.0205 per unit with an ex-dividend date of Friday 29 September. This will be the second dividend distribution by the ETF since listing in October 2016. The ETF is traded in both USD [code: BYI] and SGD [code: BYJ] and distributes dividends on a semi-annual frequency. In SGD terms, this ETF has generated a 3.7% total return since inception, compared to 2.0% for the MSCI World Equity REITs Index. Total returns assume dividend distributions are reinvested into the ETF.

The Phillip SGX APAC Dividend Leaders REIT ETF is issued and managed by Phillip Capital Management (Phillip Capital), marks the first physically-replicated (cash-based) REIT ETF listed on SGX, as well as Phillip Capital’s maiden ETF issue. The ETF tracks the SGX APAC ex-Japan Dividend Leaders REIT Index, designed and built by SGX Index Edge, in consultation with Phillip Capital Management.

The Index is a dividend-weighted index that captures over 70% of the region’s REIT universe by total capitalisation, taking into consideration size, free-float and liquidity. It comprises 30 top dividend-yielding REITs, with all constituent weights capped at 10% to ensure greater portfolio diversification. For more information click here.



NikkoAM-StraitsTrading Asia ex Japan REIT ETF

The NikkoAM-StraitsTrading Asia ex Japan REIT ETF will be distributing S$0.01128 per unit with an ex-dividend date of Monday 2 October. This will be the second quarterly distribution of the ETF since listing in March 2017. The Fund details that dividends (if any) would be paid quarterly at the manager’s discretion.

The NikkoAM-StraitsTrading Asia ex Japan REIT ETF has generated an 8.2% total return since inception, compared to a 1.1% return for the MSCI World Equity REITs Index in SGD terms.

The NikkoAM-StraitsTrading Asia Ex Japan REIT ETF tracks FTSE’s EPRA/NAREIT Asia ex Japan REITs Net Total Return SGD index, with 70% weightage on Singapore-listed REITs and the remaining 30% weightage on REITs listed in Hong Kong and Malaysia. The basket of REITs represented by NikkoAM-StraitsTrading Asia Ex Japan REIT ETF covers diverse properties including financial hubs, tech hubs, hospitals, residential and industrial properties, malls and hotels located across Asia ex Japan. For more information click here.



Europe-Focused ETFs

As expected by the broad consensus of market participants, the Chancellor of Germany Angela Merkel won her fourth term following the German elections. The victory was narrower than expected with the nationalist Alternative for Germany winning parliamentary seats for the first time. Overnight the Deutsche Boerse AG German Stock Index (DAX) closed relatively flat, up 0.2% (or down 0.4% in SGD terms).

Europe is an important trading partner of Singapore. In 2016, Germany ranked as Singapore’s tenth largest trading partner by trade value, with Bloomberg Data showing bilateral trade value between the two countries was up 13.4% for the first five months of 2017. SGX lists stocks with a Eurozone-focus, such as Sembcorp Marine, which reported 42% of its FY16 external customer turnover from the Eurozone, and IREIT Global which invests in a portfolio of income-producing real estate in Europe, used primarily for office, retail and industrial & logistics purposes.

SGX also lists for trading a handful of ETFs that track the performance of Eurozone stocks, that are designated as Specified Investment Products (SIPs). These ETFs are tabled below.

Europe focused SIP ETFs SGX
Code
Total
Return
MTD
%
Total
Return
YTD
%
12 Mth
Total
Return
%
3 Year
Total
Return
%
db x-trackers Euro STOXX 50® UCITS ETF (DR) IH0 3.3 17.8 28.8 21.0
db x-trackers II EONIA UCITS ETF KV8 -0.8 5.3 4.8 -2.0
db x-trackers II EUROZONE GOVERNMENT BOND UCITS ETF (DR) KF6 -1.3 4.8 1.4 5.8
db x-trackers MSCI Europe Index UCITS ETF (DR) IH3 3.1 15.1 22.2 19.7
Lyxor ETF MSCI Europe JC5 3.1 15.0 22.3 19.6
Average 1.5 11.6 15.9 12.8

Source: SGX & Bloomberg (data as of 25 September 2017).
For more information in the ETF Screener click here.



These SIPs may have terms and features that are not as well-known or widely understood as others and are derivatives, or products which may contain derivatives. SIPs contain complex features and risks which can expose investors to more factors that can cause a loss – investors can find out more information here.



ETFs are Open-Ended Investments

An ETF is an open-ended investment fund that aims to replicate the performance of a published market index. It is listed and traded on a stock exchange, and investors may buy or sell ETF units to participate in the performance of the underlying index which tracks equities, fixed income, commodities or money market instruments. Investors typically use ETF to gain exposure to all the constituents of the index, thereby diversifying their portfolio without having to purchase individual assets underlying the index.

An open-ended ETF implies that the ETF units in the market are not fixed and subject to market demand where new units can be created/redeemed from time to time. This is unlike shares which generally have fixed amount of units in the market.  Risks associated with ETF investing include market risk, can include foreign exchange risk, liquidity  risk and product specific risks. For more information, click here.

For more information on the product features risks and of fees and charges (as outlined in the Product Highlights Sheets),

  • for the Phillip SGX APAC Dividend Leaders REIT ETF click here, and
  • for the NikkoAM-StraitsTrading Asia Ex Japan REIT ETF click here.


Did You Know?

There are four ETFs available under CPFIS-OA:

  • SPDR® Straits Times Index ETF
  • Nikko AM Singapore STI ETF
  • ABF Singapore Bond Index Fund
  • SPDR® Gold Shares






This article is provided by SGX My Gateway.



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