The Singapore Exchange (SGX) hosts a diverse array of approximately 73 exchange-traded funds (ETFs), including those listed in dual currencies. As of May 2024, these ETFs collectively manage assets under management (AUM) totaling US$7.89 billion locally and US$579.21 billion globally. Additionally, SGX offers two leveraged and inverse products, with an AUM totaling US$2 million, both locally and globally.
Source: SGX (as of 1Q 2024)
SGX-listed ETFs cover various asset classes, such as equities (stocks), fixed income (bonds), commodities (including gold, silver, and oil), and real estate investment trusts (REITs). These ETFs provide geographical exposure to markets in Singapore, Southeast Asia, China, the US, and several emerging markets.
The dominant asset classes by AUM on SGX are fixed income and equities, followed by REITs and gold. Institutional investors account for 63% of the AUM market segmentation, while retail investors make up 22%.
Source: SGX (as of 1Q 2024)
ETF Performance Highlights on SGX
Source: SGX, CGS International (as of June 27, 2024)
1. Equities lead with focus on US and Indian markets
ETFs like SPDR S&P500 US$ (SGX:S27) and SPDR DJIA US$ (SGX:D07), tracking the S&P 500 Index and Dow Jones Industrial AverageSM (DJIASM) Index respectively, exhibited robust annual total returns of 28.05% and 20.12%. Concurrently, Amundi MSIndia US$ (SGX:G1N) and iShares India Climate Transition US$ (SGX:I98), centered on the MSCI India Net Total Return Index and MSCI India ESG Enhanced Focus CTB Select Index, reported strong returns of 27.12% and 20.43%, underscoring significant investor interest in US and Indian equities.
2. Commodities perform well, particularly gold
ETFs such as SPDR Gold Shares SG$ (SGX:GSD) and SPDR Gold Shares US$ (SGX:O87), linked to the LBMA Gold Price PM, delivered notable annual total returns of 18.65% and 16% respectively. This highlights gold’s resilience as a favored commodity during periods of economic uncertainty.
3. Rising preference for sustainable investments in Asia Pacific
ETFs like CSOP LOW CARBON S$ (SGX:LCS) and CSOP LOW CARBON US$ (SGX:LCU), based on the FTSE Asia Pacific Low Carbon Select Index, demonstrated strong performance with returns of 18.97% and 16.81% respectively. These ETFs reflect growing investor demand for sustainable investment opportunities across the Asia Pacific region.
4. Stability in Asian fixed income assets
The iShares Asia High Yield Bond US$ (SGX:O9P), which tracks the Bloomberg Asia USD High Yield Diversified Credit Index, posted a solid annual total return of 11.50%, highlighting the resilience and attractiveness of Asian fixed income securities amidst global market volatilities.
5. Ethical investing gains momentum in Asia Pacific region
Principal S&P Ethical Asia Pacific Dividend US$ (SGX:P5P), focusing on the S&P Ethical Pan Asia Select Dividend Opportunities Index, reported an annual total return of 11.15%. This ETF illustrates the increasing popularity of ethical investment strategies that prioritize sustainable dividend opportunities in the Asia Pacific market.
These top-performing ETFs on SGX, as of June 27, 2024, all employ a passive management style, reflecting the current market preference for low-cost, diversified investment vehicles that mirror market indices and deliver competitive returns.
Source: SGX, CGS International (as of May 2024)
Source: SGX (as of May 2024)
Coupled with the observed trends in ETF turnover and volume, it is evident that investors are increasingly favoring equity-focused ETFs. This comprehensive view of both performance and activity underscores the robust and dynamic nature of the ETF market on SGX, catering to a wide range of investment strategies and preferences.
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any ETFs mentioned.
References
ETF Market Highlights 1Q 2024 (sgx.com)
SGX ETF Trading Summary – May 2024 (sgx.com)
