A Leader of the Pack: 5 Reasons to Invest in the SPDR Straits Times Index ETF
In 2002, the SPDR Straits Times Index (STI) Exchange Traded Fund (ETF) came roaring to life — marking the beginning of Singapore’s fast-growing ETF industry.
Over the past 20 years, the Singapore ETF market grew to S$12.55 billion across 37 funds at the end of 2021.1 Across the market, the SPDR STI ETF not only represents the first local ETF, but also the largest equities ETF listed on the Singapore Exchange (SGX).
State Street Global Advisors’ is proud to champion 20 years of investing in Singapore with the SPDR Straits Times Index ETF. In celebration of this milestone, here are 5 reasons why the Fund leads the pack.
1. Growth and income potential
Source: State Street Global Advisors, as at 31 December 2021.
The returns were calculated on an offer to bid/ single pricing basis on Singapore Dollar terms (taking into account any subscription and realization fee), with all dividends and distributions reinvested taking into account all charges payable upon reinvestment.
If you had invested S$10,000 when the ETF first launched in 2002, your investment would have grown to be worth S$33,932.36 at the end of 2021. As of January 2022, the ETF recorded a return of 252.73% over 20 years and an average compound growth rate of 6.57% per year.
Many stocks in the ETF’s underlying index, the Straits Times Index, have also been paying consistent dividends throughout the past years. The SPDR STI ETF offers dividend pay-outs once every 6 months.
2. Participate in the growth story of Singapore and beyond
With a history dating back to 1966, the Straits Times Index tracks the performance of the top 30 eligible companies listed on the SGX, making it the core, strategic building block, especially for Singapore-based investors. The index constituents comprises 30 largest and most liquid locally-listed companies with substantial proportion of revenue coming from Singapore2.
The index’s top holdings include well-known bellwether Singapore companies including the “Big Three” Singaporean banks (DBS Group, OCBC and UOB), SingTel, Singapore Airlines, CapitaLand, City Development as well as the Asia-Pacific focused conglomerate, Jardine Matheson and many more.
Beyond tracking the performance of Singapore’s 30 biggest companies, the ETF also provides exposure to the economy’s top-performing sectors, such as banking, real estate, and industrial goods.
3. Invest with an indexing leader
Just 2 years and 4 months after the SGX was created in 1999, State Street Global Advisors launched the SPDR STI ETF to allow investors to easily invest into the Singapore economy.
State Street Global Advisors is one of the world’s largest asset management company and has played a hand in launching the first ETF not just in Singapore, but also in the US (1993), Hong Kong (1999), and Australia (2001).
4. An essential building block for a diversified portfolio
A core-satellite portfolio strategy seeks the broad market return as the “core” portion of a portfolio, and seeks additional diversification and returns in a “satellite” strategy which adds non-core market exposures.
Broad-based ETFs, such as SPDR STI ETF, can be used as the “core” of an investment portfolio, while sector, commodity-based, or other asset class ETFs can be used to add a cost-effective and efficient “satellite” portfolio to complement the “core” broad market portfolio exposures. Such a strategy has the benefit of blending the general market risk of the core portfolio with the potentially riskier or more concentrated satellite portfolio exposures.
5. Invest with a low as 1 unit across multiple channels
Beginning in January 2022, Singaporean investors are allowed to invest in ETFs with a minimum purchase size of 1 unit — representing a reduction of minimum investment by up to 90%3. This means that investors can begin trading the SPDR STI ETF for less than a cup of coffee.
Investors can also access the Fund from a variety of channels ranging from a traditional brokerage account or through a Central Provident Fund (CPF) or Supplementary Retirement Scheme (SRS) provider.
1 Bloomberg L.P., January 2022
2 SGX, Straits Times Index (STI) Product Information, February 2022
3 Prior to January 2022, the minimum unit of trade for the SPDR Straits Times Index ETF was 10 units
Diversification does not ensure a profit or guarantee against loss.
This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
The specific securities listed do not represent all of the securities purchased, sold, or recommended for advisory clients. This information should not be considered a recommendation to invest in a particular sector or to buy or sell any security shown. It is not known whether the sectors or securities shown will be profitable in the future.
There are risks associated with investing in Real Assets and the Real Assets sector, including real estate, precious metals and natural resources. Investments can be significantly affected by events relating to these industries.
The prospectus in respect of the offer of the units (the "Units") in the SPDR® Straits Times Index ETF (the "Fund") is available and may be obtained upon request from State Street Global Advisors Singapore Limited ("SSGA", Company Registration number: 200002719D, regulated by the Monetary Authority of Singapore). Investors should read the prospectus before deciding whether to acquire Units in the Fund. The value of Units and the income from them may fall as well as rise. Units in the Fund are not obligations of, deposits in, or guaranteed by, SSGA or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Past performance figures are not necessarily indicative of future performance of the Fund. Investors may wish to seek advice from a financial adviser before making a commitment to purchase the Units. In the event that Investors chooses not to seek advice from a financial adviser, he should consider whether the product in question is suitable for him.
Investors have no right to request SSGA to redeem their Units while the Units are listed. It is intended that holders of Units may only deal in their Units through trading on the Singapore Exchange Securities Trading Limited ("SGX-ST"). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The Fund is not in any way sponsored, endorsed, sold or promoted by SPH Data Services Pte Ltd or Singapore Press Holdings Ltd (collectively "SPH") or FTSE International Limited ("FTSE"). SPH and FTSE bear no liability in connection with the administration, marketing or trading of the Fund. No warranties, representations or guarantees of any kind are made in relation to the Straits Times Index ("Index") or the Fund by FTSE or SPH. All intellectual property rights in the Index vest with SPH.
Singapore: State Street Global Advisors Singapore Limited, 168, Robinson Road, #33-01 Capital Tower, Singapore 068912 (Company Reg. No: 200002719D, regulated by the Monetary Authority of Singapore). T: +65 6826-7555. F: +65 6826-7501.
All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone.
There can be no assurance that a liquid market will be maintained for ETF shares.
The prospectuses in respect of the offer of the units (the "Units") in the SPDR® Straits Times Index ETF, SPDR® S&P 500 ETF Trust and SPDR® Dow Jones Industrial Average ETF Trust (the "Funds") are available and may be obtained upon request from State Street Global Advisors Singapore Limited ("SSGA", Company Registration number: 200002719D). Investors should read the prospectus before deciding whether to acquire Units in any of the Funds. The value of Units and the income accruing to such Units may fall or rise. Units in the Funds are not obligations of, deposits in, or guaranteed by, SSGA or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Past performance figures are not necessarily indicative of future performance of the Funds. Investors have no right to request SSGA to redeem their Units while the Units are listed. It is intended that holders of Units may only deal in their Units through trading on the Singapore Exchange Securities Trading Limited ("SGX-ST") of NYSE Arca Inc. (“NYSE Arca”) or any of the other exchanges where the Funds are listed. Listing of the Units on the SGX-ST of the NYSE Arca or any other exchange does not guarantee a liquid market for the Units.
The prospectus in respect of the Singapore offer of the shares (the ‘Shares’) in the SPDR Gold Trust (the ‘Trust’) is available and may be obtained upon request from State Street Global Advisors Singapore Limited ("SSGA") (Co. Reg. No: 200002719D). The value of Shares in the Trust and the income accruing to the Shares, if any, may fall or rise. Investors should read the prospectus of the Trust before deciding whether to purchase Shares. Shares in the Trust are not obligations of, deposits in, or guaranteed by, World Gold Trust Services, LLC, SSGA or any of their affiliates. You may wish to seek advice from a financial adviser before making a commitment to purchase Shares. In the event that you choose not to seek advice from a financial adviser, you should consider whether the Trust is suitable for you. Investors have no right to request the Sponsor to redeem their Shares while the Shares are listed. It is intended that holders of Shares may only deal in their Shares through trading on the SGX-ST. Listing of the Shares on the SGX-ST does not guarantee a liquid market for the Shares.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.
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ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
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This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.