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.

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