Since 2017, investors have had a choice between three REIT ETFs on the Singapore Exchange (SGX: S68).
That is set to change with a fourth option entering the fray.
CSOP Asset Management, a Chinese asset manager based in Hong Kong, has announced that it will list the CSOP iEdge S-REIT Leaders Index ETF on the SGX this month, under the symbol “SRT”.
The ETF’s initial offering period (IOP) has begun, and investors can already apply for shares through participating brokers.
But before you buy, here are 10 key facts you need to know. (figures are as of 30 September 2021, unless otherwise stated).
- The ETF aims to replicate the iEdge S-REIT Leaders Index as closely as possible. This index aims to measure the performance of the largest and most traded REITs on the SGX.
- The Index consists of 28 S-REITs, one more than the Morningstar Singapore REIT Yield Focus Index which is tracked by the Lion-Phillip S-REIT ETF (SGX: CLR).
- The index has a weightage cap of 10% per constituent, although some holdings may exceed the cap in between rebalancing.
- The index is rebalanced twice a year in March and September.
- Mapletree Logistics Trust (SGX: M44U) is currently the largest constituent of the Index, occupying a 10.2% position. It is followed by Ascendas REIT (SGX: A17U) and CapitaLand Integrated Commercial Trust (SGX: C38U), each forming 10% of the index.
- Industrial REITs dominate the Index with a 42.5% weightage. Office and retail REITs take up 19.7% and18.4% by weight of the index, respectively.
- From 6 May 2016 to 15 October 2021, the index delivered a total return of 67.2%.
- The expense ratio of the ETF is capped at 0.6%,
- Apart from the primary currency of SGD, the ETF will also be available in a USD version under the symbol SRU.
- Distributions from the ETF will be paid out semi-annually in SGD for both versions of the ETF.
Get Smart: A good entry point
Singapore is known as a hub for REITs.
With over 42 REITs and property trusts to choose from, it can be daunting for new investors to select specific ones for their portfolio.
Hence, the CSOP iEdge S-REIT Leaders Index ETF serves as a good entry point to participate in the competitive returns traditionally offered by S-REITs.
But if you prefer to take a hands-on approach, you might want to consider picking individual REITs to kickstart your investment journey.
Disclosure: Herman Ng owns shares of Mapletree Industrial Trust and CapitaLand Integrated Commercial Trust.