Newly added ETFs for SRS investors: Which ones to consider?

What happened? 

We previously wrote a guide on ETF investment options using your SRS funds. 

SRS investors now have wider range of investment options with the newly-added ETFs that can be purchased using your SRS funds. 

ETFs newly listed over the last 12 month include:

Regional equities ETFs:

1. iShares MSCI Asia Ex Japan Climate Action ETF
2. CSOP iEdge Southeast Asia + TECH Index ETF

Single country ETFs:

1. Lion-Nomura Japan Active ETF (Powered by AI)
2. CGS Fullgoal Vietnam 30 Sector Cap ETF
3. CGS FG CSI 1000 ETF
4. CSOP Huatai-PineBridge SSE Dividend Index ETF
5. Phllip CUAM MSCI China A 50 Connect Index ETF

What are these ETFs? How do they compare? Let’s find out more in this article.

What are the newly added ETFs on the Singapore Exchange?

Which ETFs to choose for your investments?

Whether you are looking to invest in the broad-base, sectoral or thematic ETFs such as climate related, there is a one that may provide you with the exposure you are looking for. 

Among the 7 newly listed ETFs, 2 of them provide regional exposure into Asia market while remaining 5 provide single country exposure into Japan, Vietnam and China.

Gain diversification across Asia companies

For investors looking to invest into Asia major markets such as China, India, Korea and Taiwan, the iShares MSCI Asia Ex Japan Climate Action ETF (stock code: ICU/ ICM) offers exposure to over 600 companies in Asia that fair relatively well on their carbon emission intensity, emission reduction targets, green revenues, climate transition risk and steps taken to mitigate these risks. 

Top index constituents include several tech giants in the region, including TSMC (6.7%), Tencent Holdings (4.42%), Alibaba Group (4.01%) and Hon Hai Precision Industry (1.76%).

If you are looking to gain exposure to Southeast Asia, the CSOP iEdge Southeast Asia + TECH Index ETF (stock code: SQQ/ SQU) and the CGS Fullgoal Vietnam 30 Sector Cap ETF (stock code: VNM/ VND) offer exposure to these fast-growing markets. 

Asia giants – Japan and China

The Japanese stock market has seen a recent surge in its domestic stock prices 28% gain and touching 33-year highs in 2023. 

Listed on 31-Jan 2024, Lion-Nomura Japan Active ETF (stock code: JJJ) is the first active ETF listed on SGX and currently the only ETF on SGX that offers exposure into Japan stock market.

Unlike passive ETF, an active ETF does not seek to track any index. The investment objective is to achieve long-term capital growth through investment in an actively managed portfolio of Japanese equity securities, diversified across sectors and market capitalisation. 

The ETF uses proprietary AI model of Lion Global Investors and Nomura Asset Management to assist the portfolio manager in shortlisting the stocks to be included in the ETF. 

3 new China A-shares ETF were also added on SGX in recent months, offering investors a wider choice of China exposure with underlying indices that include (i) MSCI China A 50 Connect Index - large cap, (ii) CSI 1000 - mid-small cap, and (iii) SSE Dividend Index - dividend focused stocks. 

A full list of China equities ETFs listed on SGX can be found via the ETF screener page here. 

Comparison across expense ratio, fund size and returns in 1Q2024

All newly listed ETFs charges management fees below 1.00% with the iShares MSCI Asia Ex Japan Climate Action ETF (ICM) having the lowest expense ratio at just 0.18%. 

The ETF also recorded highest asset under management (AUM) with S$589 million as of 31 March 2024. Prudential, Temasek and Singlife were among the anchor investors of this ETF at its launch, reflecting strong institutional investors interest. 

In terms of 1Q 2024 performance, CGS Fullgoal Vietnam 30 Sector Cap ETF has recorded double digit returns of 10.56% and ranked top among the newly listed ETFs. 

On its economic front, Vietnam has recorded 5.66 percent growth year-on-year in 1Q 2024, highest level since 2020 despite global economic uncertainty.

Dividend focused China equity ETF has outperformed mid-small cap over the same period with CSOP HTPB SSE Dividend Index ETF recorded total returns of 7.87%, ranked no. 2 in the list while CGS FG CSI 1000 ETF recorded a total returns of 8.55% as high dividend A-shares companies saw broad-base market rally at beginning of 2024.

How do I invest in ETFs using SRS?

Before you start investing using your SRS funds, you’ll need to satisfy the following criteria

• At least 18 years old,
• Not an undischarged bankrupt, and
• Not mentally disordered and therefore capable of managing yourself and your affairs

Thereafter, you can invest your SRS funds with a few simple steps:

• Apply for a SRS account
• Link your SRS account and trading account
• Execute your trade

What would Beansprout do?

With the newly listed ETFs on the Singapore Exchange, SRS investors now have more choices to pick from for their SRS funds. 

The wide range of ETFs offer exposure to diverse themes such as technology and climate action that encompass listed companies across Asia, including China, Japan, Vietnam. 

Amongst the newly added ETFs, the iShares MSCI Asia Ex Japan Climate Action ETF has garnered most investors interest in terms of asset under management and has generated a positive return since listing, and has the lowest expense ratio of just 0.18% per annum.

In terms of recent performance, CGS Fullgoal Vietnam 30 Sector Cap ETF, CSOP HTPB SSE Dividend Index ETF and iShares MSCI Asia Ex Japan Climate Action ETF ranked among the top 3 best performing ETFs.

However, investors should note that equities ETFs are generally meant for invest with a longer time horizon e.g. at least 10 years or more. As shown in the table above, there can be short-term market volatility and may result negative performance in a particular market or sector at any specific period. 

Hence it may be wise to make sure that individual portfolio is well diversified across equities and asset classes such as bonds, REITs and gold in previous article. Investors should note that performance quoted represents historical performance and does not guarantee future results.

You can find out more about these ETFs on the SGX ETF screener page.

Click here to discover how to choose the best ETF as a SRS investor.

To learn more about how you can lower your tax bill by using the SRS scheme, read our comprehensive guide to the SRS.