Top Singapore Bond ETFs: How to Choose the Best One for Your Portfolio

By Gerald Wong, CFA • 13 May 2025

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Singapore Bond ETFs allow you to own a diversified basket of bonds in one trade. We find out which one might be worth considering for your portfolio.

Top Singapore Bond ETFs
In this article

What are Bond ETFs?

As T-bill yields continue to dip from their recent highs, many yield-seeking investors like myself are exploring alternatives like bond ETFs.

While I've previously covered exchange traded funds (ETFs) that invest in stocks, bond ETFs are a lesser-known option.

In simple terms, bond ETFs allow investors to gain exposure to a broad basket of bonds, ranging from government to corporate bonds, through a single, low-cost investment. 

They could be a useful way to generate passive income, especially in a lower-yield environment. 

In fact, Singapore-listed bond ETFs now manage more than S$3 billion in assets, and offer dividend yields ranging from 2.31% to 7.59% as of March 2025.

In this article, I’ll break down how bond ETFs work, what to look out for, and how to decide which one might be right for your portfolio.

What are the advantages of Bond ETFs?

#1 – Diversification

Compared to owning a single bond, a bond ETF allows you to own a diversified portfolio of bonds with different maturity dates.

This would reduce the risks relating to a single issuer or a single maturity date. 

#2 – Build a fixed income portfolio in one trade

Bonds make regular interest payments, also known as coupons.

As the owner of the bond ETF, you would also be able to receive such regular interest payments. 

Hence, a bond ETF allows you to build a fixed income portfolio and earn passive income in one trade. 

What are the disadvantages of Bond ETFs?

#1 - Capital at greater risk compared to direct bond investment 

Your initial investment in a bond ETF is subject to greater capital risk compared to a similar portfolio of bonds. 

Unlike individual bonds, a bond ETF does not have a maturity date where investors will be repaid their initial investment. 

As such, there is no guarantee that you would be able to get back your initial investment.

#2 – Interest rate risk harder to mitigate

Here, it is important to note interest rate risks once again. Remember that the price of a bond goes down when interest rates go up. 

Hence, the price of a bond ETF may go down when interest rates are rising. This means that you may suffer some capital loss if you were to sell the bond ETF. 

What are the Singapore bond ETFs?

The bond ETFs listed on SGX are:

Bond ETFAUM 
ABF Singapore Bond Index FundS$1076.46 million^
Nikko AM Investment Grade Corporate Bond ETFS$619.78 million^
Xtrackers II Singapore Government Bond UCITS ETFS$112.25 million^
NikkoAM-ICBCSG China Bond ETFRMB 1639.65 million (S$297.74 million)^
iShares Asia Credit Bond Index ETFUS$50.92 million (S$66.19 million)^
iShares Asia High Yield Bond Index ETFUS$1,046.29 million (S$1,360.17 million)^
ICBC CSOP Chinese Government Bond Index ETFRMB 2,216.27 million (S$401.50 million)^

^As of 9 May 2025

What to consider when buying Bond ETFs?

To select a bond ETF, we would consider the following factors:

  • Underlying bond’s average credit rating
  • Dividend yield
  • Regularity of dividend payout
  • Expense ratio

Underlying bond’s average credit rating

SGX-listed bond ETFs have a range of credit ratings from AAA-rated investment grade bonds to high yield bonds.

Credit ratings reflect the financial strength of the borrower and its ability to pay back its debt.

An investment grade rating means that the bond is assessed to have a low risk of default. High yield bonds pay higher interest rates because they have a lower credit rating compared to investment grade bonds. 

Bond ETFAverage Credit Rating
ABF Singapore Bond Index FundAAA
Nikko AM Investment Grade Corporate Bond ETFA
Xtrackers II Singapore Government Bond UCITS ETF AAA
NikkoAM-ICBCSG China Bond ETFA+
iShares Asia Credit Bond Index ETFInvestment grade and high yield debt
iShares Asia High Yield Bond Index ETFHigh yield bonds
ICBC CSOP Chinese Government Bond Index ETFA+

*As of 31 March 2025 

Dividend yield

SGX-listed bond ETFs have recorded 12-month dividend yield between 2.31% and 7.59%.

Bond ETFLast Twelve Month (LTM) Dividend yield*
ABF Singapore Bond Index Fund2.31%
Nikko AM Investment Grade Corporate Bond ETF3.27%
Xtrackers II Singapore Government Bond UCITS ETF -
NikkoAM-ICBCSG China Bond ETF S$2.52%
iShares Asia Credit Bond Index ETF S$4.14%
iShares Asia High Yield Bond Index ETF S$7.59%
ICBC CSOP Chinese Government Bond Index ETF S$3.00%

*As of 31 March 2025 

Regularity of dividend payout

SGX-listed bond ETFs make either quarterly or semi-annual dividend payments to ETF holders. 

Bond ETFDividend Distribution Frequency
ABF Singapore Bond Index FundSemi-annual
Nikko AM Investment Grade Corporate Bond ETFSemi-annual
NikkoAM-ICBCSG China Bond ETFSemi-annual
iShares Asia Credit Bond Index ETFQuarterly
iShares Asia High Yield Bond Index ETFQuarterly
ICBC CSOP Chinese Government Bond Index ETFSemi-annual

Expense ratio

SGX-listed bond ETFs have an expense ratio ranging from 0.20% and 0.50%.

Bond ETFExpense ratio
ABF Singapore Bond Index Fund0.24%
Nikko AM Investment Grade Corporate Bond ETF0.26%
Xtrackers II Singapore Government Bond UCITS ETF 0.20%
NikkoAM-ICBCSG China Bond ETF0.30%
iShares Asia Credit Bond Index ETF0.30%
iShares Asia High Yield Bond Index ETF0.50%
ICBC CSOP Chinese Government Bond Index ETF0.26%

*As of 31 March 2025 

What would Beansprout do?

If you’re looking to build a diversified portfolio of bonds, but do not want to go through the hassle of building a bond ladder, then it might be worthwhile to start looking at Singapore bond ETFs. 

After reading this, you’re probably wondering which Singapore Bond ETF is the best. 

The answer is, it depends what you are looking for. 

If you’re looking for the Singapore Bond ETF which offers exposure purely to Singapore government bonds, then it’s the ABF Singapore Bond Index Fund.

If you’re looking for the Singapore Bond ETF which offers exposure to Chinese bonds, then it’s the ICBC-CSOP CGB or the NikkoAM-ICBCSG China Bond ETF. 

If you’re looking for the Singapore Bond ETF which offers the highest yield, then it’s the iShares Asia High Yield Bond Index ETF. However, do note that the bonds in this ETF have a lower credit rating.

If you’re looking for the Singapore Bond ETF which offers quarterly dividend payout, then it’s the iShares Asia Credit Bond Index ETF and iShares Asia High Yield Bond Index ETF.

Learn more about Singapore Bond ETFs with our upcoming Live Ask-Me-Anything session

Curious to know more about Singapore Bond ETFs? 

Join us for an exclusive live AMA with Nikko Asset Management on 13 May 2025 at 7pm where we break down what falling interest rates mean for your portfolio, and whether Singapore Bond ETFs deserve more attention in today’s market! Sign up for free here

Got a question? Submit them in advance here.

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