5 ETFs to ride on Singapore’s growth story and earn dividends along the way

What happened?

As we celebrate Singapore’s 60th birthday this August, it's a great time to pause and reflect on how far we’ve come as a nation.

And also, how far our markets have come too. 

As of 31 July 2025, Singapore’s Straits Times Index (STI) has grown by around 13.2% year-to-date, outpacing the S&P 500, which is up about 3.1% year-to-date in SGD terms. 

It’s a timely reminder that strong, sustainable returns aren’t exclusive to the US market and the value of diversification.

Additionally, the Monetary Authority of Singapore (MAS) recently took bold steps to boost the Singapore stock market, committing S$5 billion through fund managers to support local equities.

In an environment marked by global uncertainty and currency swings, many in the Beansprout community are also wondering: Should I bring my money home? Where are the possible avenues for the best mix of yield and growth locally?

In this article, we’ll explore some easy ways to gain exposure to Singapore’s growth through diversified ETFs and why you might consider investing in Singapore. 

How ETFs make it easy to invest in Singapore

#1 – Listed on SGX and easy to trade

ETFs are listed and traded on the Singapore Exchange (SGX), just like regular stocks. 

This means you can buy and sell them during market hours using a brokerage account.

 With just one trade, you can gain exposure to a diversified basket of companies, sectors, or bonds.

#2 – Cost-effective passive investing

Compared to actively managed funds, ETFs typically come with lower fees.

This makes them an attractive choice for passive investors who want to grow their wealth over time without paying high management charges and the need to pick individual stocks. 

#3 – Built-in diversification

ETFs are usually diversified by design, helping to spread your risk across multiple companies or sectors. 

This reduces the impact of any single stock underperforming, which is especially valuable if you're new to investing or want a more hands-off approach.

Beyond ES3: 5 Singapore Equity ETFs to Watch in 2025

While investors may be familiar with the SPDR Straits Times Index ETF (ES3),  Singapore’s ETF market offers a broader array of options that provide direct exposure to the nation’s economic growth and key industries. 

Here are five Singapore equity ETFs ranked by their recent performance in the first half of 2025 

#1 – Lion-OCBC Securities Singapore Low Carbon ETF - 3Y Performance: +53%

As Singapore’s first low-carbon ETF, Lion-OCBC Securities Singapore Low Carbon ETF (SGX: ESG for SGD; ESU for USD) tracks the top 40 Singapore companies selected based on low carbon intensity and strong ESG practices. 

Aligned with the goals of the Singapore Green Plan 2030, this ETF supports the nation’s transition toward a low-carbon economy by promoting sustainable business practices and responsible investing.

Besides the usual blue-chip companies in the Straits Times Index, this ETF includes notable global names, including SEA Ltd, Trip.com, and Grab Holdings Ltd. 

In addition, it also includes mid-cap companies such as NetLink NBN Trust, Suntec REIT, and Yangzijiang Financial Holding Ltd.

It was awarded the Top Dividend Paying Singapore Equities ETF and Top Performing Sustainability-Linked ETF on SGX in 2024​. 

It recorded a 3-year total return of 53% as of July 2025, outperforming the Straits Times Index, and it distributes its dividend twice a year and rebalances semi-annually. 

#2 – Xtrackers MSCI Singapore UCITS ETF - 3Y Performance: +52%

The Xtrackers MSCI Singapore UCITS ETF (SGX:O9A) tracks the MSCI Singapore Index, offering exposure to large and mid-cap stocks.

Similar to the Lion-OCBC Securities Singapore Low Carbon ETF, this ETF captures globally listed Singapore companies, including Sea Ltd and Grab Holdings among its top 10 constituent list, with DBS Group and Sea Ltd making up 20% and 15% of its holdings, respectively.

Unlike the rest of Singapore equity ETFs, this fund reinvests dividends automatically, helping you grow your investment through compounding.

It’s an alternative for investors who can withstand volatility and are focused on long-term capital growth rather than income payouts.

The index is reviewed and rebalanced on a quarterly basis.

#3 – Nikko AM STI ETF - 3Y Performance: +49%

The Nikko AM STI ETF (SGX: G3B) is one of the most popular and accessible ways to invest in Singapore’s stock market. 

Similar to the SPDR Straits Times Index ETF (ES3), it tracks the Straits Times Index (STI), which is Singapore’s benchmark index that comprises the top 30 blue-chip companies listed on the SGX.

This includes major banks like DBS, OCBC, and UOB, along with telcos and REITs. 

It’s a low-cost, diversified option to consider for beginners or long-term investors seeking steady dividends and broad market exposure.

 As a passively managed fund, it tends to come with lower fees compared to actively managed options. 

Its diversified nature may appeal to those looking for steady dividends and a simple way to track the overall Singapore market without selecting individual stocks.

It distributes its dividend twice a year and rebalances semi-annually. 

#4 – Phillip SING Income ETF - 3Y Performance: +45%

The Phillip SING Income ETF (SGX: OVQ for SGD; OVS) focuses on high-yielding blue-chip Singapore stocks and invests in the top 30 SGX‑listed companies based on a quality income strategy.

Tracking the Morningstar® Singapore Yield Focus Index, the ETF encompasses a diversified mix of sectors, including local banks, telcos, and real estate companies, firms with reliable earnings and solid balance sheets.

This ETF provides exposure to established Singapore companies with a track record of paying dividends, and may appeal to those seeking more stable, long-term potential returns.

The ETF also holds a significant number of non-STI index constituents, including names like Comfortdelgro, Sheng Shiong, Yangjiang Financial Holding, and Haw Par Corporation Ltd.

It distributes its dividend twice a year and rebalances semi-annually. 

#5 – CSOP iEdge S-REIT Leaders ETF - 3Y Performance: -8%

The CSOP iEdge S-REIT Leaders Index ETF (SGX: SRT for SGD; SRU for USD) offers a simple way to invest in Singapore’s largest and most established real estate investment trusts (REITs). 

It tracks top-performing Singapore REITs and currently holds 21 different REITs, covering various property types like retail, industrial, and commercial.

If you’re an income-focused investor looking for higher yield and diversified exposure to the property sector under the lower interest rates environment, this ETF offers a way to access a broad basket of REITS, potentially mitigating the risk of picking individual REITs, all while providing regular dividend payouts.

It distributes its dividend twice a year and rebalances semi-annually. 

Comparing the 5 ETFs

Each of these ETFs offers a unique way to capture Singapore’s long‑term economic potential, from stable income and property exposure to climate alignment and global access.

Amongst the ETFs, the Lion-OSPL SG Low Carbon ETF has the highest 3-year return at 53% as of the end of July 2025. 

This is followed by the Xtrackers MSCI Singapore UCITS ETF and NikkoAM STI ETF, which have a 3-year return of 52% and 49% respectively, reflecting the broad-based growth in the Singapore stock market in recent years.

If you are interested in a pure S-REIT exposure, CSOP S-REIT could be an option to consider for your investment portfolio. REITs may also stand to benefit from a falling interest rate environment.

What to consider when investing in ETFs

While ETFs are often seen as simple, low-cost investment tools, it's important to understand their underlying structure and whether they align with your financial goals. 

Here are four key things to look out for:

#1 – Dividend yield vs capital growth

One of the first things to consider is whether you're seeking dividend income or capital appreciation. The choice depends on your lifestyle and goals.

If you need regular income, dividend ETFs might be the way to go. 

If you're building wealth over time, growth-focused ETFs that reinvest earnings may harness the power of compounding returns and provide long-term price appreciation instead.

#2 – Expense ratio

Every ETF charges an annual fee, known as the expense ratio. 

For example, a 0.30% expense ratio means you'll pay S$30 per year for every S$10,000 invested.

While that may seem small, these fees can quietly eat into your returns, especially over the long term.

#3 – Liquidity

Liquidity in the market refers to how easily you can buy or sell without affecting the price.

Actively traded ETFs generally have tighter bid-ask spreads, which makes it easier to buy or sell at the price you want in the market. 

Why consider investing in Singapore?

#1 – Safe haven status

Singapore is one of the few countries globally to hold a AAA credit rating from all three major agencies (Standard & Poor's, Fitch, and Moody's).

This reflects strong fiscal discipline, sound governance, and a reputation for financial resilience—qualities that can be especially reassuring in uncertain times.

#2 – Stable Singapore Dollar

The Singapore dollar (SGD) has remained relatively stable, even appreciating by around 6% against the U.S. dollar this year.

For those who plan to retire or spend in SGD, investing in local assets may help reduce exposure to foreign exchange risks and provide a layer of currency stability.

#3 – Resilient economy

Singapore’s economy is known for its stability and long-term planning.

Core industries such as banking, technology, and real estate are well-developed and supported by clear policy frameworks. 

While no economy is immune to volatility, Singapore's track record of resilience and forward-looking policymaking offers a degree of confidence for long-term investors.

#4 – Home country advantage

Investing in your home market offers practical advantages—lower transaction costs, fewer currency-related risks, and easier access to information.

If you expect your future spending, such as daily expenses, retirement needs, or major life milestones, to be in Singapore dollars (SGD), having a portion of your portfolio in SGD-denominated assets can help reduce the impact of foreign exchange fluctuations. 

This makes it easier to plan for the long term, knowing your investments are aligned with your financial obligations.

What would Beansprout do?

As Singapore marks its 60th year, it’s a timely moment to reflect on how far the local market has come, and what it might offer investors today. 

From economic resilience to currency stability, Singapore presents certain strengths that may appeal to those looking to stay invested closer to home.

The five ETFs highlighted above offer diversified and accessible exposure to key segments of the Singapore market. 

For investors seeking simplicity and income potential, they offer a starting point to explore local opportunities without the need to pick individual stocks.

That said, all investments carry risk. 

Prices can fluctuate with market sentiment, changes in interest rates, or external events, and dividend yields are not guaranteed. 

It’s important to stay aware of these factors and consider how they align with your personal financial goals.

Learn more about SGX ETFs and find the best ETF for your portfolio here. 

Learn more about how the STI ETF serves as a core building block for long-term exposure to Singapore’s leading companies

Check out Beansprout's guide to the best stock trading platforms in Singapore with the latest promotions to invest in SGX ETFs.

Join our Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds, and ETFs.