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

13 Dec 2022

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

TL;DR

  • Singapore REIT ETFs offer instant diversification across various industries and geographies compared to owning single REITs. 
  • To decide which Singapore REIT ETF is most suited for our portfolio, we would consider the dividend yield and frequency of distribution, fees, and geographical exposure of the REIT ETF.
  • Singapore REIT ETFs currently offer a dividend yield of 4% and above. The NikkoAM-Straits Trading Asia Ex Japan REIT ETF has the largest asset under management (AUM) and lowest expense ratio, while offering a dividend yield of close to 5.5%.
  • The two ETFs that offer pure exposure to Singapore REITs are the Lion-Phillip S-REIT ETF and CSOP iEdge S-REIT Leaders ETF.

What happened? 

Singapore REITs are well loved by many investors as they are seen to be a source of passive income through the dividends they provide.

However, many may not have the time to analyse each REIT and decide which is the best REIT to own. 

Here comes Singapore REIT ETFs – which allow you to own a diversified basket of Singapore REITs in one trade. 

In fact, Singapore REIT ETFs have grown so much in popularity, that the combined asset under management (AUM) of the 5 REIT ETFs listed on the SGX doubled in 2 years to reach S$901 million in mid-September 2022.  

We’re going to take a closer look at Singapore REIT ETFs and uncover what is driving such investor interest. 

Why Singapore REIT ETFs?

As with ETFs in general, Singapore REIT ETFs offer instant diversification across various industries and geographies compared to owning single REITs. 

This means that the risks are spread out compared to owning single REITs.

Singapore REIT ETFs are also professionally managed, and REITs which have become larger or more liquid are included in the ETF as it is automatically rebalanced. 

Lastly, Singapore REIT ETFs are intended to offer a low cost way to own this basket of REITs, while offering the convenience of transacting once via the ETF.

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Source: SGX

Introducing Singapore REIT ETFs

There are 5 Singapore REIT ETFs listed on the SGX we can consider. 

Each of them is benchmarked to a different index, as shown in the table below. 

The largest Singapore REIT ETF based on its assets under management (AUM) is the NikkoAM – StraitsTrading Asia Ex Japan REIT ETF, with AUM of S$376 million as of 30 November 2022. 

REIT ETFBenchmarkAUM (S$ million)
NikkoAM - Straits Trading Asia Ex Japan REIT ETFFTSE EPRA Nareit Asia ex Japan Net Total Return REIT Index376
Lion-Phillip S-Reit ETF Morningstar® Singapore REIT Yield Focus IndexSM299
CSOP iEdge S-Reit Leaders ETFiEdge S-REIT Leaders Index91
UOB Asia Pacific Green REIT ETFiEdge-UOB APAC Yield Focus Green REIT Index71
Phillip SGX APAC Dividend Leaders REIT ETFiEdge APAC ex Japan Dividend Leaders REIT Index15

Source: Bloomberg, SGX Securities & ETF Manager’s websites, as of 30 November 2022

What to consider when buying Singapore REIT ETFs? 

With so many Singapore REIT ETFs to choose from, you might be wondering how we can select a Singapore REIT ETF best suited for our portfolios. 

There are a few factors we would consider, and these would include:

  1. Dividend yield 
  2. Frequency of dividend
  3. Fees and charges 
  4. Geographical exposure 
  5. Sustainability

#1 – Dividend yield 

As REIT investors, we are naturally interested in the dividend yield we are able to get from the REITs. 

Singapore REIT ETFs offer a dividend yield of 4% and above as of 30 November 2022. 

Amongst the various Singapore REIT ETFs, the dividend yield of the CSOP iEdge S-REIT Leaders ETF is the highest at 5.86%.

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Description automatically generated#2 – Dividend frequency 

Most of the Singapore REIT ETFs make semi-annual dividend distributions to investors. 

The UOB Asia Pacific Green REIT ETF changed to making semi-annual distributions from quarterly distributions in November this year.

Following the change, the NikkoAM – Straits Trading Asia Ex Japan REIT ETF is the only ETF offering quarterly distributions. 

REIT ETFDividend frequency
Lion-Phillip S-Reit ETF Semi-Annual
CSOP iEdge S-Reit Leaders ETFSemi-Annual
Phillip SGX APAC Dividend Leaders Reit ETFSemi-Annual
UOB Asia Pacific Green Reit ETFSemi-Annual
NikkoAM - Straits Trading Asia Ex Japan REIT ETFQuarterly

#3 – Expense ratio

As an investor in ETFs, we would want the fees incurred in managing the ETF and other fees such as trustee fees to be kept low. 

The expense ratio of the Singapore REIT ETFs range from 0.55-0.80% per annum. 

The NikkoAM - Straits Trading Asia Ex Japan REIT ETF has the lowest expense ratio of just 0.55%.

REIT ETFExpense Ratio
NikkoAM - Straits Trading Asia Ex Japan REIT ETF0.55%
Lion-Phillip S-Reit ETF 0.60%
CSOP iEdge S-Reit Leaders ETF0.60%
Phillip SGX APAC Dividend Leaders REIT ETF0.65%
UOB Asia Pacific Green REIT ETFUp to 0.80%

#4 – Geographical exposure 

There are two Singapore REIT ETFs which offer pure exposure to S-REITs – the Lion-Phillip S-REIT ETF and the CSOP iEdge S-REIT Leaders ETF. 

The other three Singapore REIT ETFs have broader exposure to other regions in the region, including Hong Kong and Australia. 

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Description automatically generated#5 – Sustainability

The UOB APAC Green REIT ETF is the world’s first APAC Green REIT ETF, and offers exposure to REITs with relatively better environmental performance. 

How do the Singapore REIT ETFs fare on these measures? 

NikkoAM-StraitsTrading Asia Ex Japan Reit ETF

Dividend yield 5.48%
Frequency of distributionQuarterly
Expense ratio  0.55% p.a.
Geographical exposure Asia Ex Japan
SustainabilityNot sustainability focused

The objective of the NikkoAM-StraitsTrading Asia Ex Japan Reit ETF is to replicate the performance of FTSE EPRA Nareit Asia ex Japan REITs 10% Capped Price Index.

Close to 75% of the underlying REITs in the ETF are listed in Singapore, while 15% are listed in Hong Kong. 

Lion-Phillip S-Reit ETF

Dividend yield 5.45%
Frequency of distributionSemi-annual
Expense ratio  0.60% p.a.
Geographical exposure Singapore
SustainabilityNot sustainability focused

The objective of the Lion-Phillip S-REIT ETF is to replicate as closely as possible the performance of the Morningstar Singapore REIT Yield Focus Index.

The ETF is the largest pure S-REIT ETF by AUM listed on the SGX. 

UOB Asia Pacific Green REIT ETF

Dividend yield 5.29%
Frequency of distributionSemi-annual
Expense ratio  Up to 0.8%
Geographical exposure Asia Pacific
SustainabilityGreen REIT

The objective of the UOB Asia Pacific Green REIT ETF is to track the iEdge-UOB APAC Yield Focus Green REIT index.

CSOP iEdge S-Reit Leaders ETF

Dividend yield 5.86%
Frequency of distributionSemi-annual
Expense ratio  0.60% p.a.
Geographical exposure Singapore
SustainabilityNot sustainability focused

The objective of the CSOP iEdge S-Reit Leaders ETFis to track the performance of the iEdge S-REIT Leaders Index.

The index is adjusted for liquidity, where constituents with a higher free-float market capitalisation are given a higher weightage.  

Phillip SGX APAC Dividend Leaders Reit ETF

Dividend yield 4.00%
Frequency of distributionSemi-annual
Expense ratio  0.65% p.a.
Geographical exposure Asia Ex Japan
SustainabilityNot sustainability focused

The objective of the Phillip SGX APAC Dividend Leaders Reit ETF is to track the SGX APAC Ex-Japan Dividend Leaders REIT Index. 

The index measures the performance of 30 REITs that pay the largest total dividends while observing size, representation, free-float and liquidity constraints.

What would Beansprout do?

If you’re keen to build your passive income by building a REITs portfolio but intimidated by having to analyse individual REITs, then it might be worthwhile to start looking at Singapore REIT ETFs. 

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

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

If you’re looking for the Singapore REIT ETF with the largest AUM, then it’s the NikkoAM-StraitsTrading Asia Ex Japan REIT ETF. 

If you’re looking for the Singapore REIT ETF which can offer you quarterly dividends, then it’s the NikkoAM-StraitsTrading Asia Ex Japan REIT ETF. 

If you’re looking for the Singapore REIT ETF which has the lowest expense ratio, then it’s the NikkoAM-StraitsTrading Asia Ex Japan REIT ETF. 

If you’re looking for the Singapore REIT ETF which offers the highest dividend yield, then it’s the CSOP iEdge S-REIT Leaders ETF.

If you’re looking for the Singapore REIT ETF which owns REITs with better environmental performance, then it’s the UOB Asia Pacific Green REIT ETF. 

If you want to limit your exposure to REITs listed in Singapore, then it’s the CSOP iEdge S-REIT Leaders ETF or Lion-Phillip S-Reit ETF. 

There’s probably a Singapore REIT ETF you can consider for your specific needs, and you can visit our ETF page to find out more about each of these ETFs.

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