Recently I decided to add an exchange traded fund (ETF) tracking the Straits Times Index (STI) to my portfolio. My reasons: I more or less believe in the future of Singapore as a great place to do business and I have too many ETFs in Hong Kong Dollars already.
Which ETF is the best choice for tracking the STI?
Looking for an ETF tracking the STI there are two main choices:
1) SPDR® Straits Times Index ETF
2) Nikko AM Singapore STI ETF
Which one is better? Here is the research:
| SPDR® Straits Times Index ETF | Nikko AM Singapore STI ETF | |
| SGX Code | ES3 | G3B |
| Official website | Link | Link |
| Expense Ratio | 0.30% | 0.42% |
| Lot size | 100 | 100 |
| Dividend distribution | 2x per year (February/August) | 2x per year (January/July) |
| Fund Size | SGD 329.5 million | SGD 92.9 million |
| Bid/Ask | $3.37 / $3.38 | $3.37 / $3.39 |
(All data from July 1, 2015)
All things considered SPDR® Straits Times Index ETF wins hands-down.
The main reason are the lower expenses of 0.30% vs. 0.42%. This means that holding SGD 10,000 in the SPDR® Straits Times Index ETF costs SGD 12 less per year than holding the same amount in Nikko AM’s product.
The tighter bid/ask spread and bigger fund size of the SPDR® Straits Times Index ETF makes it easier and more cost efficient to trade.
Conclusion: SPDR® Straits Times Index ETF wins!
How do dividends work with the SPDR® Straits Times Index ETF and the Nikko AM Singapore STI ETF?
For some reason both companies are not really forthcoming with this information and they just state that dividends will be paid out twice a year.
Fortunately savvy investors can dig out the information themselves via the SGX website under “corporate actions”
Here you can see the full dividend schedule for both funds:
SPDR® Straits Times Index ETF: Dividends
Name on SGX Website: STI ETF
| Ex-date | Record date | Payable date | Dividend per share |
| 30 Jan 2015 | 03 Feb 2015 | 17 Feb 2015 | SGD 0.048 |
| 07 Aug 2014 | 11 Aug 2014 | 19 Aug 2014 | SGD 0.045 |
| 04 Feb 2014 | 06 Feb 2014 | 20 Feb 2014 | SGD 0.043 |
| 15 Aug 2013 | 19 Aug 2013 | 28 Aug 2013 | SGD 0.045 |
| 01 Feb 2013 | 05 Feb 2013 | 19 Feb 2013 | SGD 0.04 |
Nikko AM Singapore STI ETF
Name on SGX Website: NIKKO AM SINGAPORE STI ETF
| Ex-date | Record date | Payable date | Dividend per share |
| 01 Jul 2015 | 03 Jul 2015 | 15 Jul 2015 | SGD 0.0482 |
| 02 Jan 2015 | 06 Jan 2015 | 15 Jan 2015 | SGD 0.0495 |
| 01 Jul 2014 | 03 Jul 2014 | 15 Jul 2014 | SGD 0.0465 |
| 10 Oct 2013 | 14 Oct 2013 | 31 Oct 2013 | SGD 0.045 |
| 29 Apr 2013 | 02 May 2013 | 10 May 2013 | SGD 0.035 |
So why did I buy the Nikko AM Singapore ETF last month and not the SPDR® Straits Times Index ETF?
The answer is as simple as it is embarrassing: I did not do my research properly first.
Learn from my mistake… 😉
Hi Singvestor,
I guess i’m in the same boat? Recently i began reading up through articles online & sgx stock carnival and decided to make a headstart with investing in index funds; & I found this option (Nikko STI ETF) under the POSB Monthly Investment Plan and planned to have this investment over a 5 Year period with monthly input of $100 (60mths x $100), and sell it at end of the 5th year mainly to benefit from its capital appreciation. Would the Expense ratio be an cause for concern in my case?
Hi Kah, interesting question! It inspired me to do the math and answer you here via blogpost: http://singvestor.com/posb-invest-saver-analysis-and-review/
Hi, I am currently doing homework before making my first purchase of SPDR STI ETF.
Noticed that it made a dividend payout of 0.107 in Jan 2016 – basically the full dividend of the entire year for the previous few years.
Is there a change in dividend payout policy or the likes that you could share?
Hi Mich! You can select the STI ETF on the Singapore Exchange Website to find out the dividend payments: http://sgx.com/wps/portal/sgxweb/home/company_disclosure/corporate_action
Where did you get the 0.107 from? I cannot find it anywhere.
Does the SPDR Straits Times Index Fund – ES3.SI – have a DRIPS programme?
To my best knowledge it does not have one. I normally manually reinvest the dividends according to my asset allocation.
Hi Singinvestor,
I started investing in Nikko STI ETF for slightly more than a year now, putting in around 400 every month through POSB’s MIP. Recently I opened a trading account with Maybank Kim Eng and am considering to go for SPDR STI ETF as a MIP. Does it make sense to continue investing in both STI ETFs or should I stop my Nikko ETF and just focus on SPDR? Any advise will be greatly appreciated!
I would suggest to only invest in one of those to reduce transaction costs. In the end there is not much difference between the two funds.