Which fund is the best choice for tracking the Straits Times Index (STI)?

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… 😉

6 thoughts on “Which fund is the best choice for tracking the Straits Times Index (STI)?

  1. Kah says

    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?

  2. Mich says

    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?

    • singvestor says

      To my best knowledge it does not have one. I normally manually reinvest the dividends according to my asset allocation.

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