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Nikko AM-Straits Trading Asia ex Japan REIT ETF

Nikko AM-Straits Trading Asia ex Japan REIT ETF is the second ETF made up of REITs to be launched. The first ETF REIT to be launched is SGX APAC ex Japan Dividend Leaders REIT IndexThe constituents of these two REIT ETF are very different.

There are no Australia REITs in Nikko AM-Straits Trading Asia ex Japan REIT ETF. On the other hand, SGX APAC ex Japan Dividend Leaders REIT Index has no Malaysia REITs.

Nikko AM-Straits Trading Asia ex Japan REIT ETF will start trading on the Singapore Exchange on 29 March 2017. The initial offer price is SGD$1.00. The dividends are estimated at 5% per annum and paid on a quarterly basis.

I noticed the following about Nikko AM-Straits Trading Asia ex Japan REIT ETF

  • The ETF is heavy weighted on Link REIT, Mapletree Commercial Trust, Ascendas REIT, Suntec REIT and Capitaland Mall Trust. I already held Mapletree Commercial Trust, Suntec REIT and Capitaland Mall Trust in my stock portfolio.
  • The ETF comprises of 44.4% Industrial & Office REITs. Current falling office rental rates and headwinds in industrial sector will impact this ETF performance.
  • The ETF comprises of  40.4% Retail REITs. Current headwinds in tourism industry will impact this ETF performance.

Below are the 23 constituents that make up the Nikko AM-Straits Trading Asia ex Japan REIT ETF.

Name Country Industry Index Weight
Ascott REIT Singapore Hospitality 2.15
Hui Xian REIT Hong Kong Diversified 3.2
Spring REIT Hong Kong Industrial + Office 0.84
Yuexiu REIT Hong Kong Retail 1.93
CapitaLand Retail China Trust Singapore Retail 1.71
Mapletree Greater China Commercial Trust Singapore Retail 4.15
Champion REIT Hong Kong Industrial + Office 4.14
Link REIT Hong Kong Retail 9.68
Fortune REIT Hong Kong Retail 5
Lippo Malls Indonesia Retail Trust Singapore Retail 1.78
First REIT Singapore Retail 1.49
Sunway REIT Malaysia Retail 2.18
Pavilion REIT Malaysia Retail 1.27
IGB REIT Malaysia Retail 2.13
Mapletree Commercial Trust Singapore Diversified 6.67
CDL Hospitality Trust Singapore Hospitality 2.08
Mapletree Logistics Trust Singapore Industrial 3.56
Keppel REIT Singapore Office 4.43
Mapletree Industrial Trust Singapore Industrial 4.77
Ascendas REIT Singapore Industrial 10.28
CapitaLand Commercial Trust Singapore Office 7.03
Suntec REIT Singapore Retail + Office 9.62
CapitaLand Mall Trust Singapore Retail 9.88

Will I Buy this REIT?

Most likely not. This ETF is an attractive fund to hold for those who does not have any REITs in their stock portfolio yet. Just by buying this ETF, you get to enjoy 5% dividend yield from 23 REITs across Singapore, Hong Kong and Malaysia. As you can see, I already own a majority of REITs in my stock portfolio and thus I shall be giving this a miss.

4 thoughts on “Nikko AM-Straits Trading Asia ex Japan REIT ETF

  1. Agree with you.

    I attended their presentation.

    It seems this ETF with most of their constituents are in the sunset business. Retail sectors are in terrible shape with these online shoppings. Office rentals are softening. Grade A office rent are doing Grade B rent, most industrial properties are relocating to Iskander and Hotels are being threatened by AirBnB. The advent of AI and sharing economy is not helping either.
    The 5% yield is not inclusive of taxes by foreign countries.

    1. Disagree completely.

      I was there at the presentation too. These are good solid REIT names in Asia. Occupancy levels are super high. As high as 99%! Sunset industry?? Lol!

      I just subscribed into the ETF. Like the regular payout and stable yield levels. Some may find that boring. Hahaha! I have no problems with boringly collecting ‘rent’.

    2. Actually, you are missing the point. MySweetRetirement is saying he is not buying this ETF because he ALREADY owns a lot of the names in his personal portfolio. Which means he/she actually likes the counters. These are stable quality names with high occupancy levels and low price-to-book values.

      In any case, 5%pa net payout for a diversified portfolio sounds fair.

      The only concern I have is the effect of rising interest rates. But rising interest affects all types of yield products including bonds. And, the recent FED hike this week seems to have a muted effect on REITS, unlike bonds. Still, it remains to be seem how this eventually pans out.

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