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SGX launches ETF made up of REITS

SGX APAC ex Japan Dividend Leaders REIT Classification

Singapore Exchange (SGX) has launched the SGX APAC ex Japan Dividend Leaders REIT Index which is the first Exchange Traded Fund (ETF) that is made up of 30 REITs across Asia Pacific, excluding Japan.

SGX APAC ex Japan Dividend Leaders REIT Index demonstrated a yield of 4.53% over the period of twelve months to 29 July 2016.

My personal opinion of SGX APAC ex Japan Dividend Leaders REIT Index is diversification. REITs by nature are dividend yielding instruments however most REITs are concentrated in a particular industry and when the particular industry faces a downturn, the REIT performance gets affected.

For example, in the economic downturn in the hospitality industry, REITs like Far East Hospitality Trust, OUE Hospitality Trust gets impacted. The SGX APAC ex Japan Dividend Leaders REIT Index will be able to achieve some form of diversification. However, we should also note the classification of the REITs that make up this ETF.

From the below chart, commercial REITs make up 72.81%. Not sure what is diversified REITs but it makes up 16.54%. Residential REITs make up 9.74% and specialized REITS make up 0.91%.

SGX APAC ex Japan Dividend Leaders REIT Classification

From the fact sheet, the ETF will consist of REITs from 3 countries. Australia makes up 61%, Singapore 27% and Hong Kong 12%. SGX APAC ex Japan Dividend Leaders REIT Index is concentrated on Australia.

SGX APAC ex Japan Dividend Leaders REIT Geographical Breakdown

Below are the top 10 constituents that make up the SGX APAC ex Japan Dividend Leaders REIT.

Company Name Country Industry Index Weight
LINK REIT Hong Kong Commercial REIT 11.32%
SCENTRE GROUP Australia Commercial REIT 10.62%
WESTFIELD CORP Australia Commercial REIT 8.29%
STOCKLAND Australia Residential REIT 8.73%
VICINITY CENTRES Australia Commercial REIT 7.59%
GPT GROUP Australia Diversified REIT 6.15%
GOODMAN GROUP Australia Commercial REIT 5.44%
MIRVAC GROUP Australia Diversified REIT 5.48%
ASCENDAS REAL ESTATE INV TRT Singapore Commercial REIT 4.43%
CAPITALAND MALL TRUST Singapore Commercial REIT 3.47%

Will you be investing in the SGX APAC ex Japan Dividend Leaders REIT Index?

12 thoughts to “SGX launches ETF made up of REITS”

    1. Indeed. Why so huge percentage in Aus REITs? Naming this Asia REIT ETF is misleading when 60% is Australia exposure. Maybe should call this Australia REIT ETF instead.

      And Australia REITs need to pay withholding tax on any dividends going out of the country. Australia not very tax friendly for foreign investors.

      Also, Australia economy has been bad in the last few years. Very dependent on commodity exports like coal and iron ore. Prices have been declining rapidly in the last few years, dragging down Aus economy.

      Won’t be investing in this ETF for sure.

  1. Hi,

    Could you advise how to go about investing in ETF ? I’m new to ETF.
    Where could I find out all Reit ETFs that I could invest in Singapore.

    Thanks in advance.

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