Lion-OCBC Securities APAC Financials Dividend Plus ETF

Lion-OCBC Securities APAC Financials Dividend Plus ETF

Recently, OCBC has been promoting their Lion-OCBC Securities APAC Financials Dividend Plus ETF which is the world’s first APAC Financials ETF. As the name implies, the ETF investment focus is on 30 largest financial institutions by free-float market capitalisation.

Based on the prospectus, the ETF aims to payout stable quarterly distribution of minimum 5% per annum of the issue price (S$1 per unit) for first 2 years. From year 3 onwards, the ETF intend to declare quarterly distributions of around 5% per annum of the SGD Class NAV less the expenses of the Class in every March, June, September and December. Distributions are not guaranteed and may fluctuate.

What is ETF?

If you are not familiar with ETF, an Exchange-Traded Fund (ETF) is a pooled investment security that can be bought and sold like an individual stock.

Lion-OCBC Securities APAC Financials Dividend Plus ETF will be listed on the SGX on Monday, 13th May 2024. The stock code is YLD for the Singapore dollar (SGD) denomination and YLU for the United States dollar (USD) denomination on the Singapore Exchange (SGX).

You can invest using Cash or Supplementary Retirement Scheme.

iEdge APAC Financials Dividend Plus Index Performance

Lion-OCBC Securities APAC Financials Dividend Plus ETF Index Performance

As shared in the prospectus, the aim of Lion-OCBC Securities APAC Financials Dividend Plus ETF is to replicate as closely as possible, before expenses, the performance of the iEdge APAC Financials Dividend Plus Index using a direct investment policy of investing in all, or substantially all, of the underlying Index Securities.

Thus, if we look at the past performance of iEdge APAC Financials Dividend Plus Index, it has performed better than the Straits Times Index and iEdge S-REIT Leaders Index. Based on the above graph, the YTD return is 8.00%.

Lion-OCBC Securities APAC Financials Dividend Plus ETF Breakdown By Sector and Country

Lion-OCBC Securities APAC Financials Dividend Plus ETF Breakdown By Sector and Country

Now, let us look at the break down of by Sector and Country. In terms of the breakdown by sector, the ETF is overweight on the Banking sector which is 84.9%.

On the right, we can see that the investment is spread across Singapore, Japan, Australia, Hong Kong, South Korea and Malaysia.

Below are the top 10 holdings of this ETF which forms a total weightage of 56.2%.

Constituents: DBS Group Holdings Ltd
Country: Singapore
Weight (%): 7.3%
Constituents: Oversea-Chinese Banking Corp Ltd
Country: Singapore
Weight (%): 7.0%
Constituents: United Overseas Bank Ltd
Country: Singapore
Weight (%): 6.1%
Constituents: KB Financial Group Inc
Country: South Korea
Weight (%): 6.1%
Constituents: Sumitomo Mitsui Financial Group Inc
Country: Japan
Weight (%): 5.9%
Constituents: Shinhan Financial Group Co Ltd
Country: South Korea
Weight (%): 5.9%
Constituents: China Construction Bank Corp
Country: Hong Kong
Weight (%): 5.1%
Constituents: Mizuho Financial Group Inc
Country: Japan
Weight (%): 4.3%
Constituents: Hana Financial Group
Country: South Korea
Weight (%): 4.3%
Constituents: Commonwealth Bank of Australia
Country: Australia
Weight (%): 4.2%

Why Invest In Lion-OCBC Securities APAC Financials Dividend Plus ETF?

In my opinion, by buying this single ETF, you will
  • Build passive income as the ETF pays an estimate yield of 5% per annum.
  • Gain exposure to all 3 Singapore banks, namely DBS Group Holdings Ltd, Oversea-Chinese Banking Corp Ltd and United Overseas Bank Ltd.

This ETF should continue to perform well if the Fed maintains their high interest rates which benefits the banking sectors.

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