Next week will see CSOP Asset Management list its second ETF on SGX – CSOP iEdge S-REIT Leaders Index ETF (Stock Code: SGD counter: SRT/ USD counter: SRU).
Advised by JLP Asset Management Asia, an investment manager in global real estate, SRT/SRU will adopt a replication strategy to track the performance of the iEdge S-REIT Leaders Index to present the investment opportunities of the S-REITs market. The SRT/SRU will be available for initial investment in SGD and trading in both SGD and USD at an inception price of SGD1 with board lot size of 10 units.
A real estate investment trust in Singapore (“S-REIT”) is a fund on SGX that invests in a portfolio of income generating real estate assets such as shopping malls, offices or hotels, usually with a view to generating income for unit holders of the fund. The firm writes that Singapore is renowned as one of the largest and most fast-growing REITs markets in Asia Pacific with market size of over SGD110 billion and has grown at CAGR of 11 per cent from 2010 to the end of 2020.
The firm writes that thanks to the high payout ratio specified by Singapore’s regulation, S-REITs offer the highest dividend yield of 5.1 per cent compared with other major asset classes in Singapore. In terms of performance, over the last 10 years, S-REITs have averaged an annualised total return of 10.7 per cent and 90-day volatility of 10.5 per cent, which is competitive among major equity indexes.
Described as ‘delicately designed by SGX’, the Index is the most liquid representation of the S-REITs market in Singapore. The firm writes that it is an adjusted free-float market capitalisation weighted index that measures the performance of the largest and most tradable REITs in Singapore. Comprehensively consisting of 28 constituents from various industries and regions, it has a total market capitalisation of about SGD 68.35 billion. The Index has gained 67.2 per cent on a total return basis over the past five years, outperforming not only the major global REITs indices but also other S-REITs indices tracked by existing S-REIT ETFs akin. Tracking the Index, CSOP iEdge S-REIT Leaders Index ETF will enable investors to capture the opportunities of the lucrative S-REITs sector with great diversification and easy tradability at minimal investment of only SGD10, the firm writes.
Ng Kin Yee, Managing Director and Head of Data, Connectivity and Indices, SGX, says, “We are delighted to partner CSOP Asset Management as it brings to market the first ETF tracking the iEdge S-REIT Leaders Index – the benchmark index for Singapore’s REITs market and one of the most widely referenced iEdge indices. The index measures the performance of the largest and most liquid REITs listed in Singapore; with this new ETF, investors can have easy, efficient and diversified access to the S-REITs market that continues to grow and attract assets across geographies and segments.”
Ding Chen, CEO of CSOP Asset Management says: “We are pleased to list the ‘CSOP iEdge S-REIT Leaders Index ETF’ on the Singapore Exchange. Following the successful launch of the ‘ICBC CSOP FTSE Chinese Government Bond Index ETF’ in September 2020, this is the second ETF product issued by CSOP in Singapore. Singapore REITs is well known for its sustainable income stream and potential capital appreciation, therefore offering an attractive proposition for yield seeking investors. The ETF provides investors with a low cost, transparent and fuss-free portfolio. I believe the successful listing of the product will appeal to investors seeking for a diversified REITs portfolio and be a good addition to Singapore’s ETF market.”