2025 Singapore ETF Picks: Bond and REIT Strategies for Stable Returns April 23, 2025
Introduction: Think of This as Your Investment “Recipe Book”
Imagine you’re learning to cook. You could toss random ingredients into a pot and hope for the best—or you could follow a recipe. For new investors, Exchange-Traded Funds (ETFs) are like pre-mixed recipe kits: they bundle diverse investments into one simple package. In Singapore’s 2025 market, where economic growth is steady but sprinkled with risks such as trade tensions and inflation, ETFs offer a way to invest without needing a Michelin-star chef’s skills. Let’s break down why bonds and REITs are the “salt and pepper” of your portfolio this year—reliable, essential, and surprisingly versatile.
1. Singapore’s 2025 Economy: The Slow-and-Steady Tortoise Wins
Think of Singapore’s economy as a hybrid car. It’s not breaking speed records (1-3% GDP growth), but it’s fuel-efficient, reliable, and built to handle bumpy roads (like potential US tariffs). Inflation? It’s simmering like a slow cooker at 1.5-2.5%, not a pressure cooker.
Why It Matters: While trade risks linger (thanks to global politics), Singapore’s secret sauce is adaptability. Factories and tech services are revving up, but tariffs could reroute some growth.
2. ETFs in 2025: Bonds and REITs as Core Portfolio Components
Picture ETFs as sports teams. The SPDR Straits Times Index ETF is the MVP star player, scoring over 29% for 1-year return (as of 14 April 2025). But the real crowd-pleasers? The Nikko AM Bond ETF (your steady goalie with 2.5% returns) and the Lion-Phillip S-REIT ETF (the defender handing you 6% dividends).
Why It Matters: Bond ETFs offer relatively low-risk exposure, similar to fixed deposits but with higher potential returns. Meanwhile, REIT ETFs provide a steady stream of dividend income through exposure to commercial properties such as offices, retail spaces, and logistics centres – making them valuable tools for portfolio diversification.
3. Interest Rates: A Tailwind for Bonds and REITs
The Monetary Authority of Singapore (MAS) has eased its S$NEER policy stance, contributing to a lower interest rate environment. With global central banks, including the U.S. Federal Reserve, signalling potential rate cuts, borrowing costs are expected to decline further.
Why It Matters: Lower interest rates typically boost bond prices and enable REITs to refinance debt at more favourable terms, enhancing returns for investors. Against this backdrop, Singapore’s bond and REIT ETFs present attractive opportunities for income generation and capital stability.
4. New ETFs: Expanding the Dividend Buffet
Singapore’s ETF landscape continues to diversify with new offerings. The Lion-China Merchants Dividend ETF, for instance, introduces a broader range of dividend-focused stocks, expanding investor options beyond traditional REITs and bank names.
Why This Matters:
Greater variety allows investors to build more resilient, income-focused portfolios. Dividend ETFs, with their regular payout structures, offer a reliable stream of income, particularly attractive in an environment of moderated growth and market volatility.
Food for Thought:
Could dividends become the preferred financial “comfort food” for the next generation of investors?
Your 2025 Game Plan: Stability Meets Opportunity
The Playbook:
- Bond ETFs is considered as your portfolio’s safety net. The Nikko AM SGD Investment Grade Corporate Bond ETF offers steady, predictable returns, ideal for risk management and capital preservation.
- REIT ETFs are your income generator. The Lion-Phillip S-REIT ETF, with its 6% yield, provides regular cash flow, enhancing your overall returns without sacrificing liquidity.
Conclusion: The Art of Balancing Your Investment “Diet”
Investing need not feel like solving a complex puzzle. Instead, think of it as assembling a well-balanced portfolio – similar to curating a bento box – blending stability, income, and growth according to your risk appetite and financial goals.
Singapore’s ETF landscape in 2025 offers opportunities that are not merely about chasing returns, but about sustaining resilience in uncertain times. Bonds and REITs remain the essential components – reliable, steady, and critical to long-term financial health.
Final Food for Thought: If your portfolio were a business, would it simply survive a recession – or continue to thrive?
Disclaimer
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About the author
Mr Teo Huan Zi
Mr Teo Huan Zi graduated from Nanyang Technological University (NTU) in 2014 with a Bachelor’s degree in Business, majoring in Banking and Finance.
He currently serves as a dealing manager with a team of more than 10 equity specialists. Additionally, he frequently conducts seminars and webinars to empower his clients with financial and investment knowledge, including fundamental analysis and technical analysis.
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