Amova-StraitsTrading Asia ex Japan REIT ETF Faces Dividend Pressure, Target Price Cut to S$0.795 April 28, 2026
Company Overview
The Amova-StraitsTrading Asia ex Japan REIT ETF (AXJREITS) provides investors with diversified exposure to real estate investment trusts across Asia, excluding Japan. The ETF maintains a well-balanced portfolio across eight different sectors, with industrial properties representing the largest allocation at 24.8%, followed by retail at 24.6%. The fund’s top holdings have seen some reshuffling, with CapitaLand Integrated Commercial Trust advancing from third to first position whilst maintaining the same three leading constituents.
Valuation and Target Price Adjustment
Phillip Securities Research has revised its target price for AXJREITS downward to S$0.795, reduced from the previous S$0.84, whilst maintaining an ACCUMULATE recommendation. The valuation methodology combines historical dividend yield spread and price-to-book ratios, generating prices of S$0.79 and S$0.80 respectively. Equal weighting of both valuation approaches resulted in the new target price.
Dividend Performance Challenges
The ETF faces significant dividend headwinds, with its distribution per unit (DPU) currently sitting below negative one standard deviation from historical norms. This underperformance contrasts with comparable Singapore-focused REIT ETFs, including the Lion-Phillip S-REIT ETF (SREITS) and CSOP iEdge S-REIT Leaders Index ETF (SRT), both of which maintain DPU levels closer to their long-term averages.
Market Pressures and Sector Vulnerabilities
Several factors contribute to AXJREITS’ dividend challenges. The ETF demonstrates higher interest rate sensitivity compared to Singapore REITs, making it more vulnerable to monetary policy changes. Additionally, weaker property markets, particularly in China and Hong Kong, have negatively impacted performance. The fund’s sector composition also presents challenges, with greater exposure to office and retail properties compared to Singapore REITs, sectors that have proven less resilient in current market conditions.
Frequently Asked Questions
Q: What is Phillip Securities Research’s current recommendation and target price for AXJREITS?
A: Phillip Securities Research maintains an ACCUMULATE recommendation for AXJREITS with a revised target price of S$0.795, lowered from the previous S$0.84.
Q: How does AXJREITS’ dividend performance compare to other REIT ETFs?
A: AXJREITS’ distribution per unit is currently below negative one standard deviation from historical averages, whilst comparable Singapore REIT ETFs like SREITS and SRT maintain DPU levels closer to their long-term averages.
Q: What are the largest sector allocations in AXJREITS?
A: Industrial properties represent the largest sector allocation at 24.8%, followed by retail at 24.6%. The ETF is diversified across eight different sectors in total.
Q: Which factors are pressuring AXJREITS’ dividend performance?
A: Three main factors contribute to dividend pressure: higher interest rate sensitivity, weaker property markets particularly in China and Hong Kong, and a less resilient sector mix with more office and retail exposure.
Q: How did the top holdings change in AXJREITS?
A: Whilst the top three holdings remain the same companies, CapitaLand Integrated Commercial Trust moved up from third position to become the largest holding in the ETF.
Q: What valuation methodology does Phillip Securities Research use for AXJREITS?
A: The research firm uses a combination of historical dividend yield spread and price-to-book ratios, applying equal weighting to both valuation methods to determine the target price.
Q: What geographic markets are affecting AXJREITS’ performance?
A: China and Hong Kong property markets have shown particular weakness, negatively impacting the ETF’s overall performance given its Asia ex-Japan exposure.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Helena Wang
Helena covers Hardware / Marketplaces / ETF. Helena graduated with a master's degree in Financial Technology from Nanyang Technological University.
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