Phillip SGX APAC Dividend Leaders REIT ETF October 10, 2016

Over the weekend, we have garnered extremely high interest on our company’s latest launch on Real Estate Investment Trust ETF. The initial offering period will be till 13 October 2016, while trading for this counter will start trading 9am on 20 October 2016. It is the first SGX Reit ETF listed in Singapore tracking both local and regional REITS passively.

Putting on the hat of an investor, this is a short table that I think might be useful to know with regards to the subscription of this ETF pre-listing.

Please note that personally, I am currently not vested in this counter to prevent conflicts of interest. I do however own shares that are components of this ETF.

Pros Cons
Diversification – Different Sector + Geography Corporate Taxation on fund for certain countries’ dividends – taxes are not charged to investors
Low Cost Access to a basket of REITS across APAC Concentration Risk – Australia + Retail
Tracks 30 highest dividend stocks – Useful for Passive Income Tracking Error Risk – Due to fees and expenses
Easier to Dollar Cost Average – Rebalance with just 1 ETF instead of getting 30 stocks Foreign Exchange Risk
No brokerage charges – Subscription basis

This ETF gives investors an exposure in Asia ex Japan REITs issuing high dividends. Considering Asia economic prospects of increasing population, growth in mid-tier income families and increasing urbanisation, there are a myriad of factors that pose a strong case to purchase this ETF. Investors need to appreciate the reality that there is a new norm of low growth, low bond yields and relatively low global interest rates which is further fuelled by events like Brexit. We now see capital inflow into “yielding assets” in Asia. The search for yield still remains making REITs an attractive asset class to have in any portfolio. This particular ETF will be useful for retail investors with little time to analyse performance of each stock in the REIT Universe.

The component stocks were screened for factors such as:

Market Capitalisation (measured at each index review date) New Constituents – USD $300mil
Existing Constituents – USD $240mil
Liquidity (Based on minimum median daily traded value measured at each index review date) New Constituents– US$400k
Existing Constituents – $320k
Domicile Not limited to Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand , Philippines, Singapore, South Korea, Taiwan or Thailand

One of the more prevalent questions that was asked amongst clients was what the constituent weightings of the index are and what the 30 stocks are.

Source: http://phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Prospectus.pdf

Source: http://phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Prospectus.pdf

If you wish to know more information about the ETF mentioned above, you can talk to your Dealer at the nearest Phillip Investor Centre. An investment made with knowledge pays the best dividends, we are here to help achieve that.

Factsheet

Source: http://www.phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Product_Info_Sheet_ipo_USD.pdf

Source: http://www.phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Product_Info_Sheet_ipo_USD.pdf

Prospectus

http://phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Prospectus.pdf

Disclaimer

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About the author

Sky Kwah Wen Yao
Dealing Manager
Raffles Place Dealing Team

Sky Kwah is part of the POEMS Equity Dealing Team that provides dealing services to over 17,000 trading account customers.

Sky gives talks in tertiary institutions like NYP & SIM and he often conducts seminars on Fundamental Analysis, most recent was at the InvestFair 2016. He particularly focuses on value stocks in Singapore and the US with a top-down macro approach. He is frequently interviewed by Media Corp News 938Live radio station as a market commenter and he hopes to help clients become better stewards of wealth and believes in succeeding in what truly matters – the fullness of life.

Sky holds a Bachelor Degree of Commerce with a triple major in Financial Accounting, Investment Finance, and Corporate Finance, from the University of Western Australia.