REIT ETFs: The Ultimate Singaporean Guide to Investing in 'Em
Real estate investment trusts (REITs) pool money from investors like you and me to invest in a portfolio of income-generating real estate assets.
Such assets can range from shopping centres to industrial buildings.
In exchange for our investment in a REIT, we are entitled to distributions at regular intervals, usually on a quarterly basis.
Currently, there are 42 REITs and property trusts listed in Singapore, making our country one of Asia’s largest markets for them.
There are two main ways to get exposure to the REIT market.
What Are REIT ETFs?
ETF is an investment that tracks the performance of an underlying asset.
In this case, a REIT ETF tracks the performance of a specific REIT index. In Singapore, there are three REIT ETFs tracking different indices.
The REIT ETFs listed in our city-state are:
- Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYJ) (SGX: BYI)
- NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA) (SGX: COI)
- Lion-Phillip S-REIT ETF (SGX: CLR)
More on the REIT ETFs later, but first…
Why REIT ETFs?
There are four main benefits of investing in REIT ETFs:
- Instant diversification — REIT ETFs allow investors to own a portfolio of REITs in different sectors with a click of a button
- Passive — Investors don’t have to pick and monitor individual REITs, so buying REIT ETFs is an excellent option for time-starved investors
- Low cost — Since investors don’t have to purchase different REITs one-by-one, they save on commission costs that they would have incurred otherwise
- Professional management — REIT ETFs are also professionally managed where there’s automatic rebalancing and corporate actions, such as rights issues, are taken care of on behalf of unitholders
Phillip SGX APAC Dividend Leaders REIT ETF
Of the three REIT ETFs, Phillip SGX APAC Dividend Leaders REIT ETF is the oldest, having been listed on 20 October 2016.
It is also the first-ever ETF focusing on Asia Pacific REITs.
This ETF follows a smart beta strategy that ranks and weights the underlying REITs according to total dividends paid in the last 12 months, with an aim of enhancing returns above that of traditional market-cap weighted ETFs.
Phillip SGX APAC Dividend Leaders REIT ETF, which has 30 constituents, tracks the iEdge APAC ex Japan Dividend Leaders REIT Index.
In terms of geographical allocation, most of the REITs in the ETF are concentrated in Australia, followed by Singapore, Hong Kong, and Thailand.
With regards to the REIT sector allocation, diversified REITs take up most of the ETF.
The following table shows the top 10 constituents of Phillip SGX APAC Dividend Leaders REIT ETF (data as of 31 May 2021):
REIT Weight Country
Link REIT 9.85% Hong Kong
Mirvac Group 8.58% Australia
Dexus 8.04% Australia
Stockland 7.56% Australia
Goodman Group 7.52% Australia
Scentre Group 6.52% Australia
GPT Group 6.11% Australia
Ascendas REIT 6.02% Singapore
Mapletree Logistics Trust 3.03% Singapore
Mapletree Industrial Trust 2.90% Singapore
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF is the world’s first Asia ex-Japan REIT ETF, and it tracks the FTSE EPRA Nareit Asia ex Japan Net Total Return REIT Index.
Most of the REITs in the ETF are concentrated in Singapore and Hong Kong.
In terms of REIT industry allocation, retail REITs take up around 37% of the ETF, followed by industrial REITs, and diversified REITs.
The following table shows the top 10 constituents of NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (data as of 31 May 2021):
REIT Weight Country
Link REIT 9.8% Hong Kong
Ascendas REIT 9.8% Singapore
CapitaLand Integrated Commercial Trust 9.6% Singapore
Mapletree Logistics Trust 7.8% Singapore
Mapletree Industrial Trust 6.8% Singapore
Mapletree Commercial Trust 6.2% Singapore
Frasers Logistics & Commercial Trust 5.0% Singapore
Keppel DC REIT 4.2% Singapore
Suntec REIT 4.1% Singapore
Embassy Office Parks REIT 3.5% India
Lion-Phillip S-REIT ETF
Lion-Phillip S-REIT ETF is Singapore’s first ETF dedicated entirely to Singapore REITs.
Among the three REIT ETFs, this ETF is the latest kid on the block as it was listed on 30 October 2017.
Lion-Phillip S-REIT ETF tracks the performance of Morningstar’s Singapore REIT Yield Focus Index.
The index is one of Morningstar’s strategic beta indexes that uses a proprietary three-factor rules-based investment methodology that emphasises 1) business quality; 2) financial health and 3) dividend yield.
Industrial REITs make up most of Lion-Phillip S-REIT ETF’s sector allocation, followed by retail and office.
The following pie chart shows the breakdown of the different REIT sectors in Lion-Phillip S-REIT ETF:
Lion-Phillip S-REIT ETF contains 27 high-quality Singapore REITs, and the weight of each REIT is capped at 10%.
As of end-May 2021, the top 10 constituents of the Lion-Phillip S-REIT ETF were:
Mapletree Industrial Trust 9.7%
CapitaLand Integrated Commercial Trust 9.6%
Mapletree Logistics Trust 9.5%
Ascendas REIT 9.2%
Keppel DC REIT 8.8%
Mapletree Commercial Trust 8.6%
Parkway Life REIT 6.3%
Frasers Centrepoint Trust 6.3%
Keppel REIT 5.3%
Frasers Logistics and Commercial Trust 4.3%
Comparison of the REIT ETFs
Here’s a quick comparison of the three REIT ETFs that we just discussed:
Phillip SGX APAC Dividend Leaders REIT ETF NikkoAM-StraitsTrading Asia Ex Japan REIT ETF Lion-Phillip S-REIT ETF
Benchmark index iEdge APAC ex Japan Dividend Leaders REIT Index FTSE EPRA Nareit Asia ex Japan
Net Total Return REIT Index
REIT Yield Focus Index
Main geographies where underlying REITs are listed Australia and Singapore Singapore and Hong Kong Singapore
Top three REIT constituents Link REIT, Mirvac Group, and Dexus Link REIT, Ascendas REIT, and CapitaLand Integrated Commercial Trust Mapletree Industrial Trust, CapitaLand Integrated Commercial Trust, and Mapletree Logistics Trust
Number of holdings 30 28 27
Distribution frequency Semi-annual Quarterly Semi-annual
Dividend yield 2.1% 3.8% 4.7%
Total expense ratio per annum 1.08% 0.60% 0.60%
Trading board lot
100 10 100
Stock ticker BYJ (SGD) and
CFA (SGD) and
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer may have a vested interest in the companies mentioned.