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REIT ETFs in Singapore Seedly

REIT ETFs: The Ultimate Singaporean Guide to Investing in 'Em

profileSudhan P

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.

Source: Singapore ExchangeThere are two main ways to get exposure to the REIT market.

One is by investing in individual REITs and the other is by buying REIT exchange-traded funds (ETFs)

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. Here in Singapore, there are five REIT ETFs tracking different indices.

The REIT ETFs listed in our city-state are:

  1. Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYJ) (SGX: BYI)
  2. NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA) (SGX: COI)
  3. Lion-Phillip S-REIT ETF (SGX: CLR)
  4. CSOP iEdge S-REIT Leaders Index ETF (SGX: SRT) (SGX: SRU)
  5. UOB APAC Green REIT ETF (SGX: GRN) (SGX: GRE)

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 five 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, and Hong Kong.

With regards to the REIT sector allocation, diversified REITs take up most of the ETF.

Source: Phillip SGX APAC Dividend Leaders REIT ETF factsheet (data as of Oct 2021)

The following table shows the top 10 constituents of Phillip SGX APAC Dividend Leaders REIT ETF (data as of October 2021):

REITWeightCountry
Link REIT9.30%Hong Kong
GPT Group8.94%Australia
Dexus6.97%Australia
Stockland6.60%Australia
Goodman Group6.35%Australia
Ascendas REIT6.27%Singapore
Scentre Group4.91%Australia
Vicinity Centres4.59%Singapore
CapitaLand Integrated Commercial Trust4.59%Singapore
Mirvac Group4.37%Australia

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 office REITs. 

Source: NikkoAM-StraitsTrading Asia ex Japan REIT ETF factsheet (data as of Oct 2021)

The following table shows the top 10 constituents of NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (data as of October 2021):

REITWeightCountry
CapitaLand Integrated Commercial Trust10.8%Singapore
Ascendas REIT9.9%Singapore
Link REIT 9.8%Hong Kong
Mapletree Logistics Trust 6.1%Singapore
Mapletree Industrial Trust 5.4%Singapore
Mapletree Commercial Trust 5.1%Singapore
Frasers Logistics & Commercial Trust4.5%Singapore
Embassy Office Parks REIT3.5%India
Suntec REIT3.3%Singapore
Keppel DC REIT 3.0%Singapore

Lion-Phillip S-REIT ETF

Lion-Phillip S-REIT ETF is Singapore’s first ETF dedicated entirely to Singapore REITs.

This 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 specialised. 

The following pie chart shows the breakdown of the different REIT sectors in Lion-Phillip S-REIT ETF:

Source: Lion-Phillip S-REIT ETF factsheet (data as of Oct 2021)

Lion-Phillip S-REIT ETF contains 27 high-quality Singapore REITs, and the weight of each REIT is capped at 10%.

As of end-October 2021, the top 10 constituents of the Lion-Phillip S-REIT ETF were:

REITWeight
Ascendas REIT10.0%
Mapletree Commercial Trust9.9%
CapitaLand Integrated Commercial Trust9.7%
Mapletree Logistics Trust 9.6%
Mapletree Industrial Trust9.5%
Frasers Centrepoint Trust9.5%
Keppel DC REIT9.1%
Parkway Life REIT 5.7%
Frasers Logistics and Commercial Trust3.0%
Manulife US REIT2.6%

CSOP iEdge S-REIT Leaders Index ETF

The CSOP iEdge S-REIT Leaders Index ETF has an investment objective to replicate as closely as possible, before fees and expenses, the performance of the iEdge S-REIT Leaders Index.

Just like Lion-Phillip S-REIT ETF, the CSOP iEdge S-REIT Leaders Index ETF only focuses on Singapore-listed REITs. 

Currently, industrial REITs take up most of CSOP iEdge S-REIT Leaders Index ETF’s allocation, followed by office and retail REITs. 

Source: CSOP iEdge S-REIT Leaders Index ETF factsheet (data as of Sept 2021)

Here are the top 10 REITs that are part of the CSOP iEdge S-REIT Leaders Index ETF (as of end-September 2021): 

REITWeight
Mapletree Logistics Trust10.2%
Ascendas REIT 10.0%
CapitaLand Integrated Commercial Trust10.0%
Mapletree Industrial Trust 9.4%
Mapletree Commercial Trust9.2%
Frasers Logistics and Commercial Trust8.9%
Keppel DC REIT7.5%
Keppel REIT5.0%
Suntec REIT 4.1%
Frasers Centrepoint Trust3.8%

UOB APAC Green REIT ETF

The UOB APAC Green REIT ETF allows investors to invest in high-quality, environmentally-sound real estate assets with growth potential.

The green REIT ETF aims to replicate the iEdge-UOB APAC Yield Focus Green REIT index, which contains 50 REITs listed across the Asia-Pacific region.

The index has a specific focus on yield and a weighting method that’s tilted toward the environmental attributes of real estate properties.

Here’s a breakdown of the REIT sectors for the ETF: 

Source: UOB APAC Green REIT ETF factsheet (as of Aug 2021)

In terms of geographical breakdown, Japan takes up most of the index at 40%, followed by Australia (36%), Singapore (16%), and Hong Kong at 8%.

The table below shows the 10 largest constituents of UOB APAC Green REIT ETF, as of 30 September 2021:

ConstituentWeightCountry
Scentre Group7.45%Australia
Dexus7.09%Australia
Mirvac Group6.81%Australia
Link Real Estate Investment Trust6.70%Hong Kong
Nippon Building Fund, Inc.6.50%Japan
Stockland6.08%Australia
GPT Group4.97% Australia
Japan Real Estate Investment Corp.4.62%Japan
CapitaLand Integrated Commercial Trust4.26%Singapore
Mapletree Logistics Trust2.51%Singapore

Comparison of the REIT ETFs

Here’s a quick comparison of the five REIT ETFs that we just discussed:

 Phillip SGX APAC Dividend Leaders REIT ETF NikkoAM-StraitsTrading Asia Ex Japan REIT ETFLion-Phillip S-REIT ETF CSOP iEdge S-REIT Leaders Index ETFUOB APAC Green REIT ETF
Benchmark indexiEdge APAC ex Japan Dividend Leaders REIT IndexFTSE EPRA Nareit Asia ex Japan
Net Total Return REIT Index
Morningstar Singapore
REIT Yield Focus Index
iEdge S-REIT Leaders IndexiEdge-UOB APAC Yield Focus Green REIT Index
Main geographies where underlying REITs are listedAustralia and Singapore Singapore and Hong KongSingapore Singapore Japan, Australia, and SIngapore
Top three REIT constituentsLink REIT, GPT Group, and DexusCapitaLand Integrated Commercial Trust, Ascendas REIT, and Link REIT Ascendas REIT, Mapletree Commercial Trust, and CapitaLand Integrated Commercial Trust
Mapletree Logistics Trust, Ascendas REIT, and CapitaLand Integrated Commercial TrustScentre Group, Dexus, and Mirvac Group
Number of holdings3144272850
Distribution frequencySemi-annualQuarterlySemi-annualSemi-annualQuarterly
Dividend yield2.1%4.2%4.5%4.0%4.3%
Total expense ratio per annum0.91%0.60%0.60%Capped at 0.6%0.45%
(management fee)
Trading board lot
size
100101001010
TickerBYJ (SGD) and
BYI (USD)
CFA (SGD) and
COI (USD)
CLR (SGD)SRT (SGD) and SRU (USD)
GRN (SGD) and GRE (USD)

Have Burning Questions Surrounding REITs?

Then you must check out the community at Seedly and participate in the lively discussion regarding REITs and stocks! 

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 doesn’t own shares in any companies mentioned. 

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About Sudhan P
It isn't fair competition when only one company in the world makes Monopoly. But I love investing in monopolies. Before joining the Seedly hood, I had the chance to co-author a Singapore-themed investment book – "Invest Lah! The Average Joe's Guide To Investing" – and work at The Motley Fool Singapore as an analyst.
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