What Is the UOB APAC Green REIT ETF? A New Way To Invest in Environmentally-friendly REITs
ESG has become a buzzword in the investing world.
For those who may not know, ESG stands for Environmental, Social, and Corporate Governance.
According to a study by Standard Chartered Bank, 90% of those surveyed are interested in sustainable investing.
And 42% are thinking of allocating a portion of their capital to green investments over the next three years.
If you are also considering putting some of your funds into an investment that holds environmental factors in high regard, you should check out the UOB APAC Green REIT ETF.
The ETF, which is poised to be listed here towards the end of this month, will be the world’s first Asia-Pacific green real estate investment trust (REIT) exchange-traded fund (ETF).
With that, let’s find out more about this new innovative ETF and how investors can invest in it!
TL;DR: What Investors Should Know About the 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 ETF’s investment objective is to replicate the performance of the iEdge-UOB APAC Yield Focus Green REIT Index.
- The index has 50 REITs with a focus on yield and a weighting method tilted toward the environmental attributes of real estate assets.
- In terms of geographical breakdown for the index, Japan takes up most of it at 40%, followed by Australia (36%), Singapore (16%), and Hong Kong at 8%.
- The top three Singapore REITs that are part of the UOB APAC Green REIT ETF are CapitaLand Integrated Commercial Trust, Mapletree Logistics Trust, and Mapletree Industrial Trust.
- The target listing date of the ETF on the Singapore Exchange is 23 November 2021.
Getting to Know the UOB APAC Green REIT ETF
The UOB APAC Green REIT ETF aims to replicate the iEdge-UOB APAC Yield Focus Green REIT index.
The REIT index consists of 50 REITs listed across the Asia-Pacific region with a specific focus on yield and a weighting method tilted toward the environmental attributes of real estate properties.
The environmental attributes are assessed by GRESB, an independent research firm and a global leader for real estate ESG research.
More specifically, the underlying REITs in the iEdge-UOB APAC Yield Focus Green REIT index are weighted by their relative environmental performance using GRESB data for aspects such as:
- Energy and water consumption
- Greenhouse gas emissions and green building certifications
- ESG performance
As of 30 September 2021, the five-year annualised total return (which includes capital gains and distributions) of the iEdge-UOB APAC Yield Focus Green REIT index in Singapore dollars was 6.8%.
The iEdge-UOB APAC Yield Focus Green REIT index is reviewed semi-annually in March and September.
All constituent weights are capped at 7%, and geographical exposure is capped at 40%.
As of 30 September 2021, the top three REIT sectors were:
- Diversified REITs (at 30%)
- Retail REITs (29%)
- Office REITs (28%)
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 Nitty-Gritty of the UOB APAC Green REIT ETF
Investors can invest as few as 10 units, and the ETF will be available in both Singapore dollars (SGD) and US dollars (USD).
According to the ETF prospectus, the UOB APAC Green REIT ETF will be an Excluded Investment Product (EIP).
Therefore, investors do not have to specifically qualify to trade it, unlike a Specified Investment Product (SIP).
Once the ETF is listed, local investors seem to have the option to use their Supplementary Retirement Scheme (SRS) to invest in the ETF (for the SGD-dominated version), on top of using cash.
The UOB APAC Green REIT ETF’s manager will use a full replication strategy to track the performance of the iEdge-UOB APAC Yield Focus Green REIT index.
As of 30 September 2021, the 10 largest constituents of UOB APAC Green REIT ETF are:
|Link Real Estate Investment Trust||Hong Kong||6.70%|
|Nippon Building Fund, Inc.||Japan||6.50%|
|Japan Real Estate Investment Corp.||Japan||4.62%|
|CapitaLand Integrated Commercial Trust||Singapore||4.26%|
|Mapletree Logistics Trust||Singapore||2.51%|
Other Singapore REITs that are part of the ETF include:
- Mapletree Industrial Trust
- Mapletree Commercial Trust
- Frasers Logistics & Commercial Trust
- Keppel REIT
- Mapletree North Asia Commercial Trust
- Suntec Real Estate Investment Trust
- Ascendas India Trust
More Deets about the UOB APAC Green REIT ETF
Here are a couple of more things to note about the UOB APAC Green REIT ETF:
|UOB APAC Green REIT ETF|
|Manager||UOB Asset Management Ltd|
|Index||iEdge-UOB APAC Yield Focus Green REIT Index|
|Currency of Account (Base Currency)||SGD|
|Trading Currency||SGD and USD|
|Ticker Symbol||GRN (SGD) / GRE (USD)|
|Trading Board Lot Size||10 units|
|Management Fee||Currently 0.45% p.a. ; Maximum 2% p.a.|
|Distribution Policy||To make quarterly distributions|
|Listing Date on SGX||23 November 2021|
The ETF manager currently intends to declare quarterly distributions of up to 4% per annum of the initial issue price or net asset value (NAV) per unit of the SGD class units.
According to the iEdge-UOB APAC Yield Focus Green REIT index factsheet, the last twelve-month dividend yield is 4.25%.
Buying the UOB APAC Green REIT ETF
The UOB APAC Green REIT ETF’s initial offering period (IOP) has started and runs till 18 November 2021.
During the IOP, investors who wish to apply for the ETF may do so via:
- Participating dealers
- DBS (includes POSB), OCBC, and UOB ATMs
The participating dealers are brokers such as DBS Vickers, FSMOne, Futu, POEMS, Tiger Brokers, and UOB Kay Hian.
The subscription price is S$1 per unit. The minimum application size is 1,000 units and in multiples of 1,000 units.
The target listing date of the UOB APAC Green REIT ETF on the Singapore stock market is 23 November (9 am).
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That’s what we have here at Seedly where you can participate in lively discussions regarding REITs and everything money!
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 owns shares in Singapore Exchange.
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